1. Communicate

Begin discussing the future of your farm business now. Get everyone’s goals, objectives, concerns and questions on the table for consideration. Assuming what people are thinking and feeling about the business often leads to misunderstanding and will be detrimental to the whole process.

2. Evaluate

Complete a business evaluation from a financial and production perspective. This evaluation will help identify potential problems in these areas. It is critical to know if the business is earning profits, growing net worth and has the capacity to support another generation of owners and managers.

3. Build a Team

Identify trusted advisors who can provide important advice during the business transition process. Depending on the transition’s level of complexity, several advisors will be helpful to you in identifying and clearing the hurdles you may encounter. These advisors include an attorney, lender, accountant, consultant, financial planner and others who can provide valuable counsel.

It is very difficult for a family or business member to act as the facilitator of the transition team because he/she is busy running the business. Selecting a team leader or facilitator to direct the team is an important consideration.

4. Invest

Expect the process to be an important investment of resources, securing the farm business’s future that you spent a lifetime building. The transition process can take anywhere from six to 18 months to complete. During this time, expect to spend several hours in meetings with advisors, more or less depending on the complexity of your transition.

In addition, there will be some level of financial investment for the services advisors provide. It may take several thousand dollars to complete the transition process. There are financial resources available in some industries to help farm families complete a transition plan. Your advisors may be able to identify and acquire these grants.

5. Get Started

Begin the process by developing a timeline of when you want to complete your initial transition plan. Keep in mind it will take several months. There will be many tasks to complete by the business owners as well as the advisors. Plan meetings when the business is less busy with day-to-day operations. Appoint a team leader to keep the process moving.

Putting these ideas into practice will get you started on the right foot with your farm business transition process, and ensure a properly completed and implemented transition.

Many early 2021 in-person events are transitioned to webinars. Below is your one-stop-shop for all agriculture-related webinars. Check back for updates.

Farming for the Future Webinar Series: Join Horizon Farm Credit for a series of Farming for the Future webinars this winter to position your farm business for future success. Webinars include:

• January 7, 12 p.m. – 1:15 p.m. - What’s Your Business IQ?, Dr. David Kohl
• February 4, 12 p.m. – 1:15 pm. – Shifting Your Mindset and Shaping New Opportunities for the Future, Amanda Radke
• March 4, 12 p.m. – 1:15 p.m. – Weather and Farming: Using Information to Make Decisions, Eric Snodgrass

Learn more and register. 

How to Create a Transition Plan Webinar Series: Join Horizon Farm Credit, Horizon Farm Credit and PA Farm Link for a webinar series on what to consider for a farm transition plan and how to put your plan into action. Webinars include:

• January 11, 11 a.m. – 12 pm. – Introduction to Creating a Succession Plan
• January 25, 11 a.m. – 12 p.m. – Analyzing Your Financial Position for Creating a Succession Plan
• February 8, 11 a.m. – 12 p.m. – Communicating with Your Family about Transitioning the Farm
• February 22, 11 a.m. – 12 p.m. – Questions about the Legal Implications around Transitioning the Farm

Learn more and register. 

2021 Virtual Sustainable Agriculture Conference: Pasa’s annual Sustainable Agriculture Conference is one of the largest gatherings of sustainable farmers, food system professionals and changemakers in the nation. The 2021 virtual conference will be held January 19 through February 5 and feature 90+ sessions with 100+ speakers. Learn more and register. 

2021 Virtual Dairy Summit: The 2021 Pennsylvania Dairy Summit is going virtual! The four-day event, February 8-11 includes a line-up of dynamic speakers, virtual farm tours and other exciting networking opportunities. Learn more and register.

2021 Virtual Mid-Atlantic Fruit and Vegetable Convention: The 2021 virtual convention, held February 8-11, will feature three or more concurrent educational sessions each day on a variety of topics. Learn more and register. 

Penn State Extension Webinars and Courses: Penn State Extension offers a wide range of online courses and live webinars. View a listing of educational offerings in your industry sector. 

2021 Keystone Pork Expo, Poultry Progress Day and Horizon Manure Summit: The convention, now held June 23, is moved to Lebanon Valley Expo Center. Guests will enjoy quality educational sessions for pork, poultry, and manure haulers with outstanding keynote speakers. The PennAg Industries Annual Banquet will be held the evening before. Learn more.

Kristina McAllister, regional manager with Horizon, recently discussed the importance of taking care of ourselves and the resources available to help farmers.

Kristina, you grew up on a farm and your husband is a farmer. From your perspective why is it important that farmers take time to care for themselves, especially during this time?
Farming is a stressful job, even in good times, and the COVID-19 pandemic and resulting economic turmoil have only added to farmers’ stress. Most farmers I know don’t take time for themselves. There always seems to be field work to do, animals to care for and equipment to fix!

Squeezing in a bit of time for rest and relaxation away from the busyness and chaos is essential to help us be our best for our families, employees and businesses. With a refreshed mind, it allows us to better tackle the day’s challenges and react to situations, even those outside of our control, with a clear plan.

We all need to do a better job asking for help when we need it. Instead of piling more on ourselves, we need to be comfortable leaning on others when we need a helping hand or a listening ear.

What resources are available through Horizon to help customers in this area?
Horizon has several resources to help our customers manage stress and seek help. 

One new benefit we are pleased to offer is access to our Member Assistance Program (MAP). MAP is a confidential and free counseling service for Horizon customers and their family members. Help is available 24/7, 365 through a specific phone number. When customers and their family members call the MAP, a licensed, experienced clinician conducts a counseling session and assessment over the phone. Members and family members may opt for a video counseling session as an alternative. Reasons to use the MAP include concerns related to marriage, parenting, stress, depression, work, alcohol, drug use, abuse and grief or as a preventative measure. Online resources are also available for legal services, financial services, seminars, relocation center and a searchable database for providers.

Another new resource from Farm Credit, launched in the last couple of weeks, is a free, online farm stress management course. This course is offered through a partnership between Farm Credit, American Farm Bureau Federation, National Farmers Union, Michigan State University Extension and University of Illinois Extension. It is open public and helps farmers develop the skills to learn how to manage their own stress and support their friends and neighbors.

Are there any other thoughts you'd like to share with our listeners today?
We know that farming is a 24/7 job, 365 days a year. Farmers work hard every day to take care of their families and businesses. I encourage farmers to take advantage of these resources available, and don’t be ashamed to take some time off and take care of yourself.

Are you young and beginning in your career? Whether you’re a first generation dairyman, farming in the evening after your day job, or working as an Horizon loan officer – here are some tips to help you be successful!

Find a mentor.

A mentor serves as a trusted advisor. Someone who you can bounce new ideas off of and share your struggles with, and who is invested in seeing you succeed. Your mentor can be a family member, an individual from your community, an industry professional or a business partner. Many times you develop a personal relationship with your mentor but it’s important to maintain a certain level of professionalism – that way he/she can give you or your business a “kick in the butt” if necessary.

Ask for help.

It’s not feasible to be good at everything, let alone have time for everything (even though I try), so don’t be afraid to ask for help. Some of the most successful business owners I know are excellent delegators – they are good at asking for help; especially when they are facing challenges in their businesses. Use your resources. There are an abundance of industry experts available to help your business grow in areas you see potential.

Try something new.

You learn something new every day – if you want to. It’s easy to practice the model, “if it’s not broke, don’t fix it,” but in order to grow and improve your business or advance your career, it’s necessary to embrace new ideas and try new things, even if it means stepping out of your comfort zone. Take advantage of educational opportunities presented to you. Go on a farm tour, enroll in a class or watch a webinar. Learn from your peers. Absorb everything you can. And most important: don’t forget to share your ideas and experiences to help someone else learn as well.

Assess your progress.

Take time to reflect and analyze yourself and/or your business. Most importantly, celebrate your successes! Set goals and recognize when you achieve milestones. Next, look for areas that could use improvement. Great managers are always striving to be better.

Don’t work too hard.

It’s easy to work, work and then work some more. Especially when you’re just starting a business or are invested in a career you are passionate about. It’s important to have a work-life balance. A little time away from your “desk” will help keep you fresh-minded and energized about your work. Your friends and family will probably enjoy spending time with you, too.

Horizon Farm Credit is invested in helping young and/or beginning farmers succeed! Contact your loan officer or local branch office for more information about educational opportunities and young or beginning and small farmer programs.

The agricultural industry has faced many challenges during the global pandemic including uncertainty of markets, volatile prices and even the health and well being of our families and employees.

Gary Heckman shared his perspectives on how to maintain a positive mindset, especially during times of uncertainty.

You have a long career of working in the agricultural industry. What have you found over the years about why maintaining a positive outlook is important for farm businesses and their families?
I’ve been serving the ag sector for more than 40 years and have met and worked with many farms and farm families. I’ve observed a lot of things during that time. All farms have common uncontrollable things they deal with daily – commodity prices, prices paid for their inputs and weather. At the same time, all of them also have many controllable aspects of their farm businesses. That might be their crop management, how they manage their labor, risk management programs they put in place, business strategies, etc. Some farms struggle with how to deal with all these decisions. Others don’t. So, the big question is, what's the difference? Those that have appeared to struggle less take a more positive outlook in how they deal with these things. And by taking that positive outlook they feel in control, they feel more confident, they have a plan and they expected results, and usually they get better results.

I enjoy quotes, and over the years, a few really impacted my life. One of those quotes is, "You become what you think about."

To me, this quote means that the more you concentrate on something in your mind, the more apt you are to achieve that. If you have negative thoughts or you have a negative outlook, you're likely to have negative results. If you have positive thoughts and consider your success, you're likely to have positive results. Farms with a positive mindset seem to struggle less and have a vision of where they want to go and what they need to do to get there.

What strategies do you use or have you seen others use to help stay positive?
There are three strategies that stand out in my mind that I believe can help anybody be more positive and as a result be more successful. 

First, it starts with being thankful and sharing gratitude every day. Hank Wagner, a dairy producer from Wisconsin, was a speaker at the 2009 Pennsylvania Dairy Summit. 2009 was a very difficult year for the dairy industry. Hank shared things that he was doing for himself, his family and his workforce to keep them more positive and get thing accomplished. One strategy he used with his team was asking family members and employees to start each day by thinking of three things that they're thankful for. By doing that, having those positive thoughts on your mind right out of the gate, a sense of accomplishment, a sense of fulfillment, it does help to keep you on a positive track. That’s been a strategy I now use. I try to identify three things in the first hour of each day and that way they can have an impact on me for the full day.

Second, everybody knows that things will go wrong. And when this happens, it's often pretty easy for us to point our finger at something and blame that individual or that situation. So to have a positive outlook on things, I think first in these situations we need to look at ourselves and look at what might we have done differently that would have produced a different outcome? Rather than us just blaming someone else, let's reflect back on ourselves and say, "What if I would've done this?" or, "What if I would've done that? Could that have had a difference?" By practicing this, it helps us learn how we might have a more positive influence, if that situation arrives in the future.

The third strategy is surrounding yourself with positive people. This is one of the criteria that's high on my list whenever I meet someone new. If they're good old negative Nellies, that's probably the last time I'm going to spend time with them. Ask the people who come onto your farm to bring positivity and good ideas. You don't need other people dragging you down. Over the years I've been on many farms, calling on farmers. And I really appreciated when the farmer says to me, "I'm glad you stopped by today. I needed a little boost." To me, it was just a sign of the impact that we can have by being positive ourselves, but also by having others around us that are positive.

Are there any other thoughts you'd like to share with our listeners here today?
Everyone goes through ups and downs during their lifetime. It could be a personal relationship, some family dynamics, maybe financial circumstances, health situations, other outside influences or many other things. And what I've observed and experienced is that the quality of your life is directly related to how you handle those ups and downs, how we take charge.

Today, we're in uncertain times once again. Remember that you have more influence over the outcome than you realize. Think about the outcome that you want out of a situation and concentrate on it. You're likely to achieve it as you set that new path forward. Concentrate on what you're thankful for, share your gratitude to have other positive influences on your family, coworkers and other friends. Lastly, have faith in your ability to handle the challenges. It's amazing what we can accomplish when we put our minds to it.

Dr. David Kohl, Professor Emeritus Agricultural and Applied Economics, Virginia Tech University

There is an old saying that it’s not the downside of the economic cycle that results in business issues, but the good times. What are some of the bad management decisions that are often made during stellar economic years?

Non-recurring profits
The current positive economic situation in the grain industry is conducive for possible issues. As with many economic events, this cycle is a result of several converging variables. China is stockpiling a supply of commodities and is in the process of rebuilding its protein complex. Adverse weather conditions, particularly in the Southern Hemisphere, have reduced global grain production. Accommodative monetary and fiscal policy in the U.S. and throughout the world has devalued the dollar, which means that U.S. exports are more favorably priced. Is this economic upswing temporary or here to stay? Over the decades of observing agriculture decision-making, I’ve seen long-term financial decisions based on non-recurring profits lead to financial adversity when servicing debt, as well as a strain on working capital and liquidity.

As a general rule of thumb, non-recurring profits should be used to build working capital reserves and shore up the balance sheet. Investments to increase operational efficiency and management should be a priority before embarking on a major expansion. The old adage of getting better before getting bigger is particularly true during the best of economic times.

Financial monitoring 
There can be a tendency to take the foot off the “management pedal” in the ascending part of the economic cycle for farm and ranch profitability. Following a marketing and risk management plan, cropping plan and livestock marketing plan are sometimes placed on the back burner during the good times. While the good economic times can provide a cushion to absorb financial shocks, use this chance to position your business for opportunity in case of an impending down economic cycle. The saying, “When everybody else is running, you walk. When everybody else is walking, you run” applies in this case. This mantra is very appropriate for cycle management. If positioned correctly, down economic cycles can provide opportunities for cost and competitive advantages.

Personal consumption 
Everyone needs to enjoy the fruits of their labor and management; however, this enjoyment often entails extra family living expenses. A case for moderation may be necessary. Decisions made outside the business often mean excess withdrawals from the business. A good personal budget that includes an allocation for enjoying life's pleasures would be a good way to monitor results, and to keep business and personal finances in balance.

In conclusion, weigh the economic and financial pros and cons of making long-term commitments, and think about both the financial and non-financial unintended consequences. Sometimes running the decisions by a trusted mentor or sleeping on the decision can bring objectivity into an emotional process.

Mike Schrey, Horizon Farm Credit’s chief credit officer, reviews the Coronavirus Food Assistance Program (CFAP) which provides up to $16 billion in direct payments to farmers who have experienced losses related to COVID-19.

Help our listeners understand the basics of the CFAP. Who is eligible for the assistance and how does the program work?

As part of the CARES Act, the Coronavirus Food Assistance Program (CFAP) was developed. It provides two main components:

• USDA Purchase and Distribution: which provides $3 billion to partner with regional and local distributors to purchase fresh produce, dairy and meat.
• Direct Support for Farmers and Ranchers: which provides $16 billion in direct support to ag producers where prices and market supply chains have been impacted. This direct support for farmers is what we will primarily discuss here today.

USDA announced the details related to CFAP direct support for farmers just last week and I will cover the highlights on each commodity next. However, it’s important to understand that the funding draws from two separate authorities - $9.5 billion from the CARES Act and $6.5 billion from the Commodity Credit Corporation. The dual authority makes it a bit confusing as it does cause separate payment rates for each commodity based on the underlying authority.

Commodities eligible for CFAP include livestock (cattle, hogs and sheep- lambs and yearlings only), wool, dairy, non-specialty crops which includes many row crops such as corn and soybeans, and specialty crops such as fruits, vegetables, nuts and mushrooms. CFAP payments are limited to $250,000 per person or legal entity, and each commodity has its own set of standards for how the direct payment is structured. 

Let me share some examples of the calculations for a few commodity areas:

• In dairy, a single payment will be made based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundred weight. The second part of the payment is based on multiplying first quarter milk production by the national adjustment factor of 1.014 to adjust for increased spring milk production in the second quarter, then multiplying by $1.47 per hundredweight. Again, the two different payments are a reflection of the dual authorities. In total, this payment amounts to $6.20 per hundredweight for a farm’s production in January through March of this year.  
• For livestock, the total payment will be calculated using the sum of the producer’s number of livestock sold between January 15 and April 15, multiplied by the payment rates per head, and the inventory number of livestock between April 16 and May 14, multiplied by the payment rate per head.
• For corn, the rate is $0.32/bushel for the CARES Act Payment Rate and an additional $0.35 for the CCC Payment Rate. This is applied against 50% of unpriced inventory as of January 15, 2020, not to exceed 50% of 2019 total production.

To ensure availability of funding throughout the application period, producers will receive 80% of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.

It’s clear that there are a lot of details related to CFAP that farmers need to understand. How can farmers learn more and what steps do they need to take to apply?
CFAP is administered through FSA. I encourage all farmers to review the CFAP website for details on their specific commodities.

All farmers must apply for CFAP through their local FSA office, many of which are operating by appointment only right now. The application period officially opened this week on May 26 and will remain open through August 28.

To expedite the process, be prepared before you have your appointment with FSA. If you’ve worked with FSA before, many of the entity and general information forms should already be on file. If not, check out the farmers.gov website for the forms what will need to be collected. Consider all aspects of your operation and information you will need to submit. For instance, if you are a dairy farmer, in addition to having your settlement checks for January through March, gather your receipts for cull cows as well as inventories of grain not under contract and inventories of corn silage on hand as of January 15 which will be paid on grain conversion.

Are there any other thoughts you would like to share?
Some program details are still unclear and may change. Stay informed about any changes by reviewing the website and reading articles in farm publications. Submit an application with FSA as soon as you can. There is a limited amount of funds and when the funds are expended, there’s no guarantee they will be replenished. Apply early, and hopefully you will get your payment quickly to help cover lost income during COVID-19.

We recently interviewed Dave Fleming, accounting officer with Horizon Farm Credit. Farm taxes have many nuances, especially in a year like 2020, and Dave discusses tax planning strategies for farmers.

Let’s begin by talking about the basics of tax planning. What’s the goal of tax planning, and why is tax planning especially critical in 2020 for farmers?
The ultimate goal of good long-term tax planning is to even out the peaks and valleys of income. Oftentimes people think of tax planning as a way to get income down, and that certainly is true sometimes, but there are times when it may be beneficial to bring income up. Tax planning is a two-way street.

One of the main reasons to bring income up is to avoid a Net Operating Loss (NOL). Several tax attributes are lost whenever the taxpayer experiences an NOL. The other reason is to take advantage of tax credits. People love a sale and if you think about using tax credits to pay taxes that's kind of like paying your taxes on sale so to speak. There are many credits that are either use it or lose it, meaning if you don't use them this year, you have lost them forever. Finally, if a taxpayer has marketplace insurance, there often are large advanced premium tax credits. To qualify for these you don't want your income too low or you have to repay them back. Also if it's too high you repay them back. You want to strike an even balance.

To the second part of your question, why in 2020? Well, it's been a year like no other. Who would have thought back in January that we'd have churches and theaters closed for weeks even into months? We had milk sales rationed at the retail level while at the producer level on the farm some farmers were being forced to dump milk. The agriculture industry saw much larger government payments than in the past. Some commodities are up in price; some are down in price. A few weeks ago my coworker Kenny Nearhoof did a great job on a podcast explaining some of the COVID assistance programs. 

The net result is some farmers have substantially higher incomes and there are other farmers that have extremely low incomes.

In the case of a farm that would benefit from a tax perspective to increasing income, what tax planning strategies have you seen effectively used?
I’ve used about five or six different strategies with customers over the years. 

Where it is feasible, one way is to step up income. Obviously a dairy farmer can't make the cows produce more milk to substantially change his income. However, if you think about grain farmers where they have an opportunity to market grain either this year or next year, you can move up sales. 

For example, let's say a farm loses $100,000 this year and makes $120,000 of profit next year. What's the two-year profit? It's $20,000. So, what's the tax this year? It's zero. That sounds pretty good so far. But what's the tax next year? It's over $21,000 for self-employment Pennsylvania and state and local income tax. That is enough to get almost anyone’s attention! Plus, I'm ignoring the federal income tax factor in this because I'm assuming that the NOL from this year's large loss and the standard deduction will offset the majority of that. You can simply just ride out the current interest rate you have. It's not going to cost you anything to do that. I know you're going to be stuck there, but it's one of the options you have.

Now, let’s consider moving sales up to sell an extra $100,000 of product this year. The income this year is still zero and the taxes are zero. Next year, his income will be to be $20,000 because he had the extra sales this year. His total tax bill will be in the range of about $3,600. Therefore, we're looking at saving about $18,000 by good tax planning. 

Now, some people will say, "Well, I expect the price of the commodity to go up next year." I checked corn prices from one of the major buyers in western Pennsylvania and they were offering $4.49 per bushel last Friday. However, good tax planning though to another $0.81 per bushel on those 22,000 bushels that would have to be sold to generate an extra $100,000 income. So, tax planning is worth about $0.81 per bushel in this case, and the offer on July corn next year is only about $0.09 more than what it was last Friday. So you have a surefire win when using good tax planning. 

Other strategies to use include delaying prepaying, or if you have expenses that are due in December wait until January 2 to pay them. People worry about losing a discount on pre-payments for seed corn, but usually the tax savings is much greater than what the discount on seed corn is. 

You can also capitalize larger repairs and then depreciate them over five or seven years. You can slow down depreciation by using straight line depreciation.

Another alternative is to take Section 179 on capital purchases if there's no other earned income. It will be disallowed, and it will carry forward to next year. You have to be careful on this one though because next year you can't decide how much Section 179 you're going to take. It's going to take an amount equal to the earned income on the tax return. 

Also, if you have crop insurance you can delay crop insurance payments on 2020 losses until 2021 for federal tax purposes. Keep in mind that Pennsylvania doesn't allow this for state taxes.

Let’s look at the opposite side. For a farm that would benefit from a tax perspective in bringing income down, what do you recommend? 
First pay any open accounts. That will save on taxes. Also, the interest charges on those open accounts is oftentimes the highest interest that the farmer pays, so there’s a two-fold benefit. 

Secondly, prepay expenses. Especially consider prepaying things like feed on a livestock farm because you're going to use that feed right away in January, and you start getting those prepayment dollars back. Prepaying spring crop inputs is also good. As I mentioned previously, you can sometimes get some discounts on things like seed and lock in favorable prices on fertilizer. 

You can use bonus depreciation and or Section 179 on qualifying capital purchases to bring income down. You can also defer crop insurance payments. In some cases, an IRA can be used to bring down federal tax.

Is there anything else you’d like to share with our listeners about taxes and tax planning?
We have been living most of our lives in a period of falling taxes. Ever since 1980 we've seen falling taxes rates starting with the Kemp Roth tax bill. In fact, even if you go back a little further, President Kennedy had some tax cuts in the 1960s. Our tax rates are at extremely low levels. 

As my coworker Kenny Nearhoof pointed out in his podcast, $100,000 of income in 1980 was equivalent to $316,000 in 2020. However, in 1980 you had a 59% marginal tax rate. In 2020 we have a 24% tax rate. That is huge. Maybe it's time to pay some taxes before tax rates go back up. 

Andy McCarty, crop insurance specialist with Horizon Farm Credit and Crop Growers LLP shares the role of crop insurance in today’s challenging environment and how crop reporting will work in a recent podcast.

COVID-19 has had many significant impacts on agriculture. In these volatile times, should farmers be looking at crop insurance any differently than normal?
In my opinion, this year is no different when considering crop insurance for your business. I believe we should always consistently be proactive when mitigating our risk around the farm. We should always look over all the options to make sure that we're protected when we need it the most. With the drop in commodity prices this spring, revenue coverage should probably be top on producers’ minds, and a conversation that they should have with their crop insurance agent. Crop insurance offers peace of mind and ensures a future for your farm operation.

I'm sure the pandemic has changed the format that you can serve your crop insurance customers. What will be different this spring for farmers in terms of reporting?
That’s exactly right. I will be working with farmers using technology more than ever before. Crop insurance agents are committed to working hard to serve farmers. Our team has been in communication with many local FSA offices, and if farmers continue to report to FSA first, that's totally fine; that's their option. FSA will likely have limited servicing availability at some of the offices. 

As an agent, I am willing to meet ahead with farmers, any time, by phone, email or any type of electronic technology including web meetings or FaceTime. I can review planted acres to make sure the farmer’s FSA reporting goes a little smoother this year. I can then take that report, provide it to FSA, and reduce the farmer’s time spent at the FSA office. Unfortunately, I can't meet in-person on the farm, so that's why we're utilizing technology to help. 
The saying is, "The early bird gets the worm." If they haven’t already, farmers should reach out to their crop insurance agent and set some time aside to develop a plan on reporting acres.

For dairy farmers, how could Dairy-RP help them manage volatility on their operation?
Dairy-RP is a powerful tool, and it's already helping many producers manage through this uncertain time. If you're a dairy producer who is unhappy with the current prices, consider Dairy-RP. Talk to your crop insurance agent or ag business consultant for their perspective. If you are a dairy producer who did not sign up for DMC, Dairy-RP is an option for helping to manage your risk. Dairy-RP is available almost every day the market is open. With Dairy-RP, you can customize it to your herd size, your components, your production and Class III or Class IV. So it's kind of like a Liberty Mutual. With Dairy-RP, you only pay for what you need, and not what you don't.

Are there any other thoughts you'd like to share?
Crop insurance is not just for corn, soybeans, and milk. There are a number of different crops in Pennsylvania, and we have insurance products to cover all of them. Having a knowledgeable crop insurance agent definitely helps farmers navigate through all of the options. 

We have insurance products available for orchards, vineyards, a variety of vegetable crops, to more specific products, like Crop Hail, Rainfall, Whole Farm, and our newest insurance product this year is in hemp. If you grow it, chances are we have the product to meet your needs.

Horizon's directors and employees often talk about how to enhance the benefits of our cooperative business model for customer-owners. I’ve often asked myself, are these benefits real to our customer-owners? Do they see tangible differences that help them achieve their business and personal dreams? 

We passionately hope that we’re leveraging the power of the cooperative business model to your advantage.

About Cooperatives

A cooperative is a business entity owned by its customers. The University of Nebraska’s Cooperative Development Center summarizes the model like this:

The cooperative business model has many appealing components at its core that make its use in rural areas generally easily accepted and embraced. The cooperative model is centered on the user-owned, user-controlled and user-benefited concept of business.

Why the Cooperative is Different

Your Horizon cooperative is different in key aspects and isn’t duplicated by other financial services providers.

• Customers (not a group of investors) own the business. Horizon exists to help all of our members achieve success. We strive to understand and deliver what you want and need rather than to “push” products or services in the pursuit of more profit. Non-cooperatives typically exist to benefit investors, who are not customers, by maximizing the business’s net income and stock value. Our vision to serve for and with you as expressed in our Shared Purpose statement: Inspiring growth in our families, businesses and rural communities.
• We pay patronage. Horizon is profitable, but after setting aside the earnings needed to capitalize the business, we return the balance to you as patronage. Why? Because you own the business.
• The Board of Directors consists of customer-owners. All but two of our 12 Board members are also borrowers who are elected by you. As they set the direction for Horizon, their vision and objectives for the Association should closely align with the best interests of all of our customer-owners. This structure allows you to have a say in the way your cooperative performs.
• We focus on long-term success. Because you plan for your business to be “in the family” for generations to come, we focus on the long-term success of the Association. We understand the future viability of the Association depends on your enduring success and growth. Horizon develops loan officers, consultants, accounting officers and other service providers who can help advise you toward successfully building your business. We also devote considerable attention to learning opportunities such as the AgBiz programs and AgForums. Our Knowledge Center serves as a hub for information and educational resources to benefit current and future customer-owners.

What Should Customer-Owners Do?

I hope you’ll agree that our cooperative business model offers you unique advantages. What responsibilities do you have to help the cooperative grow and thus continue to create value? Here are a few things you can do.

• Vote! Help ensure the Association has a strong group of directors on the Board. They serve a critically important role. Consider running for a Board position.
• Be a good customer-owner. Make loan payments on time and help your Association by providing timely information. Help us keep costs down – the benefits are returned to you.
• Refer new customers to us. We must grow to achieve long-term success.
• Help with the education and development of fellow and future customer-owners.
• Advocate for agriculture to consumers and legislators. Promote our industry and rural communities for the benefit of our future generations.