I am hoping when you read this that you and your family had a very Merry Christmas and happy holidays.
It has been about five months since I stepped into the CEO position upon Dave Armstrong’s retirement. I can’t tell you how many times I have been asked, “How is the new position going?” or some version of that question. The answer many times is very short, “It’s going well!”
The longer answer is I am lucky, blessed and humbled to be leading one of the greatest companies in the world to work for. I have 600 plus teammates that go above and beyond for both GreenStone and its members every day. I truly believe our mission of promoting the business success of our customers and the rural community comes naturally to all of our staff. I have been very proud to have worked for this organization for over 15 years and will be even more proud for years to come.
Another question that I have been asked is, “What is your favorite part of your job?” Well, that answer is also easy. It is meeting and having conversations with our customers who are our members, our owners. Between August and December I have been able to meet and talk with customers in many settings, including:
- Visited 14 customers on their farms or at their place of business
- Met with three different regional nominating committees
- At least four one-on-one phone calls with customers
- Spoke and networked at the MABA 2022 Outlook Conference
- Visited with many at the Michigan Farm Bureau Annual Banquet
- Hosted a large group of customers at GreenStone’s Connect Reception at the 2022 Great Lakes Fruit and Vegetable and Farm Market Expo
- Connected with farmers and industry leaders at the Michigan Corn Growers Association 50 year celebration dinner
I even talked with a couple of customers at my aunt’s (Lois Boone) funeral visitation at the end of November.
The one thing I hear when talking with all of these members is how proud and happy they are to be part of and work with GreenStone! I get such a good feeling every time I hear great things about GreenStone from our customers – our members. It is definitely the best part of my job.
I also won’t deny another great part of my job is highlighting the cooperative's strong financial results. For 2022, we earned record net income of over $280 million. That income was driven by our customers’ outstanding credit quality, strong loan growth of almost 10%, another very good year of providing value added support by our financial services teams, and operating your association in a very efficient manner. While we won’t have the final comparisons until mid-February, I strongly believe we will have the best overall financial results in the Farm Credit System in 2022 of any Farm Credit association.
While all four of our lending lines of business (traditional agriculture, agribusiness, country living and capital markets) saw their loan balances grow in 2022, the results from our capital markets business really carried the bulk of the water with approximately 30% loan growth. The team accomplished this feat of strong growth through excellent financial solutions and customer service all while being understaffed a significant portion of the year. Our lending lines of business seem to take turns having the higher percentage of the loan growth each year. That is the value of a diversified portfolio and is key in our business plan. I can’t thank our sales and credit teams enough for their hard work and our customers' business management and partnership with GreenStone.
Help me out here…every year for the last 18 years, when we have strong earnings we get to share something with our members. What is it? Trying to remember. Oh yeah, Patronage! In mid-December your Board of Directors approved a record Patronage payment of $120 million to be paid in March. Our total cash Patronage paid over the last 18 years is now $840 million. That means the average amount paid back to our members as a percentage of your loan balance will again be nearly 1.25%. What a tremendous benefit to the members of our cooperative when we can share the success of our financial institution with our customers.
I continue to talk with our Board of Directors and our management team about GreenStone challenging ourselves in the areas I feel this organization needs to excel to consider ourselves to have had a “championship” year. In my mind, it’s three things: Financial Performance, Customer Satisfaction and Employee Engagement. I have already discussed how well we performed financially in 2022. In the fall issue we shared our strong 95% customer satisfaction score for 2022.
In the third area, our employee engagement scores have been strong all year, but we recently received some outstanding recognition by the Detroit Free Press (Free Press). On November 20th, the Free Press announced their Top Workplaces in the state of Michigan. They described the heart of their ranking was based on a 24-question survey sent to employees. Well, for 2022, GreenStone was ranked number 4 in the state in the Large Top Workplaces category (companies having more than 500 employees). Our management team and our human resources department, and our entire work family are very proud of this recognition. We know the importance of having engaged, happy teammates. Employee engagement will continue to be one of our top priorities for years to come. Each of these three areas all directly impact the success of the other areas, engaged employees deliver strong customer service which positively impact financial quality.
With the overall results we have produced in 2022, I want to declare 2022 as a Championship year. Your cooperative has checked all the boxes with Financial Performance, Customer Satisfaction and Employee Engagement to be categorized as an outstanding year!
Now, just like you, we have to figure out how to do it again in 2023. Net farm income in 2022 is forecast by USDA to increase 13.8% over 2021 to $160.5 billion. Adjusted for inflation, this puts net farm income for 2022 at its highest level since 1973. The USDA will make its first forecast of 2023 farm income in February. However, the Food & Agricultural Policy Research Institute (FAPRI) is projecting net farm income in 2023 will fall back to $135.8 million, or a decline of 15%. They also predict another 9% drop in 2024. Every year is a challenge for our members. 2023 will certainly have its challenges with extremely high fuel and input costs, labor issues and higher interest rates.
As my old boss used to say, many of our customers have “built some altitude” over the last couple of years. This altitude in your balance sheets will help in 2023. You all have handled these types of pressures in the past and you will handle it again in 2023. GreenStone has also seen these pressures over the last 107 years and will be here to work with you again, whenever you need us.
Thank you again for your membership and business! Please feel free to reach out to me any time if I can ever be of assistance.
To view the article in the online 2023 Winter Partners Magazine, click here.
