Happy 2024 to the best customers in the world. I hope all of our members had a very Merry Christmas and Happy New Year.
A Year In Review
I don’t know about you, but 2023 flew by for me. Fall seemed especially busy, both with GreenStone responsibilities and family fun. Saturdays were especially fun. I think I was lucky enough to attend four Michigan State University football games and six University of Michigan games. (Thank goodness my wife Sue enjoys attending the games with me!) While this was not MSU’s most successful year, when attending their games I was able to spend valuable time with customers, employees and agricultural industry leaders. A couple of the leaders I was able to have discussions with included MSU’s Interim President Teresa Woodruff and MSU’s Dean of the College of Agriculture and Natural Resources Kelly Millenbah. I really appreciate our partnerships and relationships with these leaders and all ag leaders in our great states of Michigan and Wisconsin.
While harvest this fall was extended a little more than normal, yields throughout our territory seem to have compared well with recent averages based on discussions with our members. With a very dry May and June, I think most of us are all very grateful for those results. The corn harvest did fight vomitoxin issues. However, when everything is calculated, I think our results will be solid.
Your Association also had another strong year in 2023. Net income is estimated at $280 million for the second year in a row. Loan growth was 9% overall with all of our lending lines of business contributing to our growth. Our crop insurance and tax and accounting services also had strong, profitable years in 2023. Our growth by lending segment was as follows:
Traditional Agriculture 3% Country Living 5%
Agribusiness 6% Capital Markets 20%
Credit quality ended the year strong as did your cooperative’s operating efficiency rates.
As you may already know, I am kind of competitive and like to keep score. So, I compare GreenStone’s financial results to the largest 11 other Farm Credit associations in the country. Final year numbers won’t be available before publication of this Partners issue, but through the first three quarters of 2023 GreenStone was again the top financial performer in the country when considering Return on Assets (profitability), Loan Growth, Credit Quality and Operating Efficiency!
My prior boss and former CEO, Dave Armstrong, used to joke after a good year and say, “We got lucky again!” Well, I am lucky to be surrounded by teammates and leaders that consistently follow our Core Four Values, especially putting our Customers First and Delivering Quality. But our results aren’t lucky. They don’t happen without all of our 650 staff members going above and beyond, every day. This quarter I want to recognize the executive team and some of the Board members that have been part of our consistent success for many years.
Executive Team years with Farm Credit and GreenStone:
- Cheryl Motz, Executive Assistant to the CEO – 41 years
- Paul Anderson, EVP and Chief Credit Officer – 40 years
- Beth Barker, EVP and Chief Human Resources
Officer – 25 years
- Ian McGonigal, EVP and Chief Sales & Marketing
Officer – 23 years
- Steve Junglas, EVP and Chief Information
& Security Officer – 20 years
- Melissa Stolicker, EVP and Chief Internal Auditor – 19 years
- Pete Lemmer, EVP and Chief Legal Counsel – 15 years
- Kim Brunner, EVP and Chief Financial Officer – 10 years
Board Members for over 10 years:
- Dennis Muchmore – Director for 21 years
- Scott Roggenbuck - Director for 16 years
- Ed Reed – Director for 15 years
- Gene College - Director for 14 years
- Bruce Lewis – Director for 12 years
- Dale Wagner – Director for 11 years
- Ron Lucas - Director for 10 years
- Dave McConnachie – GreenStone Director
for a total of 18 years
That is an impressive group of leaders with years of experience at the helm of your cooperative! Again, our strong results don’t happen without all of our team members, and I want to thank them and the above individuals for their consistent contributions to your Association.
Looking Ahead
Speaking of strong results, your executive team recommended, and your Board of Directors approved a Patronage distribution for March of 2024 of $120 million! This matches last year’s record payout and totals $960 million of Patronage paid to its members over the last 19 years. No bank or credit union does that for its customers. This year’s patronage essentially amounts to an average refund of interest paid to our members of 1.14 percent. We can’t be more proud to share our success with our owner/members.
We have discussed in prior quarters that U.S. 2023 net farm income is expected to finish well below 2022. Based on discussions with members and current commodity prices, profitability margins are expected to be challenged again in 2024. However, there may be some good news entering 2024. While I was doubtful that it could happen, it appears the Federal Reserve may be able to guide our overall economy to a “soft landing” after battling inflation. (I am knocking on wood as I type this.)
At the December meeting of the Federal Open Market Committee (FOMC), the FOMC gave guidance that they actually may be ready to reduce interest rates during 2024. Predictions of approximately a 0.75% decline in the Fed Funds rate during 2024 fueled the stock market to new highs. With this expectation of falling short-term rates, long-term rates have already started to fall. For instance, GreenStone’s 10-year fixed rate is approximately 0.65% lower today than at the beginning of 2023. If this trend continues, we may be able to take advantage of a number of simple and quick loan conversions for our members to lower rates on existing loans in 2024.
It is important that we continue to provide our customers with value not only through our products and services, but through our expertise and resources to our members. Our team has put together an array of opportunities for members to learn, network and grow over the next several months. From forums for farmers, to supporting logger trainings, providing market experts to the dairy industry, helping guide future homebuilders through the construction process at our seminars, and a conference tailored to topics top of mind for young, beginning and small farmers, the expertise of our staff and industry leaders will be shared far and wide to help each of you in your personal and business goals. You can read more about these opportunities on page 25.
Thank you for making 2023 another outstanding year. We look forward to helping promote the business success of our customers and our rural communities in 2024 and beyond.
Please feel free to reach out to me any time if I can ever be of assistance. Thank you again for your membership and business!
To view the article in the online 2024 Winter Partners Magazine, click here.
