Local agricultural lender, Horizon Farm Credit, in conjunction with Colonial Farm Credit and Farm Credit of the Virginias, announced they are partnering with the State Fair of Virginia to construct a modern livestock show facility at the Meadow Event Park in Caroline County, Virginia.

“We are so excited to be able to support the youth of Virginia through this partnership” says Tom Truitt, CEO of Horizon Farm Credit. “The building will be available year-round to hold ag-related activities for the community and opportunities for our youth to compete.” 

Construction is underway on the facility with an October completion, anticipated in time for a modified youth livestock show. The 42,000 square foot facility, which will be called the Farm Credit Pavilion, is partially enclosed with a (dirt) concrete floor, climate control, and 675 square feet of office and restroom facilities.

The Farm Credit Foundation for Agricultural Advancement recently announced the creation of its Community Education Program to offer organizations providing agriculture education to those within Horizon Farm Credit’s territory the opportunity to apply for up to $10,000 in funding.

“We are excited to be able to continue supporting the future of agriculture through this new program,” says Walter Hopkins, Chair of the Foundation. “The Foundation encourages all eligible organizations to apply for funding so we can be sure our community members have access to agricultural education opportunities.”

Funding options include up to $2,000 and up to $10,000. Applications will be accepted in two periods:

• Now – June 26: Decisions made by the Foundation on July 2 with winner notification by July 15.
• July 1 – October 16: Decisions to be made by the Foundation on October 22 with winner notification by October 31.

Qualified programs must benefit communities within Horizon Farm Credit’s footprint and be consistent with the values and mission of the Foundation. Requests that meet the selection criteria are considered by the Foundation Board. Only 501(c)(3) organizations or those otherwise exempt from federal income tax will be considered. Funds will not be awarded to the same or part of the same organization more than one time in a 12-month period and no more than three times within a five-year period.

For more information about the requirements, guidelines and restrictions of the Community Education Program and to apply for funding, visit FCFoundationForAg.org.

Listen to Jenny's episode here!

Jenny Kreisher:

Our guest today requires very little introduction, as she is somewhat of a celebrity around these parts. Jenny Rhodes is a lifelong ag advocate and has been raising poultry and growing grain in Centerville, Maryland for over three decades. Her love of education and helping fellow producers prompted her to join the University of Maryland Extension system in 1997, where she's now a principal agent. Ever since Jenny was a young girl, she's really taken a leadership role, not only within the ag community, but in her community as a whole. And she continues to do so today as both a member of the Delmarva Poultry Industry and our own Board of Directors. I honestly, Jenny, do not know how you do it all, but it's very much my honor to have you on the podcast today.

Jenny Rhodes:

Well, thanks. Thanks for having me. And I'll say that when you love what you do, it's pretty easy.

Jenny K.:

DO YOU MIND TALKING TO EVERYONE A LITTLE BIT ABOUT YOUR BACKGROUND - YOUR VERY EXTENSIVE BACKGROUND IN AG AND YOUR OPERATION TODAY?

Jenny R.:

Sure. I grew up in agriculture. My mom and dad are really the first advocates of agriculture that I learned from. My dad was not afraid to teach us anything. And, at the age of eight years old, I was out driving a tractor and doing things. Other farmers are like, “Oh my gosh, I can't believe you're letting your daughter do that.” I guess that has made me be the person I am today. I'm really not afraid to delve into anything. But I was pretty lucky growing up. My mom was a nurse and she was able to stay home and raise us, and we all worked together as a family. I'm the oldest of five children, and pretty much all of us are involved, in one way or the other, in agriculture, some a lot more than others of my siblings. But we were in 4-H and we were in FFA. That's the start, I think, of your leadership and learning life skills.

And then on, I worked and went to college at night. I went back later and got my bachelor's and master's degrees. I've done a little bit of everything, but in my heart all I really wanted to do was own my own farm, and the poultry industry really gave me that ticket. I knew that, and today we still can't go buy a farm and pay with just raising greens, corn, wheat, soybeans. So the poultry industry was my ticket into getting into agriculture. Nobody in my family had really been in the poultry industry before. It was really a whole new experience for us.

At the time, I was married. A few years later, my now ex-husband decided that he wanted to leave. So he left and we carried on. I was not changing my children's lives. They were eight and 10 when we divorced, and it was very important for me to raise my children on a farm, just like I was. And people were like, “Oh, you're a woman, yada, yada, yada.” But I'm like, you know what, my mother and father instilled in us that we could do anything that we wanted to do. And that's what I've done. So my sons and I have always worked together, and today they help me on my farms, and they have their own operations. They both own their own grain and poultry farm. I'm pretty proud of that. And my dad, my brother and my mother really helped me to raise my sons also. It takes a team, but I was really the one that taught them about the poultry industry. And now they have their own poultry farms, and they do a really good job. They also have grain operations, too.

Jenny K.:

That's incredible. You've got quite a family legacy there.

HOW IS IT WORKING WITH YOUR SONS? WAS THAT SOMETHING YOU ALWAYS HOPED WOULD HAPPEN OR WAS IT KIND OF DONE BY SURPRISE?

Jenny R.:

Well, growing up, I always thought it was the worst thing in the world because we always had to stay home and work, and I didn't get to play any sports. I did get to play basketball, and I was not very good at it. But we had fun and that was the most important part of it - we had fun doing that. But later in life, I realized the things that I did with my family, working with my family, were much more important than any other sports. I was involved in FFA and those kinds of things. But working with your family – we were a family of seven and we worked all summer. I've told this story, it's my favorite story to tell.

We worked in a garden, we worked on the farm all summer and our vacation was really the county fair, the community's county fair, of which we were in 4-H. Each of us would enter like, a hundred things, in the fair. I don't know how that was a vacation, but it was for us and it's still my favorite week of the year. Growing up, we didn't know anything different, and I really wanted to work side by side with my sons. And certainly, they always have worked on a farm. But when I got divorced, yet at eight and 10, they still helped me a lot. They would get up and we would work in the chicken houses in the morning before school, then I would head out to work, but it all worked and it all got done. People were like, “Well, you don't spend any time together.” I’m like, yes we do. We work together. That's the best thing of all.

A lot of people don't understand, we don't need to go to the movies. I don't like to shop anyway, and we don't need to go shopping. The best thing is when you can spend time working with your family. And now my grandsons and my granddaughter too, we spend time working together. I enjoy every minute.

Jenny K.:

That's definitely team bonding. That's for sure.

Jenny R.:

Yes it is.

Jenny K.:

That's quite the work ethic. You are very well known around these parts for being a poultry farmer. I've done a tour at your farm before. You're very welcoming to anyone that's interested in learning about your operation. So kind of switching gears here to poultry, the industry. You've navigated several challenges as a poultry farmer. You've had avian flu outbreaks and you've had to put some serious biosecurity measures on your farm, so I know challenge is definitely no stranger to that industry.

HOW IS THIS PANDEMIC DIFFERENT THAN SOME OF THOSE PAST CHALLENGES THAT YOU AND YOUR FELLOW POULTRY INDUSTRY REPRESENTATIVES HAVE FACED?

Jenny R.:

When COVID-19 first came around and I was working from home, I really enjoyed working from home and working from my farm office. It's been very gratifying to be on the farm. But the first couple of weeks I'm like, “Oh, this is going to be good.” Poultry and agriculture is not going to be affected because a lot of times in economy downturns, agriculture does very well, but this is certainly a pandemic, like none of us have ever experienced. It has affected all of us, and I don't care who you are and what parameter you're in in life, it's really had a lot to do with many of us, that's for sure. But for us, we've always practiced good biosecurity.

The new biosecurity is social distancing. We've always done that really in the poultry industry. We come home from work or come home from being in town or going to get parts. We come in our house, we take off our shoes, we take off our clothes. Sometimes we take a shower, depending on where we've been. Then we put on our barn clothes and our barn shoes and go back down to the farms or chicken houses. It’s something that we’ve always done and I think a lot of people just don't have a clue. I've told people before that when you get home from work or wherever you've been, there's a lot of germs on the bottom of our shoes. You should be taking off your shoes. You should be taking your clothes off, and throwing them in the washing machine. And at least changing your clothes, if not taking a shower.

I think that's one thing the poultry industry has always been very good at as is biosecurity, and just washing your hands. We wash our hands before we go to the chicken house. People are like, “Why are you washing your hands before you got to the chicken house?” Well, because you don't want to take germs into your chicken houses, the same way when you get done working, you don't want to take anything out either. I think it's just the unknown of not knowing. You're in charge of these animals 24/7, and we're an integrated system, meaning every piece of that integrated system has to work. And I never in a million years ever thought about really, what happens when the plant workers can't get to the plant to harvest the chickens, and that happened.

But we have gotten through it and we've learned a lot of things. I think the companies, everybody, has learned, and we're all learning about the things that we can do, and that we all have to work together. Communication is key to making producers and everybody up the line really understand. I think a lot of it was, and I didn't really understand this myself until after all this, that when you look at our food chain, 50% of our food goes to the grocery store and the other 50% goes to restaurants and institutions. When that part got shut down. It just put a real big kink in the system. But we're marching through.

Jenny K.:

What are some things that you all are doing to adapt to some of those problems that you're seeing? The restaurant piece was one thing that, like you, I didn't think about as part of our food supply chain, but it's clearly a large part.

WHAT ARE SOME THINGS THAT YOU AND YOUR FELLOW PRODUCERS HAVE DONE TO ADAPT AND ADJUST TO ALL THIS?

Jenny R.:

I think a lot of it is to listen to the companies, the veterinarians, and the grow out managers. They're trying to make decisions on how the birds grow, and they're thinking about placings. You'll listen to national news, I do a lot of listening to the national rural news (I call it), and processing plants may never be back to 100% of what they were just because of the social distancing and what they have to do. So as we do that, we have to think about placements of birds. Some companies, there's five here on the shore, I'd say two companies are probably kind of full steam ahead. They're still placing the same amount of birds in the houses. And then other companies, the company that I grow for, said we can look for some extended layout.

So, we are looking at our budgets and we are looking at our expenses, and what are the things that we can cut. As a county ag agent, I have a lot of those talks with people. Look at all of your expenses, right down to your cell phone bill. It might be $5, but $5 a month - that adds up. We have a dumpster. Look at that bill, maybe that’s something. They used to come and pick ours up every week, now they come every other week.

We're looking at every single thing, every expense. When I pay my bills and looking through my QuickBooks, I'm looking through my expenses. What are the things that I can cut out? And I think the other thing is, if you were to get into that situation where you think you can't make your payments – for example, we have quarterly mortgage payments. Say we get to that point where layouts are that long and we may not be able to make our payments. First thing is of course, to reach out to Farm Credit or to your bank and communicate. Let them know what's going on. But I've told people to know what it costs you to personally live.

When you go to the bank, they want to know what is costs you to personally live. You may be pretty frugal, and maybe it doesn't cost you that much to live. That may give you other cashflow for your farm. I think the financial piece is just so important, and the management piece, like keeping your farm clean, cutting grass, and picking up trash. It doesn't cost a lot to go and pick up trash, or whack a few weeds here and there. It takes a little bit of labor, but no matter what you should take pride in the way that your farm looks. And we all do. My dad, our whole family, we all take pride in our farms. When somebody pulls onto your farm you want them to say, “Oh, this is a really nice farm. Jenny does a good job taking care of her farm.”

Jenny K.:

That’s great advice.

WHAT ARE SOME THINGS THAT DPI AND EXTENSION ARE DOING RIGHT NOW TO SUPPORT PRODUCERS, TOO? HOW ARE THEY SUPPORTING THE COMMUNITY RIGHT NOW?

Jenny R.:

Our job at Extension is through education. We have started a weekly lunch with your favorite ag agents. We partner with University of Maryland Eastern Shore, which is Jennifer Timmons, and Georgie Cartanza at the University of Delaware Cooperative Extension. And then Dr. John Moyle is our poultry specialist, and myself. Every Wednesday at lunchtime we invite anybody to get on and we talk about what's going on. We want people to have an outlet just maybe to vent or to ask questions that they don't understand about what's going on. We kind of left it open probably the first month. We just had one today, and we talked about neighbor relations. It always helps when you have a topic.

Out of bad things come good things. We will continue to do this because it's easy. You get on your computer, they get on their phone, they can still be at home, and nobody has to travel anywhere. Biosecurity is not an issue. We can have people on from Pocomoke to Delmar to Centerville. It’s also not just for growers, but we asked the allied businesses to come on. There was a gentlemen on today from the Maryland Department of Ag because we were talking about neighbor relations. We can all work together to do these things. We invite anybody really to get on and to listen.

Then on the DPI side, we've done some lunch and learns, talking about solar and some other opportunities out there. They've really been working on the legislative side to help our legislators to understand. We had an Eastern Shore delegation Zoom meeting. That was held on a Friday to talk with them about what's going on. We have neighbors and other people that really don't understand the impact of COVID-19, and don't understand why there's not chicken in the grocery store. Because, certainly Jenny has 80,000 chickens right down the road, but why is there not any in our grocery store? That’s what we need to try to explain.

I also do volunteer work with the National Chicken Council. They're out of DC, and they are advocates of chicken. I've done a lot of tours with them where social influencers come into my farm. I’ve been working with them and figuring out how we can get federal assistance to farmers that may need it. I don't believe that every person needs federal assistance, but if there's a farmer that's going to be laid out a long time, what can we do to help them? DPI, myself, others have been working with Farm Bureau, grain producers, and National Chicken Council on what things we can do to help farmers. Because really, in the Corona Food Assistance (CFAP) Program that was rolled out by the USDA, poultry was left out of that. I understand, poultry is usually not part of a lot of the USDA programs, because we don't own our birds. But, because of the pandemic, they're trying to figure out a way that if they share a reduction in income then to get some type of assistance to that farmer. We're still working on that. One size does not fit all in ag, and we really want it to go to the people that need it and not the people that don't need it. That's the tough part.

Jenny K.:

I love the steps that DPI, Extension, and the National Chicken Council are taking to pull the community together to advocate for themselves. That is crucial right now.

AS YOU TALK ABOUT ALL OF THE EFFORTS YOU'RE INVOLVED IN, DID YOU KNOW YOU ALWAYS WANTED TO BECOME AN ADVOCATE FOR AG? WAS THIS SOMETHING THAT YOU ALWAYS HAD THAT DRIVE IN YOUR LEADERSHIP DRIVE?

Jenny R.:

No, I really didn't.

Jenny K.:

No? I don't believe that.

Jenny R.:

I know. I think you never know in life where it might take you, but I had a mentor and really didn't even know it. I am really a big proponent of mentors and I try to mentor other people. There was a person that mentored me, and he actually worked with Farm Credit. His name was Kenny Bounds, and he is still my mentor today. I think sometimes you're being mentored and you don't even know it. It's when you call, “Hey Jenny, can you do this?” Or, “Hey Jenny, can you do that?” I think sometimes we don't always step up. And for me, I'm a graduate of LEAD Maryland. I was in Class IV, and I think that was probably -

Hunter is eight, Cole is six, Oliver is four, Audrey is one and a half, and Henry is a little over a year. They keep me very busy when I have all five of them. It's just a joy. They were actually here last night and we were all swimming in the pool, and that's just the best for me. When they're here and we can eat together, or even if we're working together, it really doesn't matter because we're all together and we're all spending time together. When I see my sons talking with each other and conferring and asking, “Well, what do you think about this? And what do you think about that?” I see them both kind of being leaders in their community. I look for both of them to step up, but when you're young and you've got a family - I think leadership is all about the right time. And you can be leaders in different ways. I have a lot of women that say they want to be a leader, but their kids are small. And I understand. I couldn't do all that when my kids were young either, but once they got older, and I think LEAD Maryland really helped me. That was really the first time. When I was at a LEAD Maryland seminar and my chickens were delivered that day, and I was a nervous wreck. But that's part of really being a leader.

Jenny K.:

That actually tees up my next question perfectly which is:

WHAT ADVICE WOULD YOU GIVE TO YOURSELF WHEN YOU WERE JUST STARTING OUT, STARTING YOUR OPERATION? WHAT'S SOME ADVICE THAT YOU CAN IMPART ON SOME YOUNG PRODUCERS THAT MIGHT BE GOING THROUGH THAT SAME NERVOUSNESS AND FEELING?

Jenny R.:

Well, common sense always prevails, I think, thinking about different things. And you may be scared or worried about things, but educate yourself first. No question is ever dumb, reach out to another person if you really don't understand the situation you're in or what's going on. I think sometimes communication is just so important. In all things, my mother always said this: Everything happens for a reason and you're not really sure. But everything does happen for a reason, and it really makes you a better person in the end. You may fail. My life has not been perfect, that's for sure. I have failed at a lot of things, but when you fail, it makes you work even harder to move ahead. Especially when people say, “Oh, you can't do that.” I'm like, “Don't tell me I can't do that because I will show you that I can do that.” I think determination is a lot of it also.

Jenny K.:

I totally agree with you. I've really appreciated this conversation, Jenny. Two Jenny's on the same podcast, I was looking forward to this day. I just have one more question before I let you go and back to your oh so busy schedule.

WHAT DOES JENNY RHODES ADVOCATE FOR IN AGRICULTURE?

Jenny R.:

Educate people so they understand what we do. We, as farmers, want the same thing as everybody else. Everybody wants a clean Chesapeake Bay. We want good air quality. We want cheap food. And I think as farmers, we want the same thing. The reason we do what we do - we take a lot of pride in raising crops and raising animals. Yes, it's a business, but it's also a way of life. I really want people to understand what we do and why we do it.

Jenny K.:

I love that. And I think you are off to a great start, I appreciate your time today, Jenny, and thank you for everything that you do for Farm Credit and for agriculture in general.

Jenny R.:

Well, thanks for having me on, I appreciate it.

Kurt Fuchs, Senior Vice President (SVP) of Government Affairs for Horizon Farm Credit, was awarded Young Professional of the Year for 2019 by the Caroline County Chamber of Commerce last week at the Chamber’s annual Best in Business Awards Dinner.

According to the Chamber, the award recognizes a Caroline County business leader who is 40 years or younger and has shown leadership in their dedication and commitment to our community through their interest in business, community service, peer mentoring, and/or personal achievement. The Chamber conducts an annual survey for nominations for Best in Business, so those who receive the award do so because they were nominated by their peers.

“I am honored to receive this recognition from the Caroline business community,” says Fuchs. “It is a privilege to be able to serve agriculture and rural communities throughout the region, and in particular those farm families and agribusinesses right here in the Green Garden County.”

In his role with Horizon Farm Credit as the SVP of Government Affairs, Fuchs works with legislators, government agencies, industry groups, and centers of influence to anticipate and mitigate legislative, regulatory, and political risk to the Association and its member-owners. In addition to his duties at Farm Credit, Fuchs serves on numerous civic and professional boards including the Choptank Ruritan Club, LEAD Maryland Foundation, Delmarva Poultry Industry, Inc., and the Pennsylvania State Council of Farm Organizations to name a few.

“We are very proud of Kurt for receiving this award,” says Tom Truitt, CEO of Horizon Farm Credit. “His professionalism is evident through both his work and his involvement in the community. Kurt is a dedicated employee and citizen who strives for the best.”  

For more information about the Caroline County Chamber of Commerce, visit carolinechamber.org.

Every agricultural operation is vulnerable to crises, no matter how equipped you are. One of the biggest missteps a business can make during a crisis, is a lack of communication with their internal and external audiences. Without a proper communication plan, you risk diminishing internal morale and losing trust with your stakeholders. Being proactive and transparent in your communication is key to protecting your business’ people, assets and brand.

Crisis communication plans are designed to provide guidance and easy-to-follow steps to prepare for, manage and recover from a crisis. Effective crisis communication relies heavily on the preparedness of the internal team of your business. Creating a crisis communication plan can seem daunting, but our guide below can help alleviate some of that stress and allow your business to be proactive during a crisis, rather than reactive.

Crisis Communications Team

A business’ crisis communications team should be made up of the key decision makers who know the ins and outs of the operation. The composition of the team may vary depending on the size of the business, but keep these three roles in mind: main decision makers, communications, and subject matter expertise. If the crisis has to do with a piece of equipment, a staff member who operates that machine should be on the team. You may also consider relying on your network and existing industry relationships if the crisis is not limited to your business alone.

SPOKESPEOPLE

Plan out who from your operation should speak or write on the following communication channels:

• Social Media: _____________________________
• Press Releases: ____________________________
• Website Updates: __________________________
• Mobile App Updates: ________________________
• Phone Messages: ___________________________
• Signs: ____________________________________
• Emails: ___________________________________
• Letters: ___________________________________
• Meetings: _________________________________
• Newsletters: _______________________________
• Media Interviews: ___________________________

You will find that it is often one or two people who are deemed the spokespeople during a crisis because it is easier to keep consistent messaging. However, if your business is open during the crisis and you have staff speaking with external audiences, they will need to know what to say about the crisis and how to respond to questions. In this case, putting together talking points for them is crucial to ensuring your company is communicating consistently.

Any employee who is not authorized as a spokesperson should not make statements, comments or declarations internally or externally to vendors, media, on social media, etc. All employees should direct inquiries to the designated, and trained, spokespeople.

Verify the Crisis Situation

When a crisis occurs, it is crucial for the communications team to discuss the following:

• The severity of the crisis and how it currently impacts the business
• What needs to happen internally to adjust to the crisis
• What needs to be communicated internally and externally to address concerns
• What could happen if the crisis continues/grows into something more severe

DEVELOP MESSAGES

When thinking about what messaging needs to be developed, the crisis communications team should first consider the key audiences of each message. (The below examples may or may not fit your business, and you may need to add others.)

• Internal
  • Staff
  • Board Members
  • Partners
• External
  • Key stakeholders
  • Community members
  • Customers
  • The media
  • Law enforcement
  • Public officials
  • Residents

A crucial part in messaging during a crisis is to have empathy and to show transparency for all audience members. Stay in tune with your key audiences and what they need to know from your business. What questions might they have that you CAN answer?

Before you send a mass communication, think about what you’re trying to accomplish and make sure the messaging clearly conveys that. For example, if your business has to close its doors for a period of time, let your audience know how they can be in touch with you and what they can expect when you are back to business as usual. Remember: there is a fine line between keeping the messaging positive, and not turning a blind eye to the fact that there is a crisis impacting your business and the community.

COMMUNICATION CHANNELS

Be sure to refer back to your spokespeople before communicating on any channel. Most messages can be tailored to fit all of the below communication channels:

• Social Media
• Press Releases
• Website Updates (especially on the home page if a major change takes place)
• Mobile App Updates
• Phone Messages
• Signs
• Emails
• Letters
• Newsletters
• Media Interviews

Your business will most likely not need to communicate on all of the channels above, but it is something to consider. Where do you normally communicate with all of your audiences? Make sure to hit those channels first and the most often. Although it may be difficult, try to respond to questions or comments within 24 hours. You want your audience to hear things about your business from you first.

Check on any pre-scheduled or planned communications as well to make sure that the messaging is not ill-timed or tone deaf to the crisis. If you’ve planned anything that is no longer relevant, determine when will be the appropriate time to revisit.

Notification and Assignments

Once a plan and messages have been developed, one or two members of your crisis communications team should be reaching out to all internal members of the business. The team should make the following information clear: the status of the crisis, what actions have been taken and what actions will be taken, equip each person with talking points, but make it clear that any official media inquiries should be directed to a spokesperson, and make any necessary assignments. The assignments to staff should generally cover what specific people or departments need to do and/or say during the crisis – it will take a team to overcome any crises, so make sure everyone knows the goal and how they can help do their part.

Monitor and Provide Feedback

Once the approved messages have been released and everyone internally and externally has been communicated with, the crisis communications team should continue to monitor the situation and develop more messaging and strategies as the crisis unfolds. It’s best for the team to check in with each other daily as the crisis is going on, and at least every other day as the crisis begins to subside. Analyze common themes and trends your audience members are talking or asking about most. Have you communicated about that yet?

Post-Crisis Response Review

Once the crisis is over and you’re back to business as usual, the crisis communications team should meet to asses all communications. Discuss what worked and what didn’t work, survey all employees and stakeholders to gauge if perception in the brand has changed, and save all feedback to include in your plan to be better prepared for the next crisis.

Navigating a crisis is never easy, but having a communications plan prepared can help ease the initial stress. Farm Credit was created to support our nation’s farmers in both good times and bad. We want to help you navigate these challenges and come out of the situation stronger than before.

Before we can start planning for another year of growing, we must first evaluate our business and production performance for the past 12 months. Completing a year-end financial check-up will help you analyze your successes and failures, in addition to revealing your opportunities for growth into the next season. 

Five key steps to implementing a year-end financial check for your farm business:

1. Update Your Balance Sheet and Profit & Loss Statement

A balance sheet is a financial snapshot of your business at a specific point in time. Preparing an end of year balance sheet year-over-year provides you and your lender with a baseline, and allows for the preparation of accrual adjustments. Accrual financial statements deliver a more accurate picture of your operation’s actual income and expenses, and gives you the ability to recognize relevant expense or income trends. They also allow for the calculation of accurate cost of production, the ability to measure competitiveness, and can help improve planning.

Comparing year-end profit and loss statements can also help you measure your success throughout the year and better track your expense ratio. Are you meeting the benchmarks you set out for yourself throughout the year? Are you lowering your expenses per every dollar of earned income?

2. Schedule a Year-end Tax Planning Appointment with Your Accountant

Working together with an experienced agricultural accountant can help you identify proper year-end planning to help position your farm business, prior to filing your taxes. Are you ready to upgrade equipment? Should you prepay next year’s operating costs? Are you planning to purchase a new farm entity or transitioning part of the farm business to the next generation?  It is never too early to begin gathering your financials to prepare for filing your farm business taxes or to set-up a meeting with your accountant to review your financial progress.

Mark Hartshorn of Hartshorn CPA, LLC in Hagerstown, Maryland suggests several steps you can take to make sure you’re adequately prepared for your meeting with you accountant.  Before you head to your meeting, make sure you have your books already updated. Depending on how you keep your records, this could mean having bank accounts reconciled through August/September, or having written record of the year’s income and expenses, in addition to projections through year-end. When you meet with your accountant, you will also want to discuss who (what contractor/vendor) should receive a 1099, as they are due January 31, and who you should receive a W-9 from. If you haven’t started planning for retirement yet, ask your accountant what tax deductions you may be able to benefit from by starting a retirement fund.

3. Review Your Annual Budget & Examine Your Cash Reserves

Once you have completed your year-end financial projections, it is important to compare those figures to your annual budget. Did this year progress the way you anticipated? Did you find yourself with higher input costs or lower projected income than expected? Being financially aware of your budget will help you to make better business decisions, help you to prepare for the coming year, and allow to you to review your cash reserves on hand. It is always a good management decision to set aside three to six months’ worth of living expenses for an emergency fund.

4. Reach Out to Your Farm Advisor Team

Every farm has a unique resource team supporting their farm operation. Your team may include a financial advisor, farm insurance agent, crop insurance representative, and/or an attorney. Remember to check-in with them as needed - you do not want to overlook an opportunity!

Connect with your financial advisor to discuss your current or future investment options. If you find yourself with additional income, it might be the right time to start or adjust a retirement savings plan.

Remember to review your farm insurance coverage and make sure to update your policy coverage, if you have made any big changes to your operation. As you are finishing your harvest season, also remember to complete your crop insurance production reporting forms to ensure the most accurate yield information is available for the upcoming year. Be sure you check in with your agent prior to sales closing deadlines.

Revisit your existing will and make necessary updates. Did your family unit grow, your business restructure, or did you purchase additional assets? We recommend keeping your will updated and in a secure location to help your family be better prepared for the future.

Consulting with reliable advisors and completing the current year-end updates will certainly help to support your future success.

5. Schedule a Check-in with Your Lender

The fourth quarter of the year is a great time to check-in with your lender to discuss your successes and any challenges you faced during the year. Lenders look forward to discussing your future plans or any changes you may have made to your business plan or marketing plan. Loan Officer, Paige Hargett, adds, “Detailed record keeping is imperative for your lender to understand how the year went, even the bad is welcomed as we want to better position your operation for the upcoming year. Our main goal is for you and your operation to be successful.”

During your check-in with your lender, think about two specific areas of conversation: evaluating the best use of debt dollars and reviewing your revolving line of credit.

Evaluate Your Best Use of Debt Dollars.

Year-end is an excellent time to take advantage of discounts for seed and fertilizer, and it can be tempting to put these expenses on a credit card. Keep in mind, you may be able to avoid the higher interest rates associated with credit cards by reaching out to your lender about setting up a lower interest rate line of credit to cover your farm’s operating needs.

Take time to review your existing loans and be aware of what interest rates you are paying on each of them, focusing specifically on your intermediate (vehicle and equipment) and long-term (home/farm mortgage) debts. You may have the opportunity to lower your rates and/or decrease your loan terms, which will save you interest costs over the long haul.  Does it make sense to prioritize paying down a high interest rate loan or double up on a credit card payment? Work with your loan officer to identify and evaluate each source of debt and determine the best debt dollar use strategy for your operation.

Review Your Revolving Line of Credit.

Doing an end-of-year review of your revolving line of credit is imperative. You should ask yourself whether or not there is an intermediate debt that should be termed out as you weren’t able to pay it off as expected throughout the year. Is there enough credit available for year-end prepaid purchases to take advantage of discounts?

Farmers often utilize a line of credit as a tool to help manage their annual operating costs.  Lenders encourage you to use credit lines for appropriate short-term expenses. Prior to using your line of credit for a major farm improvement, piece of equipment, or something that qualifies for longer term financing, contact your loan officer to talk about financing options. We want to help you make sure you are using your line of credit in the most effective manner possible. Fully revolving the line of credit on an annual basis is a requirement of renewing your credit line, so monitoring its use and repayment is essential.

We hope this list gives you an idea of what you should be thinking about during your year-end farm financial check-up.

LISTEN TO Meghan's EPISODE HERE OR FIND US ON YOUR FAVORITE PODCAST LISTENING APP!

Summary

On this episode of the AgVocates Podcast, Meaghan Webster interviews the VP of Sales, Marketing and Operations at C.P. Yeatman & Sons, Inc. and Mother Earth Organic Mushrooms, LLC. Meghan gives us a brief history on how the mushroom industry came to Pennsylvania and how her family has had a hand in several important milestones along the way, like establishing organic guidelines for growers. 

As a dedicated advocate for the industry, Meghan is also an active member of the American Mushroom Institute and the Mushroom Council and shares her perspective on the importance of getting active in commodity organizations as a farmer.

Meaghan Webster:

Welcome back to the Farm Credit AgVocates Podcast. I'm your host, Meaghan Webster, Content and Digital Marketing Strategist at MidAtlantic Farm Credit. I'll start off by saying that I am honored that you chose to listen to today's episode, mostly because the food item that we'll be talking about can be a bit divisive. You can go ahead and take one guess, and you probably nailed it, mushrooms. Personally, I have never understood the whole “is fungi fun or not” debate because I'm a huge fan. Make it a pizza topping, or a main dish, and I have never met a mushroom I didn't like.

Although I could talk all day about food, the rest of our episode we are going to talk about making connections as a farmer. Last month we hosted a three-part webinar series that focused on helping young, beginning, and small farmers get started.

One of the topics that we focused on was really centered on building a network, finding mentorship, and really creating your own resource team. I'll warn you that I was really excited to do this interview, mostly because mushroom farms are really my favorite farm to tour, so I was really excited to hear  Meghan Klotzbach's story about their family's mushroom farm.

After getting to know her a little bit, I am even more excited to talk about her involvement with the American Mushroom Institute and The Mushroom Council. Both of these groups do a ton of work for the mushroom industry, but each have very different missions. The American Mushroom Institute focuses on the legislative and policy aspects of how farmers are able to grow their commodity. The Mushroom Council, on the other hand, helps with the consumer education piece, which helps to sell more mushrooms.

In these organizations, they work together to make sure that as a whole, this industry has a voice in how their commodity is being grown. Without further ado, let's jump right in to our interview with Meghan Klotzbach.

Welcome to the podcast, Meghan. Thank you so much for joining me today. I'm really excited about this conversation. I was hoping we could kind of just jump right in, and you could tell us a little bit about yourself, and maybe your position with your family's farm, and some of your positions with the industry organizations that you're active in.

MEGHAN & THE MUSHROOM INDUSTRY

Meghan Klotzbach:

I'm a fifth generation family member with our family farm, C.P. Yeatman & Sons, Inc. Our brand is Mother Earth Organic Mushrooms as well as New Moon Mushroom, which we created a couple years ago to be our line of conventional produced mushrooms. We grow solely organic in our farms. The position that I hold within our family's farm right now is the VP of Sales, Marketing and Operations. I am mainly focused on our packing facility at the moment, but I've been in all areas throughout our company, whether it's growing, packing, or food safety.

Meaghan Webster:

I feel like that's a really big title, VP of Sales Marketing and Operation.

Meghan Klotzbach:

It sounds bigger than it is.

Meaghan Webster:

What kinds of things do you do on a day-to-day basis?

Meghan Klotzbach:

Like many family farms, there's really no one job that we focus on. We've got about 200 employees, so we need to make sure that we have a good group of management so that they can continuously run all those day-to-day things within our farms and our packing facility.

For us, it's really just kind of focusing on it all. We make sure that we're focusing on the HR side of things, and that things are going as they should be and that our customers are happy. We stay in touch with our sales manager, making sure every day, every minute that we know what's going on with that.

My focus is mainly in the packing facility, making sure that the operations of that are going smoothly, our employees are happy, being taken care of well and making sure that our policies are being pushed out correctly. I also focus a lot on the food safety program. I've been heavily involved in the food safety side of things since I started here a little over 10 years ago. That's always been a big push for me to make sure that we're selling a safe, quality food.

Meaghan Webster:

What would you say is your favorite part about it?

Meghan Klotzbach:

Honestly, I think my favorite part is the fact that I can pay attention to so many different areas, and I don't have to do the same thing every day. Even growing up or thinking about what job I wanted to do when I did grow up, I never wanted to sit behind a computer doing the same thing every day.

I like to be involved in different things and take on new projects, new tasks, new problems, and try to find solutions to them. I would definitely say that is my favorite part of my job is that I can really work with a lot of different people, a lot of different departments, and make sure we're running smoothly.

Meaghan Webster:

I feel like there's so many pros and cons to having a set routine, and it can be really nice to know where you're going to be and what you're doing at certain times, but it is really nice to have that variety and get to work with a lot of people.

Meghan Klotzbach:

It makes it more interesting for sure.

Meaghan Webster:

Could you give us the story behind your family's mushroom farms? Five generations in business is a really long time.

100 YEARS OF GROWING MUSHROOMS

Meghan Klotzbach:

Our story started out as a dairy farm. In 1919, we purchased our family farm that we are currently still growing mushrooms on today. As a family we had already owned dairy on another piece of property in the surrounding area. This was a good opportunity for us to have a larger dairy farm, so we decided to purchase that. About a year later, we got interested in the mushroom growing technology and the different techniques that were going on. I'm going to pause here and give you a quick history of how mushrooms even came to this area.

During the late 1800s, a man named William Swayne, a very successful florist in the Kennett Square area, had this idea to grow mushrooms underneath of his greenhouse benches. He wanted to use up as much space in his greenhouses as he could. He also wanted to be able to grow something in the winter, so he decided to grow mushrooms underneath and really utilize the space better.

He sent out to England and tried to get information from them on how mushrooms are grown. He reached out to them to get spawn, and spawn is the seed to grow mushrooms. The spawn came over from England, and he started growing mushrooms. He had really encouraging results, so he built his first mushroom house in the area. That continued with his family. His son then came back from college, and took over that business, and started to commercially grow that up as well.

After that, they were selling their mushrooms into city markets, and places in this area. Back then, even with a horse and buggy, Philadelphia, New York, Baltimore, DC and Pittsburg were all within a day to get product to these marketplaces. A lot of others in the area started thinking that maybe this was a good solution for them to continue in their farms as well. All of a sudden we started having more and more people growing mushrooms in this area.

That takes us to 1920, when we realized that maybe we should start growing mushrooms, so we actually built our first mushroom house in 1921. 100 years ago this year, so we're celebrating our 100 years of growing mushrooms as a family.

Meaghan Webster:

Wow.

Meghan Klotzbach:

Yeah, it's really exciting. It's really exciting for us to be here that long and continue to still be thriving today.

Meaghan Webster:

You guys are a part of the main history of how it started and where it came from.

Most of the mushrooms that we eat anywhere here in the US are grown in Kennett Square, Pennsylvania, right?

Meghan Klotzbach:

Yep, over 60% of all mushrooms that are produced for the US are actually grown in Kennett Square and its surrounding areas. This Southeastern area of Pennsylvania mainly, whether it's Kennett, up to Berks County, Oxford and areas like that. That's about 60% of the mushrooms for the United States. California, I think they come in second, around 15% or so. A much further down second place.

Meaghan Webster:

Wow.

Meghan Klotzbach:

Yes, Pennsylvania is very strong, and still holds that top spot for mushroom growing for the entire country.

Meaghan Webster:

That's a really big spread. I don't think I realized that it was that much of a difference between Pennsylvania and California. That's pretty awesome. You guys have been involved for such a long time.

What's has working with your family and growing up in that environment been like?

FARMING WITH FAMILY

Meghan Klotzbach:

My entire family does work in the business. Both my parents growing up worked there, so work always came home. It was always discussed at dinner. It was what was discussed in the house on the weekends. We were over there a lot. I remember when my brother and I would get off the school bus at our farm instead of our house. We would just walk up the field to the office. We would finish our homework in the office, walk around and see everybody, and help out in the office.

At that point in time, our packing facility was actually located in the basement of our office. It was a very small area. I remember middle school, I would go down and talk to some of the employees down there, and help them weigh mushrooms. It felt cool to be involved at that age. It was fun.

My brother, on the other hand, he really got involved in the growing side from an earlier age. He loved the idea of growing mushrooms and wanted to know a lot, so he got himself very involved. He loved to go with my dad to do night checks, and see how the mushrooms were growing. That was his true passion from a very early age. For myself, it took me a little longer to realize that I wanted to be as heavily involved as I am today in the business.

Meaghan Webster:

That was going to be my next question.

Did you always want to be involved, or did you have a different idea of where you thought your career might go?

Meghan Klotzbach:

I actually really didn't have much interest at all in being involved in the business, especially in high school. When I was looking at colleges, I really wanted to do something else. When I was a kid, my perception of the mushroom business was that women were always in the office. They just sat behind the computer, working on bills or Excel spreadsheets. That's what I saw and that's what was going on in that time. My mom did the payroll and that was something that I was never interested in.

I never wanted to be a secretary-type person. I never really wanted to be involved in the business, because I didn't really know if there was a place for me and I never asked. It was not something that I cared to get myself involved in. I figured I'd always just go do something else. I actually ended up going to college and getting a Bachelor's degree in Psychology. I absolutely loved learning about all that. I thought about going on to grad school, but then kind of realized that my heart was lying in starting a family with my now husband. I started working in the area that I realized I never wanted to be in. About three years, I realized that I was doing the same kind of work that I didn't want to do at the farm and realized that maybe there was something else out there.

 At this time, my husband was already working for the family business. He went to my dad and told him that I was really not sure what I wanted to do for a career and maybe there's an opportunity here for her. My dad approached me and said that he had opportunities for me. They were developing our Food Safety Program into a much larger program and could use some help with that and with our OSHA Program to keep our employees safe. I came in and I started researching because I had no idea what food safety or what the OSHA policies were. It was something I was never involved with in my life.

I started doing a lot of research and realized that there’s a lot that needs to be changed and done to really take hold of this type of program. After sitting down with my dad and going through it all, I realized it was an opportunity that I wanted to take on. I started taking that on about 11 years ago and have been here ever since. Every year I get myself more involved in different things. Whether that's within our company in different areas or the different industry organizations. I really love being able to take the time and be a part of those organizations. 

Meaghan Webster:

That sounds so satisfying.

From the beginning of not really knowing exactly what you wanted to do and then having your dad help you realize that there was a place for you. He didn’t make you feel like you had to do it, but rather waited until the time came when you realized there were different opportunities that were not just playing in Excel all day

Meghan Klotzbach:

Right, and he's so great about that. He wants to make sure that the business lasts for the next generation, and continues to grow for the next generation. He always wanted us to be part of it, but in our family it's never been enforced. It's not something you have to do. It's something that you need to want to do, and you have to earn it as well. That made it a challenge for me to succeed and it's been great.

GROWING ORGANIC

Meaghan Webster:

Have you guys always been organic or was there a shift at some point towards that?

Meghan Klotzbach:

Actually, in the mid to late '80s is when we decided that we wanted to try out organics and find out more information. There were no other commercial mushroom growers in the country who were growing organically at the time, and there was really no certification specific to mushrooms. If you know much about how mushrooms grow, they're grown very differently than any other crop. They can't really follow the same structure as a field crop, and how they’re certified organic because that's definitely different.

My great uncle, Jim Yeatman actually went and worked with NOFA-NJ (Northeast Organic Farming Association of New Jersey), which was an organic certifier at the time. He worked with them to develop a certification program for mushrooms. He taught them how mushrooms were grown. He had them out to the farm a lot, so that they could really get in-depth knowledge of what was going on to build a certification program to work around mushrooms.

After putting a lot of effort and work into that, we did our transition year into organic production in 1989, and then in 1990 is when we sold our first certified organic mushrooms.

Meaghan Webster:

Wow. That's amazing.

Meghan Klotzbach:

Yeah, it is amazing. We were really the pioneer for that. Back then, organic wasn't much of a thing. It wasn't something that was big in the market. It wasn't a big driver for sales. We really did this because we wanted to make a beneficial impact on the environment. We really felt passionate about organic growing methods to protect our employees and families.

Back in the '30s, ‘40s and '50s, there were a lot of bad chemicals that were being used everywhere. My parent's generation really started to see that, and that's when it started to make a push towards being healthier and safer. They saw organic as a way to really grab ahold of that. That's when they made that decision, and they went for it.

In the first couple of years, we only sold about 1% of our production organically. The rest of our production was sold conventionally. In the late '90s we actually decided not to grow all of our mushrooms organically, because we were losing money every day producing them organically and then not being able to sell them organically. We were just way ahead of the market on that one.

Meaghan Webster:

Yeah.

Meghan Klotzbach:

We switched one of our farms back to conventional and continued to use a lot of our mindset and techniques from our organic growing ways to make sure we were still growing a safe product for our employees and not using really bad pesticides or chemicals on the farm. We were able to then sell our mushrooms easier. We had about 60% grown conventionally and 40% grown organically.

About eight years ago, we made the transition back to 100% organic, and we don't ever plan on going back now. The market is definitely there for it, and we've also gotten very efficient at growing organically, so we're able to do it without losing any money.

Meaghan Webster:

That's really cool. I mean you guys are the OG of organic mushrooms.

Meghan Klotzbach:

Yes we are.

Meaghan Webster:

That is really neat. A different question on the organic piece because that's very interesting. I love that your uncle was a part of developing that whole program.

How many other producers, or other family-owned businesses are organic?

Meghan Klotzbach:

I think there's about four or five, maybe about five large commercial farms who are producing organic mushrooms now. No other commercial farm is to our level or our size or larger producing 100% organic mushrooms.

Meaghan Webster:

That's fun to see the evolution. I mean you guys were doing it before it was cool, and now it's super cool.

Meghan Klotzbach:

Yes. It's kind of hard sometimes, especially for my dad because he was at the beginning of it, so for him it was his baby and now everybody else is doing it.

Meaghan Webster:

People catch on.

Meghan Klotzbach:

It’ll be okay, we were the first.  It's a good thing.

Meaghan Webster:

Exactly.

I would take it as flattery. It's a compliment.

Meghan Klotzbach:

Yeah.

Farmers on the Rise"

Are you a young, beginning, small, veteran, or minority farmer that could use $10,000 toward growing your business? Then you should apply for our 2021 Farmers on the Rise Award. This award will recognize five outstanding agriculturalists who excel in their field, and give back to their community. Find out if you're eligible and apply today at mafc.com/rise. Applications are due by November 1st. Will you rise to the occasion?

STAYING INVOLVED IN THE INDUSTRY

Meaghan Webster:

Can you tell us a little bit about the organizations that you're involved in?

I know American Mushroom Institute and The Mushroom Council. Originally, I didn't know there was a huge difference between the two, so I would love to start talking about some of those organizations and what your role is.

Meghan Klotzbach:

The two main larger organizations for the industry is the American Mushroom Institute, we call AMI, and The Mushroom Council. AMI is a Natural Voluntary Trade Association. It is headquartered right here in Avondale, Pennsylvania, which is great because the majority of our members and growers are located right here in Pennsylvania, so it gives us a much easier access to being involved, which is really good.

It supports the growers, processors, and marketers of cultivated mushrooms in the entire United States. They do a lot of lobbying for different policies to get the policy makers to really understand what we need as an industry and as farmers, whether that's different policies on food safety, the environment, or labor. All of those things are things that that organization can continue working for us.

The Mushroom Council, is actually a National Promotion Council of Fresh Mushrooms, and is actually certified under USDA. It is the National Marketing Association, and that is not voluntary. That is more of a mandatory association or council. It collects funds and then gets a lot of grants to be able to market fresh mushrooms to consumers, restaurant owners, chefs and schools across the country.

They can push it out into many different ways, but they solely focus on fresh mushrooms, so they're not worried about the process. They want to make sure that fresh mushrooms are getting on the plate of all consumers. By doing that, they're increasing the demands, so that we can sell more mushrooms.

Meaghan Webster:

You have positions with both of those groups, right?

Meghan Klotzbach:

Yeah, I'm on the board for both the AMI and The Mushroom Council. This is actually my first year on the AMI board. I've been very involved in the AMI and a lot of subcommittees. I've been the chair of The Mushroom Farmers of Pennsylvania, which is a subcommittee of AMI. Mushroom Farmers of Pennsylvania is specific to things that are going on right here in Pennsylvania, which, like I said, makes up about 60% of all the mushrooms grown for the US. It's a very big subcommittee.

I'm the chair of that committee for multiple years now. This year, I’ve taken a position on the board, so I'm really excited to get even more involved with AMI through that. I am hoping to start my second term on the board with The Mushroom Council next year. That’s been voted on, and we'll find out the results of that coming up here in the next few months, but still currently on the board finishing out my first term. I work with them, and it's been very enlightening to get to know the ins and outs of The Mushroom Council and the board. They don't have a lot of subcommittees to be involved on. It's more the board and their organization that they work with that are really driving it.

Meaghan Webster:

What are some of the things that they work on?

What would you say is the most important initiative that you've helped work on, or are working on currently with either of those organizations?

Meghan Klotzbach:

I'll start out with the AMI. I would say that the most important thing that I've done with the AMI, as well as what they do, is really lobbying for the industry. We work a lot with the local Pennsylvania state representatives and legislators, and then also nationally. We have that table in DC for that voice to be able to tell them what we need. It can be on so many different topics from food safety to the environment, to the huge labor crisis right now in the industry.

We've been working a lot on the Farm Workforce Modernization Act, and lobbying our goals to the policy makers on what we'd like to see within that, and how it can help us. I think the most important thing we do with the AMI is to really get our voices heard. Being a small family farm AMI allows us to have a voice even in DC, something that we wouldn't be able to have without that.

Meaghan Webster:

Our government affairs officer, Kurt Fuchs, does a lot of work with that. He would share all the different initiatives and things that he could help, and really making that connection to the folks that are in Washington making these policies. It's really important to have that educational piece of it. It sounds like AMI really is a cornerstone piece of that for the mushroom industry.

Meghan Klotzbach:

Yes, definitely.

Meaghan Webster:

What about the council?

Meghan Klotzbach:

They've done a lot of amazing things. They do a lot of research on the nutritional values of mushrooms and different things that it can help with. They've done research on prostate cancer and mushrooms, memory and mushrooms. There's so many things that they're doing research on that it's just bringing out some incredible results.

I would say one of the biggest things is they're working with different schools across the country getting mushrooms on the plate of kids in schools. They are trying to get kids to accept and ask for mushrooms on their plate on so many types of meal options from pizza to salad to noodles. If we can get it in kid’s minds, and get them to love mushrooms, it is only going to drive the demand for mushrooms up and for the future.

I think that that's one of the most important things that we can really do is just continuously get out there how nutritional, versatile, and how much better mushrooms make meals. One of the big things that they've created and it's becoming a big trend across the country, is The Blend, and it's when you blend mushrooms and meat, or meat substitute.

Meaghan Webster:

I have heard a little bit about it. I haven't ventured into trying it quite yet.

Meghan Klotzbach:

You should. It is amazing. I struggle to make a burger or meatballs without it. You take around 30% mushrooms and 70% meat. You can definitely go higher on the mushrooms, but that's where the starting point is really. Chop the mushrooms up fine to match the consistency of the meat or the meat substitute that you're using and blend that together. It just makes the meat more flavorful because mushrooms actually take on the flavor of what they're cooked with, which is also amazing.

Meaghan Webster:

Right.

Meghan Klotzbach:

It really enhances the flavor of the meat. It also makes them healthier because you're substituting some of the fat with a healthy non-fat option of the mushrooms.  It's creating a healthier product that tastes better and is more sustainable because mushrooms are extremely sustainable.

The amount of water we use to produce mushrooms is way less than any other commodity. It's great for the environment, great for the person, and it also tastes great. That's a big thing that they've really pushed out and it's an incredible thing to start.

Meaghan Webster:

You don't have to sell me on it. I am a huge fan of mushrooms. My husband not so much. I've had to sneak them in a little bit here and there.

Meghan Klotzbach:

He'll never know in The Blend.

THE NUTRITION BENEFITS OF MUSHROOMS

Meaghan Webster:

It’s starting to grow on him.

We like to go out to restaurants, and we live on the Eastern shore, so we're close to Ocean City, and Delaware with lots of great culinary options.  I feel like I've seen a big spike in the number of plant based alternative meat kind of foods. I see mushrooms lumped in with a lot of those.

What's your take on where mushrooms are going as a nutrition source? Why should we eat more mushrooms?

Meghan Klotzbach:

Mushrooms can really fit in anybody's diet because they're extremely versatile. When you're vegan, they actually are a huge meat substitute. Portabella mushroom is a very meaty, dense mushroom. It has a lot of rich flavors, so that's a great meat substitute on its own even. It fits within paleo diets, and gluten free diets. I mean it fits when you love meat.

That’s what makes mushrooms incredible, is how versatile they are, and that they can be great for anybody. Some people don't like them, or they think they don't like them, but once they really start cooking with them and trying them out with new dishes, it really opens up their eyes to the possibilities that mushrooms can be.

I think they're going to be in so many more people's houses than they even are now. The demand is going to continue to skyrocket just because so many more people are willing to try them and understand how sustainable they are for the environment, how nutritious they are, and how many amazing things they can do for your health.

Meaghan Webster:

They're also kind of considered like a super food, right?

Meghan Klotzbach:

Yeah, I was actually just talking about that with our production manager. They really don't have any calories, fat, sodium, sugar. None of that. It's just amazing nutrients, vitamins that are great for you. Some of the exotic mushrooms have more of a stronger flavor, but the basic Agaricus mushrooms, which are your white buttons, Cremini, and Portabellas, really take on the flavor of what you're cooking it with, and they just give it a great addition.

WHY YOUNG FARMERS SHOULD BE INVOLVED IN INDUSTRY ORGANIZATIONS

Meaghan Webster:

I want to go back to the industry thing a little bit. In August this year, we hosted a Young Beginning Small Farmer webinar series, and one of our webinars was actually dedicated to the idea of networking, mentorship, and growing your network in order to be a better farmer, and be a better producer.

If you were specifically speaking to a new farmer, why do you think it's important to get involved with organizations like AMI and The Council?

Meghan Klotzbach:

I think we're a very unique industry in that about 90% of commercial mushroom farms and packing facilities are part of the AMI Organization, so to say that, it shows you how strong and valuable that organization is. Without those members, the organization would not be what it is today because they need their members. They need their member’s voice to really make change, so I think that that's a really good goal for everybody is to become part of an industry organization that relies on its members and its members rely on them.

Being a new farmer, I think that it's most important because you want to know the accurate information about what's going on, whether that's policies in government, food safety rules that are coming up, or environmental rules that impact your farm. There's so many things that affect farmers today, and so many things that we all have to abide by. To have one place that you can trust to get that accurate information from is extremely important.

The second thing that I think is extremely important is that your voice can be heard. Being a small, family farm, we might not have access to having our own lobbyists work for us and everything like that. It's not something that we'd be capable of doing, and having a voice and a seat at the table, is not something that you could ever compare to. If we have an issue that impacts our family farm, I can actually have that voice heard in DC. That's not something that a lot of farmers can say that they can have an impact and actually reach different people in DC as well as our state government.

A couple of years ago, during the Trump administration, we had a meeting down in DC at the Capitol building just to review labor and where we were as an industry, what we would like to see and what our issues were. We were able to speak directly with the administrators of labor within the White House, so it was great to have a voice with them. We walked out to take a picture and Vice President Pence actually photo bombed us which is pretty cool. He stepped in to say hi. Being a farmer, it's not something that you really get access to, and are able to be a part of. I think that everybody really needs to take on as something that's important to them to help make change for their industry.

The way we look at it in the mushroom industry is if one of us fails, it affects us all. It can really affect the mushroom industry negatively as a whole. We want to be there and support each other. We're definitely competitors and we can compete on sales and customers, but when it comes to making sure that we're sound companies, making sound decisions, we really like to do that together in a room. We really do all sit together and discuss all of this stuff.  So many things can be shared and new ideas can come up that we can make the industry better.

Meaghan Webster:

I think too, there's this added level of accountability to your neighbor. The accountability and responsibility to actually speak up and take ownership of the industry that you obviously love and have grown to make your lifestyle.

Meghan Klotzbach:

When we're all condensed in one area, it's definitely easier to do this. I know if an industry is completely spread out across the country, and it's not condensed in one area, it's definitely harder for farmers to really work together. In this day and age of Zoom, I guess it can make it a little bit easier. We're definitely able to make it work.  About 90% of the AMI members are actually located in Pennsylvania, and that does include a little over 200 associate businesses. Associate businesses are just businesses that support our industry such as a bank.

Farm Credit is actually one of our associate members. Associate members widen out our web to really get to so many people. Having 90% of our members in PA, we really can all sit down face-to-face and be able to work well with one another. In the past, those were really the only voices that were together and now in the world of Zoom and everything else, we can sit together and have a video meeting with people from California, Texas, and Oklahoma, and they can all be involved in the same conversations that we're having here. Recently it's really opened up communication even better, which has been fantastic.

Meaghan Webster:

Having more people at the table and having that new perspective, absolutely. If anything good came out of COVID, I would say that for sure.

Meghan Klotzbach:

Yeah. For sure.

Meaghan Webster:

Everybody has learned how to use Zoom, FaceTime and all of these things. It does make it quite a bit easier.  I do miss seeing people in person, but from AMI's perspective, having that much of their participation in the same area, I can see that making a huge difference, so I would say it's probably just as important for other commodities and new farmers to be looking for those local organizations too, so they can actually get that face time.

Meghan Klotzbach:

Face-to-face is definitely the way to go for sure, but it opens up more possibilities to be able to virtually speak to people also.

CHALLENGES FACING THE MUSHROOOM INDUSTRY

Meaghan Webster:

We talked a little bit about, and I know you mentioned that there's a pretty big labor shortage right now from the mushroom side.

Are there any challenges that the industry is facing that your regular customer wouldn't know about?

Meghan Klotzbach:

We speak with our customers all the time, and honestly our customers are going through the same types of challenges that we are right now due to labor and supply availability. Packaging supply is way down. Raw materials are way down, so while the demand is skyrocketing for the rush of industry, there is definitely a shortage of mushrooms right now due to a shortage of labor and raw materials coming in.

We have some supplies that come in from overseas. Skyrocketing prices of containers to get over here, as well as the ports not having any labor to unload them. It's definitely been really hard over the last year and a half. We're not sure how quickly that's going to turn around. The demand is up, but the supply is not for sure. That's definitely something we're struggling with.

Meaghan Webster:

It probably seems redundant to ask, but I'd like to have that question out there just because I think it's kind of a shock when you're not able to go out and buy the thing that you specifically want.  I think that was definitely a wake-up call for people especially during COVID when you couldn't buy toilet paper, or paper towels, or whatever it was.

It affects each and every piece of the industry. I think it's a good reality check to be aware that it is not because we don't want to give you your mushrooms, it's because we're facing a lot of things that most people don't really see on a daily basis.

Meghan Klotzbach:

I think it's very important for consumers to get educated where their food is actually coming from and what goes into producing that food. Grocery stores and giant chains tend to make it a lot easier to get your food than it used to be. Like you said, it's a good dose of reality of what the constraints are, and for consumers to really become knowledgeable, and now I think it would be fantastic to get them to see that.

WHAT MEGHAN ADVOCATES FOR AG

Meaghan Webster:

I am going to go ahead and give you our sign-off question. I feel like you may have already answered it, but I'm still curious to hear what you think about this.

What do you advocate for in agriculture?

Meghan Klotzbach:

I advocate for the farmer. We are out here, most of us still family farms, trying to make a living. Our entire family is invested and we want to make sure that the policies that are created are actually reasonable to the farmers. Making sure that farming continues because it's such a big part of our country that, again, I don't think a lot of people see and a lot of people understand completely.

Food isn't grown at the grocery store. It doesn't just appear. Farmers need to have a say. Farmers need to continue to thrive and really work towards growing and whether that's within the way of farming they've always done it, or taking on new techniques of farming that can grow them even better. A lot of it is having access to capabilities, to being able to grow and do those things, so there's a lot of environmental things that can hurt farmers in policy making. It's really trying to educate our policy makers on what they can do to institute policies that are actually relative for farmers to work with.

Meaghan Webster:

That is the first time that I've heard somebody bring up policy as what they're advocating for, so we love that. It's always a different answer, and I think it's super important because each of us bring something different to the table, so thank you so much for joining me today. This has been an awesome conversation. I am so excited about it.

Meghan Klotzbach:

You're welcome. Happy to be here.

Meaghan Webster:

Awesome. Thank you so much. Have a good rest of your day.

Meghan Klotzbach:

All right. Thank you. You too.

Meaghan Webster:

Thank you so much for tuning in to this episode today. I hope that you enjoyed it, and found it educational and maybe even a little bit inspiring. If you want to take a next step and connect with Meghan and her family, you can find Mother Earth Organic Mushrooms over on Facebook or you can check out their website at organicmushrooms.com.

MidAtlantic Farm Credit, a members-owned cooperative and an institution of the national Farm Credit system, recently reported their second quarter financial results for 2021. Accruing loan volume for the first six months of 2021 was $2.86 billion, an increase of 2.8 percent compared to the same 2020 period.

“As things picked back up during the second quarter of this year, we remained dedicated to our members and supporting their continuing growth,” says Tom Truitt, Chief Executive Officer of MidAtlantic Farm Credit. “The increases in our financial results compared to last year prove the strength of the agriculture industry and the resilience of our members.”

Net income for the second quarter was $13.3 million, an 11.9 percent increase compared to the second quarter of 2020. For the first six months of 2021, net income of $25.4 million, a 2.3 percent increase from the same period in 2020. Net interest income for the second quarter was $18.9 million, a 9.3 percent increase from the same time period in 2020.

Nonaccrual loans of $40.1 million at June 30, 2021 were down $3.5 million from December 31, 2020 and down $12.7 million from June 30, 2020. The Association’s nonaccrual loans as a percentage of total loans decreased to 1.36 percent at the end of the second quarter of 2021, compared to 1.84 percent at June 30, 2020. No provision for loan losses was recorded in the first six months of 2021, compared to a $3 million provision for loan losses in the first six months of 2020. The allowance for loan losses represented 91 percent of nonaccrual loans at June 30, 2021, compared to 67 percent at June 30, 2020.

Members’ equity at June 30, 2021 totaled $673 million, up 1.1 percent from December 31, 2020, and the Total Capital ratio was 21.84 percent. That number is compared with the 10.5 percent minimum, including the capital conservation buffer, mandated by the Farm Credit Administration (FCA), the lender’s independent regulator. The Association paid a record-breaking cash patronage distribution of $54.5 million to its member-borrowers in March 2021.

Over the past few months, walking into a store and heading to the toiletry aisle only to find bare shelves has been the normal for many Americans. Even ordering toilet paper and “essential” needs online has been a defeating task due to the implications of COVID-19. While the meaning of “why” consumers flocked to overstock paper products in their homes may remain an unsolved mystery, the need for other items in similarity has also put stress on market balance.  

The topic of “toilet paper” can seem somewhat comical when it comes to reasons for an economic wave within a semi-secured industry, but it doesn’t just come down to that single product. When referring to paper products, the generic consumer mostly thinks about their own needs. In fact, that’s generally how the market works considering supply and demand. However, many consumers are ironically unaware of the medical demand for paper products needed to care for patients, even among the “make your own mask” call to action.

“I have said many times before, our industry is often overlooked and misunderstood,” says Elizabeth Hill, Executive Director for Maryland Forests Association, Inc. “Many people don’t get why wood is essential. After all, it isn’t the first thing you think of when looking at the food supply chain.”

A Movement towards Imbalance 

“The pandemic has had a significant impact on forest communities and businesses, just like many other communities and sectors,” comments Nick Smith, Executive Director for Healthy Forests, Healthy Communities. “Early on, the U.S. Department of Homeland Security identified the forest sector as an essential critical infrastructure workforce as the nation responds to COVID-19. Those who harvest, manufacture, and transport wood-based products are helping to ensure our medical professionals, first responders, and the rest of us have the essentials we need to weather the crisis.”

A consumer might gaze into the wall of empty shelving at the local grocery store, and the thought process may be to assume that all ends of the forest-products industry is in the safe zone, economically speaking. Feedback from struggling businesses suggests that having to shift supplies into toilet paper needs has negatively impacted the production of other lumber-based products.

“While the pandemic – and resulting quarantines – elevated demand for products like toilet paper, the resulting economic recession temporarily reduced demand for other wood products, such as lumber,” shares Smith. “The reduced demand has forced some forest-product manufacturers to curtail or temporarily close their operations, which impacts the whole forest-products supply chain. This has created imbalances in the markets, though there are signs the markets have bottomed-out and are very slowly beginning to recover.”

Hill explains, “While we no longer have a paper mill here in Maryland, our wood is used to feed plants in surrounding states. Toilet paper seems to be one item on everyone’s minds these days, but these plants produce a variety of products used to package both food and medical supplies.”

"TOILET PAPER SEEMS TO BE ONE ITEM ON EVERYONE’S MINDS THESE DAYS, BUT THESE PLANTS PRODUCE A VARIETY OF PRODUCTS USED TO PACKAGE BOTH FOOD AND MEDICAL SUPPLIES."

She further adds, “Factories are designed to accommodate large users – restaurants and institutions.” This dip in demand has temporary induced layoffs of employees, shutting off production lines. “Mills are also stepping production down and placing loggers on quotas because they aren’t able to move some of their most valuable grades of lumber due to lack of exports and construction,” says Hill. “These conditions are leading to too much wood in the pipeline, and it will likely be a slow recovery, but we are resilient.”

Cause and Effect within the Industry

As businesses are adjusting to new plans-of-action, Americans are slowly recovering from the aftermath of pandemic life, easing up slightly on heavy demands of medical and household goods. This is a positive move that affects consumers of forest by-products. “If there is a reduced demand for lumber, then manufacturers are processing fewer sawlogs,” explains Smith. “This can result in less residual material available for other products, which in turn drive up the cost for things like animal bedding.”

The Mid-Atlantic region has always been striving to make progress to strengthen its resources and markets. Smith expresses, “The key is having strong markets across the forest sector, because everyone benefits, from the landowner to the end consumer.”

Tom Johnson, President of Eastern Shore Forest Products based in Salisbury, Maryland, announced last August an expansion to meet growing local and national demands in pet bedding and high-quality poultry bedding. He stated in the announcement provided by the Maryland Forests Association, Inc., “A healthy forest is a healthy Chesapeake Bay. We believe that our continuous effort to create new markets for Delmarva-produced forest products will go a long way in ensuring that current forests are sustainably managed for future forests.” Johnson updates, “The expansion is well on its way to completion. We expect to start making new product in mid-July of this year. The first phase of our expansion will see our need for wood increase by about 60,000 tons per year.”

Smith shares, “An important takeaway is that the forest sector is diverse, but interconnected. For example, we can’t have paper, tissue, and hygiene products without raw logs and lumber. It all starts with the demand for logs and the harvesting of timber.” Landowners are encouraged to keep their forests as healthy forests, and incentive is put into place to actively manage their own lands. “Demand for lumber, such as for home construction, is necessary to keep our sawmills open. And pulp and paper manufacturers rely on chips and other residual products from the sawmills to power their own mills, and produce our everyday paper, tissue, and hygiene products,” he shares.

A Second Look

When reaching for that bath tissue, consider the process it takes to create it. Two sources start the ball rolling: virgin pulp from trees or pulp generated from recycled paper that is reprocessed and turned into pulp. A representative from Proctor & Gamble Co. explains, “In essence, pulp is delivered to paper mills that are dried and flattened, turning it into large rolls of paper sometimes considered ‘parent rolls’. The thinner sheets of paper are embossed with a pattern or brand logo to create more thickness and promote absorbency. The last stage is to cut them into toilet paper and roll onto tubes for consumer use.”

The word, “essential” can be defined by many different organizations, but the forest product industry has proven itself to be highly needed in times of both normalcy and crisis. The notation of a forest “people chain”, brought forth by author Wendy A. Farrand, is vital to sustainable forest management. “The pandemic should give us an appreciation for wood-products supply chain and the basic resources we depend on – and those who provide them,” concludes Smith.

Hopefully soon, we can safely return to less concerning days, debating if the toilet paper roll should be installed “over or under”.