JUNE 28, 2017 AT ROTARY
Keith Olson offered our invocation and Wally Cole led us in songs. Our only visitor was Russ Rapp with LB Homes; he grew up in Fergus Falls, attended the University of Minnesota and currently lives in Elbow Lake but is in the process of selling his home down there.
Ryan Welle reported that he and his daughter had been out testing some of our ducks on the river and they had not lost their buoyancy in storage. Keith Olson announced the peaches are expected to arrive on August 11th. President Katie presented an Honorary Member badge to Paul Beithon.
Stan Carignan led off the brags, reporting he had just returned from a family reunion in Oklahoma. Buzz Lundeen let us know that he has already sold four dozen lugs of peaches, people contacting him in anticipation of their arrival. Ryan Welle thanked Katie for her leadership the past year and stated that he and his siblings had taken their father to Alaska the prior week; he also wanted to acknowledge our speaker for the day, a good friend of his. Mary Pettit spoke of the incredible production the Fergus Falls School of Dance just put on over four days and of also taking a short vacation with her grandchildren last week. Tim Hunt said he was off to Kentucky for a granddaughter's wedding while Lori Larson was back from a relaxing week with her family in South Dakota.
Mark Bring introduced Leon Johnson, also a friend of his, who is the Executive Director of the West Otter Tail Farm Service Agency. Leon's wife is Connie and they have two children, describing themselves as part of one of the close knit "hockey families." There are over 2000 FSA county offices nationwide, with the Fergus Falls office supervising 31 townships. A three person committee serves as Leon's supervisor. A large portion of the agricultural budget goes toward school lunches and food stamps, so FSA only oversees about 10% of the ag budget, with another 10% attributable to crop insurance. Leon described the two commodity programs currently in existence: Agricultural Risk Coverage ("ARC") and Price Loss Coverage ("PLC"). Historically commodity programs could have been described as direct payment subsidies, with no tie-in to price and yield, but that is no longer the case.
Leon also talked about FSA's lending programs, describing the Agency as a lender of first opportunity, providing credit to ag producers who are unable to obtain private, commercial credit. They give priority to beginning farmers (in farming for less than ten years), women and minority groups, and veterans. FSA can do real estate loans, equipment loans and operating loans. It will also partner with commercial lending institutions on certain real estate loans, providing half of the funds and the private lender receiving a first position. FSA can only lend money if there is a commercial lender who will not. If FSA is making the loan on its own, there is a $320,000 credit limit, while if participating with a private lender, the total loan can exceed one million dollars. Unlike commercial lenders, FSA does not need a certain amount of equity in its collateral to approve financing; rather, it looks at an applicant's balance sheet and cash flow projections.
FSA also administers the Conservation Reserve Program which first came into existence in 1986. It was initially designed to take land out of production but now is more of an environmental program. At one point there were over 40 million acres enrolled in the program while today there are about 24 million authorized acres and there are over 23 million acres actually enrolled. Today's program requires that native grasses and flowers be planted. In Otter Tail County, the low end of CRP payments is $75, while the high end is $155, with the amount paid dependent upon soil type. There is a cost share component to the program that reimburses landowners for part of the cost of the cover crop. Leon also referenced a partnership between the federal government and the state called CREP III, with involves granting Minnesota a perpetual easement. Finally, he talked a little about FSA's livestock assistance programs, including one dealing with honey bee colony collapse.