“The events of 2021 – and the year prior – provided key opportunities for our association to seek innovative solutions to achieve success while also finding new ways to be efficient and strengthen our relationships with customers. The ongoing commitment of our staff, the loyalty of our customers, and guidance by our Board of Directors all contributed to the association’s very strong financial performance last year.”

said Mark Littlefield, President, and CEO of Farm Credit West.

This strong performance provided the association with the foundation necessary for the Board of Directors to declare a cash patronage dividend equal to 125 basis points or 1.25% of the eligible customer-owners average loan balance. Core patronage of 1.00% was distributed this February with the second supplemental payment equal to 0.25% distributed in March. This was a direct result of Farm Credit West’s exceptional earnings and maintenance of a strong capital position in 2021.

As a member-owned cooperative, Farm Credit West has distributed over $1.186 billion in cash dividends since the patronage program’s inception in 2002. The varied geographic and commodity diversity of its activities in California and Arizona contributed to the strong earnings results in 2021. Below is a summary of the Association’s financial performance last year:

• Net income for 2021 was $326 million as compared to $296 million in 2020. Net income in 2021 was positively impacted by an increase in net interest income due to strong growth and performance stability in the loan portfolio.
• Earning assets grew to $12.8 billion at the end of 2021 from $11.9 billion at the end of 2020.
• Asset quality improved to 97% non-adversely classified loans at year-end 2021 compared with 95.6% at the end of 2020. Additionally, nonaccrual loans and other property owned decreased to $71 million at the end of 2021 compared to $100 million at the end of 2020.
• Total capital at the end of 2021 was $2.44 billion compared to $2.39 billion at the end of 2020.
• Farm Credit West’s primary capital ratio measurement is common equity tier 1 (CET1). The CET1 ratio was 13.8% at the end of 2021 compared to a CET1 ratio of 13.9% at the end of 2020. Both were well in excess of the regulatory capital requirements.

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“In times of need, it is imperative our communities have access to healthy foods. Providing financial support to our local food banks helps connect the nutritious foods our customers grow to those trying to make ends meet,”

said Mark Littlefield, President, and CEO of Farm Credit West.

Every year, Farm Credit West prioritizes distributing funds to fight food insecurity through its robust charitable giving program. This year, seventeen food banks received a donation to support their local programs helping families impacted by illness, job loss, or loss of a home.

“Stewardship is at the core of Farm Credit West’s mission. Year after year, we keep a keen eye on the most vulnerable in our local communities and respond with financial assistance. Our Association and its Board of Directors recognize the direct impact these organizations have on our communities and dedicate our resources to help ensure no family goes hungry.”

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“The dramatic events of 2020 imposed significant challenges to growers and agribusinesses throughout our chartered service area, none of which could have been anticipated. While growers and agribusinesses are very familiar with managing the unpredictable, as a member-owned association we felt it was our duty to do everything in our power to support our customers during these challenging times.”

said Sureena Thiara, Chair of the Board of Directors at Farm Credit West.

The combined 150 bps patronage distribution for 2020 represents the highest payout Farm Credit West customer-owners have received since the program’s inception in 2002. In each of the years 2018 and 2019, Farm Credit West distributed 100 bps in patronage dividends to customers.

“At a time when many agriculture producers and agribusinesses are reacting to government regulations and health official recommendations to manage the COVID-19 Pandemic, our customers can be confident their lender is committed to their success. Distributing an additional and unexpected 50 bps in Patronage dividends mid-year was the infusion of cash needed to keep many of our customers’ operations thriving during a highly tumultuous time.”

added Mark Littlefield, President, and CEO of Farm Credit West.

Since the Patronage program’s beginning 18 years ago, Farm Credit West has paid $884 million in cash dividends to customer-owners.

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As members of the communities we serve, Farm Credit has seen first-hand the powerful role that entrepreneurship can play in transforming communities. Just like their urban counterparts, rural communities benefit from the influx of fresh ideas and innovative businesses. Rural entrepreneurs, however, oftentimes face unique challenges: inadequate access to broadband, higher transportation costs, and lack of access to a business network. The onset of COVID-19 has only compounded the stress facing these rural enterprises, turning the economy upside down and forcing many of them to alter their business models dramatically to remain in operation.

That’s why Farm Credit partners with the American Farm Bureau Federation to host the annual Ag Innovation Challenge, a national competition for entrepreneurs who are solving challenges faced by farmers and rural communities. The Ag Innovation Challenge raises the profile of ten rural start-ups each year through extensive social media promotion, connecting these entrepreneurs to networks of rural innovation professionals and providing $145,000 in start-up capital, helping propel these new businesses toward success. Learn more and apply online at fb.org/challenge by Aug. 14.

We’re proud to partner with the American Farm Bureau to celebrate entrepreneurs and to be a partner in rural America’s success for 104 years and counting.

For rural businesses looking to grow, outside investment – particularly from entities that understand the unique challenges and opportunities rural America faces – can be hard to find. But rural entrepreneurs have an important tool they need to succeed right in their home communities, through the Agriculture Department’s Rural Business Investment Companies. These equity funds, uniquely structured to serve rural America, enhance the flow of capital to innovative small rural businesses, spurring economic development, and creating job opportunities for rural families.

Authorized by Congress in the 2008 farm bill, the Rural Business Investment Program grants licenses to newly formed venture capital organizations. To qualify, they must invest 75% of their funds in areas with a population of 50,000 or less and 50% of their funds in small enterprises. They also must raise $10 million in private equity. And that’s where Farm Credit plays a role. Farm Credit institutions across the country continue to invest millions of dollars in RBICs – funds that have supported the food and agriculture value chain, technology-enabled agribusiness, and more. We’re proud of these investments, just as we’re proud to provide reliable, consistent credit and financial services, from operating loans and farm mortgages for farmers and ranchers to financing capital improvement projects in essential rural community facilities, such as hospitals, electrical cooperatives, wastewater treatment plants and more.

Midwest Growth Partners is an RBIC that focuses its investments on growth-oriented companies in the upper Midwest. MGP was founded by native Iowans and supports businesses like Maytag Dairy Farms, a family-owned company that formed its first wheels of handcrafted, artisan blue cheese in Newton, Iowa, in 1941.

Maytag Blue Cheese was on menus all over the world for decades. But, in recent years, its growth had stalled. Family members had moved out of the area, making it difficult for them to provide hands-on oversight of the business. And, in 2016, a voluntary product recall forced a closure of the cheese plant for more than 10 months, affecting wholesale and retail relationships built over generations. Faced with such challenges, the family decided to sell the business on the condition that the new buyer would honor Maytag’s heritage through continued investment and maintain its presence in rural Iowa.

Maytag’s history, and its importance to the town of Newton, made it a perfect fit for MGP’s Midwest-focused investments. The businesses in which MGP invests typically rank as the largest employers in their small communities and MGP is dedicated to boosting rural employment and sustaining the health of rural economies. In January 2019, MGP purchased Maytag Dairy Farms and immediately began investing in the operation to ensure Maytag’s future success.

In order to sustain our rural communities for generations to come, we need a steady pipeline of companies like Maytag.

Now, more than ever, rural companies – and the communities on which they depend – need both the resources and expertise that RBICs can provide.

Source: American Farm Bureau Federation

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