LOCAL, NATIONAL AND GLOBAL = AGRICULTURE

IBC Education Foundation’s 22^nd Annual Agriculture and Natural Resources Conference

The IBC Education Foundation’s 22^nd Annual Ag and Natural Resources conference did not disappoint its attendees and either did the weather! It seems our conference brings April showers as well as sleet, hail, and snow. More than 60 attended this year’s conference. Eighteen banks and over 40 bankers participated.

<>Presenting the cold, hard facts about today’s regulatory environment was Larry Martin, Principal, Bank Strategies, LLC. Larry presented information on capital, asset quality, management, earnings, liquidity, sensitivity, and risk indicators. Larry warned CRE is the “hot” issue today and that ag may be next.

This is the first time since I’ve been speaking at this conference (15+ years) that I have really good news about cattle markets,” exclaimed Randy Blach, CEO, CattleFax. Cattle exports are up 24% and steer prices are as well. The cattle industry appears to be rebounding and providing substantial rewards for ranchers. This news brought smiles to everyone face.

Dr. Stephen Koontz, Associate Professor, Colorado State University, did not have as much good news about the grains market. Dr. Koontz indicated grains short-term pricing outlook would remain status quo. In the long-term, strong demand for corn will “hold-up” the grains markets. Prices for fertilizer, chemical and fuel will impact prices.

Colorado’s agricultural and food industry generates $20 billion annually to our economy. That’s billion with a B! Tom Lipetzky, Chief Financial and Operations Officer and Market Division Director, Colorado Department of Agriculture, presented impressive facts about Colorado’s agricultural impacts on our state. Agriculture supports more then 100,000 jobs. In addition, agri-tourism (hunting, recreation, maze farms, etc.) contributes $33 million in farm income and let’s not forget the wine-based tourism which generates approximately $50 million. Tom reminded us how agriculture touches our lives in myriad ways.

Renewable energy continues to be a hot topic. Mario Nicolais and John Snow, Attorneys at Law, Hackstaff Gessler, LLC, presented information on wind energy. Colorado is positioned to be a major player in wind energy.

The Town of Fowler is going off grid. What does this mean? It means, Fowler has plans to generate its own electricity through renewable energy sources. It all goes according to plan, which is being facilitated by Town of Fowler Town Administrator L. Wayne Snider, Fowler will produce enough power through biofuel, manure-based gas, wind and solar to sustain itself. Mr. Snider stated Fowler had already begun its plan and is moving forward despite receiving some skepticism.

April Dahlager, Director for Business and Cooperative Programs for USDA Rural Development, presented information about USDA’s grant programs.

Patrick Kerrigan, Director of Business Development, Farmer Mac, presented information about Farmer Mac and its plethora of programs. Farmer Mac continues its partnership and strong relationship with the Independent Community Bankers of America (IBCA). Providing opportunity and funding for America’s farmers and ranchers.

The stormy weather did not stop recently-appointed State Bank Commissioner Stephen Strunk, with the Colorado Division of Banking, from attending the conference on Friday morning to share with us his perspectives on the dual banking system and the state of our industry. The IBC looks forward to working with Commissioner Strunk.

Simply put—WOW! Dr. David Kohl, Professor Emeritus in the AAEC Department at Virginia Tech, never ceases to amaze everyone. Quick facts presented by Dr. Kohl are: local, natural organics could be 20% of the consumer marketplace; water could replace oil as the limited resource; women and minorities will become major decision makers; and strategically think globally but act and execute locally.

<>Things continue to happen at a rapid pace in Washington, DC. It was a pleasure having Mark Scanlan, Director Office of Agriculture & Rural Policy, ICBA, with us. Mark gave an update on pertinent federal legislation and the fight ICBA is fighting on behalf of the nation’s community banks.

Our end-of-conference cash prize drawing winners:

Clay Sniff, Colorado East Bank & Trust

Virgil Valdez, Esperanza Farms

Tara Rosenbaum, Bankers’ Bank of the West

Thanks to our Generous Conference Sponsors:
Independent Community Bankers of America (ICBA)
Farmer Mac
FHLBank Topeka
INTRUST Bank, N.A.

AGRICULTURE AND RENEWABLE ENERGY ABOUND!

The forecast announced it was time for our 21^st Annual Ag and Natural Resources Conference. Spring rain and snow was certainly a sight for dry eyes and couldn’t dampen the spirits of our conference attendees. More than 30 bankers welcomed the rain and snow while attending the conference.

Dr. Brad Lubben, Assistant Professor and Extension Public Policy Specialist, University of Nebraska-Lincoln began our conference with an in-depth examination of agricultural policy in 2009. Dr. Lubben indicated the 2008 Farm Bill included more than the farm. It included: Commodity programs, conservation, trade, nutrition, credit, rural development, energy, livestock, trade and tax provisions and much more!

Water and irrigated agriculture is a crucial issue for any ag lender and/or farmer. Dr. James Pritchett, Associate Professor, Colorado State University presented information on his research in this area.

Innovation and entrepreneurship in rural areas was a topic addressed by Dr. Hunt Lambert, Associate Provost, Colorado State University. Dr. Lambert indicated there are countless opportunities that exist in rural Colorado for enormous success through entrepreneurship. Dr. Lambert encouraged attendees to follow a four step approach which included: Know the region, find regional leadership, innovation and lastly, support entrepreneurs.

We then proceeded to the National Renewable Energy Lab (NREL) for a tour of their facilities. NREL is amazing and the programs they are working on are mind boggling. Did you know the popular tree is one of the best sources for biofuels? Our tour began in the NREL Visitor Center where an overview of the facility was given. We then proceeded to the top of the mesa to view the solar arrays and the new innovative technology being used to capture solar energy. Lastly, we split into two groups to tour the Compositional Analysis Laboratory where crops are turned from waste into usable fuels.

Patrick Kerrigan, Director of Business Development, Federal Agricultural Mortgage Corporation (Farmer Mac) concluded our day with by presenting information about Farmer Mac and the new programs and opportunities available through Farmer Mac.

Friday morning Barbara Walker, Executive Director, Independent Bankers of Colorado, welcomed everyone. Our day began with a general economic outlook and federal legislative update presented by Mark Scanlan, Director Office of Agriculture & Rural Policy, Independent Community Bankers of America (ICBA). Mr. Scanlan indicated the housing market was at the center of the economic crisis. Mark cautioned the ag sector could see increased financial stress in the coming years. Mr. Scanlan provides invaluable information about ag policy, the ICBA and their lobbying efforts on behalf of the nation’s community banks and we appreciate his input and efforts.

Dr. Stephen Koontz, Associate Professor, Colorado State University presented information about the grain markets, corn, oilseed and wheat. Unfortunately, crops prices are not forecasted to be as high as in 2008. Increasing costs of fertilizer, fuel, chemicals and seeds are all having a negative impact on margins. While prices will remain slightly lower than in 2008, some opportunities may present themselves.

Randy Blach, CEO, Cattle-Fax wrapped up our conference for us with a presentation on the cattle market. Some highlights from Randy’s presentation included: Cattle costs will remain elevated and margin will tighten; the global demand will eventually outstrip supplies, and the recession has slowed demand in the United States and the world; the credit crisis is global and will take months to stabilize; cattle demand is the largest wildcard while the supply side is bullish; Mexico and Canada are our two biggest markets and lost access could cattle markets by $50/head; disciplined approach to risk management is essential.

Congratulations to the winners of the door prize drawing: Craig Schwab, Colorado East Bank & Trust ($20), Jim Van Arsdale, First National Bank Lamar ($30), and the big winner was Alan Peter, Colorado East Bank & Trust ($50). Thanks to Dr. Stephen Koontz for drawing the tickets.

As you read this article it should have become apparent that whether your bank is in an agricultural or a metro area, agriculture affects everyone. The price of meat, poultry, vegetables, grain, gasoline, energy, and everything in between affects your customers and eventually your bottom line. Mark your calendars for April 2009 to attend this invaluable conference.

The IBCEF would like to thank the members of the Joint IBC and IBCEF Ag Committee for their hard work and support

Russ Groshans, Guaranty Bank & Trust
Dave Hubbard, The Eastern Colorado Bank
Jay Goddard, Points West Community Bank
Brett Legg, The Eastern Colorado Bank
Clint Nash, First National Bank Kirk
Myron Sams, First National Bank Hugo
Tom Tomky, Colorado East Bank & Trust
Eric Hoffner, Farmers Bank
Tom Olson, Points West Community Bank

Thanks to our Sponsors

Farmer Mac

FHLBank Topeka

Graham-Lear, Inc.

Independent Community Bankers of

America

INTRUST Bank

RENEWABLE ENERGY BONANZA!

Renewable energy, cattle, crops, economic development opportunities, carbon credits, Farm Credit’s Horizon Project, real estate values were the “hot topics” at the IBC Education Foundation’s 19^th Annual Ag and Natural Resources Conference. Bankers from Colorado and Kansas gather to learn and network.

At the suggestion of our Ag and Natural Resources Committee, we shook things up this year and held the conference in Golden. This helped facilitate our tour of the National Renewable Energy Lab (NREL) facilities. Our day began with a welcome by Chuck Johnston, President, North Valley Bank and IBC President and Barbara Walker, Executive Director, IBC. After our coaches were thoroughly checked and our 60 attendees cleared the security check-in we boarded the coaches for a tour of the National Wind Technology Center. At the wind center we learned that wind is a clean, inexhaustible, indigenous energy resource that can generate enough electricity to power millions of homes and businesses. Wind energy is one of the fastest-growing forms of electricity generation in the world. The United States can currently generate more than 10,000 megawatts (MW) of electricity from the wind, which is enough to power 2.5 million average American homes. Industry experts predict that, with proper development, wind energy could provide 20% of this nation's energy needs. It was amazing to see how large the wind turbines really are and the due diligence and testing that takes place. From the wind site we traveled to the main NREL location in Golden. It was here we learned about building materials and dynamics. The foyer of the building is round and the ceiling has a skylight thus lending itself to easy natural heating and lighting. The windows are strategically placed and sized for optimal day-long lighting. The next time you’re in the four corners area, visit Mesa Verde and discover how the Ancestral Pueblo people maximized their light by utilizing different window shapes, sizes and placement. Next we moved on to learn about reflective lighting, water retention from rain, individual cubical heating and cooling, and so much more. The building is wonder unto itself. Next was a tour of the solar energy lab. It was here we learned about technologies such as photovoltaic (solar cell) systems, concentrating solar systems, passive solar heating and daylighting, solar hot water, and solar process heat and space cooling. The amount of energy the sun can provide is absolutely amazing. Our sincerest thanks to Jim Bosch, NREL Public Relations, for coordinating and facilitating our tour.

Dr. Jason Henderson, Branch Executive and Assistant Vice President Omaha Branch of the Federal Reserve Bank of Kansas City, had the dubious honor of speaking after lunch. Dr. Henderson presented statistics and information on agricultural land values impact on real estate values. Has the tide turned? In today’s market, urban sprawl has increased farmland values. While residential real estate appreciation has slowed, farm real estate appreciation has surged with value coming from recreation (hunting, angling, etc.), energy, and water and mineral rights. Dr. Henderson indicated the key to land values in today’s marketplace is water, water rights and location of the agricultural land.

Dr. Rich Conant, ecosystem ecologist at the Natural Resource Ecology Laboratory at Colorado State University, presented information on the carbon cycle and carbon credits. While a relatively new concept, the carbon credit program is estimated to expand throughout Colorado. Currently, there are only three counties approved for the carbon credit program. The carbon credit program has been established for agricultural producers to be compensated for establishing conservation tillage and long-term grass seeding practices. These practices store carbon and reduce carbon dioxide in the atmosphere, reducing greenhouse gases that contribute to global warming. In addition, carbon cycling can also assist to conserve water and reduce soil erosion. Dr. Conant’s information on carbon cycling certainly engaged the audience. Some attendees are convinced this program will due more harm to the farmers and ranchers than good for environment.

Larry Flowers, National Technical Director, Wind Powering America and John Stulp, Commissioner of Agriculture, joined us to discuss economic development opportunities through wind power. Mr. Flowers and Commissioner Stulp indicated the potential for economic benefits for rural communities is enormous through the development and implementation of community wind projects. Community wind projects can generate revenue for both the land owners via lease payments and for the community through tax revenue. In addition, wind power creates jobs.

Following the heels of Mr. Flowers and Commissioner Stulp, Tony Frank, Renewable Energy Development Director, Rocky Mountain Farmers Union, spoke on the Rural Prosperity Project. Mr. Frank stated a number of diverse partners, including the Independent Bankers of Colorado (IBC), have united to support local communities and rural economic development through community renewable energy projects. The primary goal of the Rural Prosperity Project is to conduct statewide meetings to discuss the opportunities and benefits for renewable energy; present implementation guides for clean energy development; and lastly, to present lending options for clean energy development.

Friday morning started with a wonderful breakfast. Thank you to Fred Bauer, President, Farmers Bank and IBC President-Elect, for pinching hitting for Mark Scanlan, ICBA. Fred presented information about Farm Credit Service’s HORIZON PROJECT. Fred explained the implications of the program and how far reaching the effects could be. Fred encouraged everyone to engage and get involved to help fight against the HORIZON PROJECT. Fred stated we were fighting an uphill battle with Congress on this issue. We appreciate Dr. Stephen Koontz’s, Associate Professor, Colorado State University, willingness to leave his comfort zone of cattle markets and brave the crops markets for us. Dr. Koontz warned that prices will depend on a number of variables: Drought, interest rates, demand, US stocks, and supply. He does believe the price outlook for both short and long-term is strong with wheat and corn being excellent. The demand is for ethanol production for cleaner fuel and less dependence on foreign oil. Randy Blach, Executive Vice President, Cattle-Fax, remarked the global demand for beef continues to grow. Mr. Blach warned consumers are being forced to pay more for food and fuel thus impacting choices made at the supermarket. Cattle producers continue their juggling act to manage supply at an increased cost due to elevated corn prices.

Winners of the exhibit booth bingo sponsored by the IBC Education Foundation were: Clint Nash, First National Bank of Kirk ($20),
Tom Olson, First National Bank of Julesburg ($30), and the big winner was Alan Peter, Colorado East Bank & Trust ($50).

As you read this article it should have become apparent that whether your bank is in an agricultural or a metro area, agriculture affects everyone. The price of meat, poultry, vegetables, grain, gasoline, energy, and everything in between affects your customers and eventually your bottom line. Mark your calendars for April 2008 to attend this invaluable conference.

The IBCEF would like to thank the members of the Joint IBC and IBCEF Ag Committee for their hard work and support

Russ Groshans, Centennial Bank of the West
Dave Hubbard, The Eastern Colorado Bank
Brett Legg, The Eastern Colorado Bank
Clint Nash, First National Bank Kirk
Myron Sams, High Plains Bank
Tom Tomky, Colorado East Bank & Trust
Dale Utley, Bankers’ Bank of the West
Eric Hoffner, Farmers Bank
Ron Hays, Farmers State Bank Fort Morgan

Thanks to our Sponsors

Clark Consulting
Colorado Agricultural Development Authority
Farmer Mac
FHLBank Topeka
ICBA

INTRUST Bank

18th Agricultural and Natural Resources Conference
Thursday and Friday, April 13 and 14, 2006
DoubleTree Hotel, Colorado Springs

WATER, WATTS AND WOW!

Water, alternative energy and fuel sources, America’s 25x’25 plan, grain and cattle markets, crop insurance, Colorado’s entrepreneurial economy, and the new proposed farm bill were the “hot topics” at the IBC Education Foundation’s Agricultural and Natural Resources Conference. Bankers from Colorado, Nebraska and Kansas gathered to learn, network and celebrate Colorado Agricultural Development Authority’s 25th anniversary.

At the forefront of everyone’s mind is water. Did you know that 19 states rely on Colorado water? How much is there? What does the snowpack indicate? Will there be watering restrictions? Can we build new/additional storage? Did you know that all of Colorado’s rivers flow out-of-state? Our conference began with a panel of water experts: Hal Simpson, Director of the Division of Water Resources and State Engineer; Eric Wilkinson, General Manager, Northern Colorado Water Conservancy District, and Marc Waage, Water Resource Engineer, Denver Water. Snowpack levels are encouraging. Late snow storms provided much needed relief in the southwestern part of the state. Some parts of Colorado will continue to be in a moderate drought situation.

Alternative energy and alternative fuel sources is a relatively new topic for our conference. We jumped in with both feet this year and invited a distinguished panel of experts to discuss the issues. Members of our panel included: Jeff Probst, President and CEO, Blue Sun Biodiesel; Ryan Hough, Territory Customer Support Manager, John Deere; Morey Wolfson, Principle, MW Energy Solutions; John Cevette, President, Colorado Corn; and Mike Bowman, 25 x ’25 Working Group. Mr. Probst spoke at our conference in 2004 discussing how farmers and banks could make impact in rural communities by growing and funding the crops to produce biodiesel fuel. Today, Blue Sun is thriving. The IBC Education Foundation applauds the efforts of companies like John Deere in making their equipment environmentally friendly and less costly to operate. Mr. Wolfson amazed our attendees with the statistics about solar energy. Did you know the San Luis Valley is ranked as one of the top locations to harness solar energy? Mike Bowman described how successful wind farms had been in Colorado. Mr. Bowman indicated that high schools and hospitals are taking advantage of this tremendous resource. John Cevette – what a sense of humor! Mr. Cevette provided information on ethanol fuel or E85. Car manufacturers have begun to embrace alternative fuel sources. This would certainly help make the United States less depend on foreign oil. He also presented the scary fact that the average age of a Colorado corn farmer was in the mid 50’s. Alternative energy and fuel sources could play a critical role in revitalizing Colorado’s rural economy and communities. Key to making alternative energy work is providing the infrastructure to allow people and cooperatives to “plug in” to the grid. What are we waiting for? Go green! Thank you to Jim Rubingh, Colorado Agricultural Development Authority (CADA), for moderating our panel.

After an absolutely fabulous lunch Mike Bowman, 25x’25 Working Group representative and Wray, Colorado farmer presented information about 25x’25. 25x'25" is a rallying cry for renewable energy and a goal for America – to get 25 percent of our energy from renewable resources like wind, solar, and biofuels by the year 2025. Mr. Bowman explained that increasing America's renewable energy use will: Bring new technologies to market and save consumers money; reduce our dependence on oil from the Middle East; create good new jobs in rural America; and clean up the air and reduce urban smog and help slow increases in global warming. This is certainly an ambitious goal.
Our three breakout sessions were all well received. Mark Scanlan, Director – Office of Agriculture and Rural Policy, ICBA presented information on the proposed Farm Bill. Mark’s presentation was full of historical and current information about the farm bill. At this point there is no Stephan Weiler, Assistant Vice President and Economist, Center for the Study of Rural America, Federal Reserve Bank introduced the group to Colorado’s Entrepreneurial Economy. Dr. Weiler’s presentation highlighted statistical information about employment in rural Colorado. Stephan also indicated who new enterprises, such as renewable energy, could revitalize some of Colorado’s rural communities. Last by not least, Dennis Kaan, splits his time as Agriculture and Business Management Specialist with Colorado State University Cooperative Extension in the Golden Plains Area and as Golden Plains Area Director. Dennis presented information on a proposed AGR-Lite product. Mr. Kaan explained that AGR-Lite provides whole-farm revenue protection against low returns due to unavoidable natural disasters and market fluctuations that affect income from commodities produced during the insurance year.

After an information-packed day it was time for some fun, food and festivities. The IBCEF and its attendees helped CADA celebrate its 25th anniversary. There was great food, beverages and conversation. We appreciate CADA’s support of the agricultural industry and for sponsoring the evening’s reception.

Friday morning started with a wonderful breakfast. Thank you to Mark Scanlan, for updating our attendees on the federal legislative issues affecting agriculture. It is always a pleasure to have an ICBA representative at our conference. We appreciate Dr. Stephen Koontz’s, Associate Professor, Colorado State University, willingness to leave his comfort zone of cattle markets and brave the crops markets for us. Dr. Koontz warned that prices will depend on a number of variables: Drought, interest rates, demand, US stocks, and supply. He does believe the price outlook for wheat and corn is excellent. Randy Blach, Executive Vice President, Cattle-Fax, believes the cattle market will transition lower in 2006 and is expected to trend lower from 2007 through the end of the decade. Mr. Blach indicated that is been consumption remained flat through the remainder of this decade, the market could absorb nearly one billion pounds of additional supply because of population growth. Fed cattle prices are expected to average near $85 during 2006.

Winners of the exhibit booth bingo sponsored by the IBC Education Foundation were: Randy Younger, First National Bank of Hugo ($20), Slim McWilliams, Citizens State Bank of Cortez ($30), and the big winner was Warren Folsom, Colorado East Bank & Trust ($50). I would like to thank Barbara Walker, IBC, Executive Director, for emceeing this year’s conference. Barbara did an absolutely fabulous job in keeping the conference running smoothly and on time.

As you read this article it should have become apparent that whether your bank is in an agricultural or a metro area, agriculture affects everyone. The price of meat, vegetables, grain, gasoline, energy, and everything in between affects your customers and eventually your bottom line. Mark your calendars for April 2007 to attend this invaluable conference.

The IBCEF would like to thank the members of the Joint IBC and IBCEF Ag Committee for their hard work and support

Russ Groshans, Centennial Bank of the West
Dave Hubbard, The Eastern Colorado Bank
Brett Legg, The Eastern Colorado Bank
Clint Nash, First National Bank Kirk
Myron Sams, High Plains Bank
Tom Tomky, Colorado East Bank & Trust
Dale Utley, Bankers’ Bank of the West
Eric Hoffner, Farmers Bank
Ron Hays, Farmers State Bank Fort Morgan

Thanks to our Exhibitors and Sponsors
Accu-Systems
Block Markus Williams LLC
Central States of Omaha
Clark Consulting
Colorado Agricultural Development Authority
Colorado Housing & Finance Authority
The Dickerson Group
FHLBank of Topeka
ICBA

AG Lenders Conference

AGRICULTURE AND RENEWABLE ENERGY ABOUND!

Thanks to our Sponsors