INSIGHT

SPRING | 2019

farmward.net

We’ve been right here.We’ll be right here.

MORGAN507-249-3196

RENVILLE320-329-8377

info@farmward.net

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A United Team Built Around Our CustomersIf you attended our annual meeting in December you heard me talk about our purpose, vision and strategy, which is an ongoing and compelling emphasis for our company. However, as many of you may have experienced in your own business or farming operation, developing a strategy is the easy part, but it’s the follow through that really matters and many times the plan gets put in a binder, filed on a shelf and is never looked at again.

Considering the current environment, success is not a guarantee. That’s why it is imperative that we follow the roadmap we have developed, engage in our initiatives and measure our progress. The system that we use to do this is called Balanced Scorecard. This concept is not unique to Farmward; many companies around the world use this process with great success. The Balanced Scorecard system gives us a clear way of communicating what we are trying to accomplish, it helps us align all aspects of our business with our strategy, it helps us prioritize projects, products and services and it helps us measure and monitor our progress towards our targets.

As we continue to embark on our journey of building our Balanced Scorecard, the recurring question is, what are we really building towards?

Our Balanced Scorecard is developed around four perspectives or building blocks:• Our Culture and Our Employees• Our Operational Excellence• Our Customer Intimacy• Our Financial Performance

While each of these are incredibly important, there is one focus that all of us at Farmward believe in. That focus is having a united team built around each of our producers. Below is a slide that was presented at our annual meeting that illustrates that focus and is what we truly believe in; everything we do is centered around the producers and owners we are here to serve.

I have said it in the past and I still believe it to be true today, few companies o�er or have under their umbrella, the core proprietary products and services that Farmward Cooperative does.

Dave StukCEOO: 507.249.3196C: 507.381.2331Morgan

I have said it in the past and I still believe it

to be true today, few companies

offer or have under their

umbrella, the core proprietary

products and services that Farmward

Cooperative does.

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As we continue to focus on your needs, we have developed a new line of proprietary o�erings: ULTIGRAIN™ and ULTIFARM™. As you read further into this newsletter, Craig Hebrink will talk about ULTIGRAIN and Jim Boyle will cover ULTIFARM, both giving you some insight on why these brands are important to you and to Farmward.

We cannot forget the proprietary products we o�er on the AgQuest side, including a complete finance program that can be tailored to the needs of your operation, crop insurance, property & casualty insurance and equipment leasing options through our subsidiary company, Northland Capital.

Although the past couple of years have been challenging for all of us, we know that it’s our relationships that will see us through. We are committed to building those type of long term, solid relationships with our customers and because each of you are unique, that means taking time to build those relationships one by one.

How does the whole concept of building a united team around each of you look like in real life? I would love to say that it is perfect, but as you know in your own farming operation, there are areas that work well and there are areas that need improving. However, because each relationship is unique, it seems that the strong and not so great areas are di�erent for each. Through our focus on the Balanced Scorecard, we want to improve in each area so that there is no doubt that you, as an owner and customer, will choose Farmward first as your primary provider.

Enjoy easy access to your:

Scale Tickets

eSign

Contracts

Pre Paids

THE NEW & IMPROVEDFARMWARD APPIS COMING SOON!

Commodities

Futures

Cash Bids

& More!

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First Official Annual MeetingOur first o�icial annual meeting as Farmward Cooperative was held December 19th. As you may recall, even though we held our meeting last year as Farmward, we were still required to present our financials as separate companies for fiscal year 2017. With a year under our belts, it was exciting to present an overview of all the changes and improvements that have taken place over the last year.

Even as a board member, it’s hard to speculate what kind of attendance you will have at the annual meeting. Weather is always a factor of course, as well as everyone’s personal schedules, but most of all, it’s hard to get a feel for how engaged members are in what’s happening at their cooperative. In talking with other cooperative board members, it seems to be the consensus that attendance at annual meetings is dwindling. This is very discouraging. However, Farmward seems to be the exception. Historically, both legacy companies have always had good attendance and I’m happy to say that this year was no di�erent. It was wonderful to see so many people take time out of their busy schedules to attend and be so engaged with the co-op. Hopefully this tradition will continue. The annual meeting gives members an opportunity to hear about the financial health of the co-op first-hand from the auditors, as well as reports from management. You also have the opportunity to share a good meal while visiting with friends and neighbors. THANK YOU to everyone who attended.

Meetings o�er insight and educationAs we move through the winter months it seems like there is a never-ending amount of meetings to attend. This is no di�erent for your board of directors. Over the past several months, members of the board have taken time to attend several board and cooperative educational workshops, as well as annual meetings of our regional partners: CHS, Land O’Lakes, Minnesota Grain and Feed Association, CoBank and several others. These are important for us to attend, as they give us an opportunity to hear, learn and understand what is happening in the industry, as well as participate in the governance of those companies. They also give us an opportunity to network with other co-op directors, so we can share concerns and discuss topics of importance. The insight, networking and educational opportunities these meetings provide are invaluable and help us serve the members of Farmward better.

Six-month auditAs we move into March, the end of February marked the first six months of fiscal year 2019. With that said, the auditors are preparing our six-month audit, as they have traditionally done. As always, it is important to the board and management to maintain financial strength, as well as a strong balance sheet. A six-month audit gives us an opportunity to make sure we are on the right track and make adjustments as needed.

Look to Farmward this springWith spring right around the corner, I would also like to thank you for your past and present business and your continued loyalty to Farmward in the future. Farmward is here to serve all your needs, including fuel, feed, seed, crop inputs, grain marketing, financing and insurance.

As always, if you have questions about Farmward, please contact a member of the Board of Directors or member of the management team. We are more than happy to answer your questions or listen to your concerns.

Wishing you a safe spring!

Calvin AaronsBoard ChairmanC: 320.212.0340

The annual meeting givesmembers an

opportunity to hear about the

financial health of the co-op first-

hand from the auditors, as well as reports from

management.

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Craig HebrinkVice President of

Grain & FeedO: 320.329.8377C: 320.894.8796

chebrink@farmward.netRenville

Spring is a Time for Transition and Renewed OptimismMarch is a month of transition. Winter sports conclude with the high school state tournaments for basketball, wrestling and hockey and practice begins for spring sports. Major league baseball moves from exhibition games to regular season games with opening day on March 28. The Christian church goes from the season of Epiphany to the season of Lent. The throngs of Winter give way to the new growth of Spring. It is a time of freshness, a time for a new start and a time of renewed optimism.

As a producer, you have experienced this period of transition many times. You have reviewed the results of last year’s crop and have spent the winter months planning for the upcoming season. The calendar now says let’s switch from the planning stage to the action stage. The planting of that crop takes place with confidence that the seed you put in the ground will grow and transition into a bountiful harvest.

Transitions in the grain department In our grain division, we also have transitions. Because of market conditions, we have converted from shipping a lot of grain this winter to storing grain. As a grain elevator, our job is to do what the market is telling us to do. Right now it is saying we will pay you to store grain, especially soybeans. The futures spreads have basically been as wide as they can go and thus the reason for us carrying soybeans. This carry extends out into the year 2020. Given this scenario, our operations are making plans right now to transition from normally being empty of soybeans by fall, to carrying soybeans through the fall harvest. Market conditions can change and if they do, then we will adjust to that change.

Our Grain Market Advisors are continuing to try and transition the way you market grain. One such way was through the introduction of our ULTIGRAIN™ New Crop Corn Averaging Contract. We introduced this in January and were very pleased with the number of bushels

that you signed up using this marketing alternative. We are now in the process of marketing those bushels. Our goal is to shift the focus for marketing grain from an on-the-spot type selling decision to a holistic approach. Please contact one of our Advisors for assistance.

Another transition for our grain department is what I referenced above: ULTIGRAIN. If you are wondering who or what that is, let me clarify. Going forward, our grain marketing services will be referred to as ULTIGRAIN. The name represents what we call a “family” brand or an extension to our already established Farmward brand. As an extension, the name ULTIGRAIN was developed to help customers distinguish Farmward’s grain marketing services from other grain marketing companies. When it comes to who you choose to do business with, Farmward is just one of your many options. Because we promote the same products and services as our competitors, your perception may be that we are all the same, when in reality, we’re not. As your cooperative, we provide our patron-owners with unique marketing programs and tools, exceptional service and unparalleled expertise. To us, and hopefully to you, ULTIGRAIN is a symbol of those qualities.

Feed department experiencing growthWe are very pleased with the continued growth that we are experiencing in our feed division. Through the first 5 months of operations our tonnage is up 19% year-over-year. With this increase, the feed team has done a great job of adapting delivery schedules to make sure all customers are being serviced.

We really appreciate the opportunity to earn your business and for your continued support. I don’t know about you, but I hope that Punxsutawney Phil was right when he didn’t see his shadow so that we can have an early transition out of the cold to warmth of a new period. Have a great Spring!

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Discipline Is Important In A Marketing PlanWhen it comes to selling your crop, everyone should have some type of marketing plan in place and be disciplined in following it. A marketing plan gives you the opportunity to target areas so IF the market reaches that point, a sale will be made. A marketing plan that involves options, defines your risk, sets a floor in case of a severe market downturn and also gives you the opportunity to move your sales higher if the market should allow. Unfortunately, there is no crystal ball or magic wand that will predict when the market will hit its high and what that price will be. Whether you use futures, options, flat price or any combination of marketing tools, you should protect the prices the market is o�ering, even if they’re not exactly what you were hoping for. Keep in mind, more importantly than putting a position on to start a marketing program, is managing that position in a disciplined manner regardless what market tools you decide to you use. Marketing is not about predicting price, it’s about protecting price.

We understand that this is easier said than done, but the Farmward Grain Marketing Advisors can help you put together a plan that fits your style of marketing. We encourage you to contact one of us today.

Don’t forget about short-dated optionsWhether we like it or not, these next few months are usually very key when it comes to grain marketing and consequently, your farm’s profitability for this year. The last few years have shown seasonal tendencies of the grain markets to spike when we’re uncertain about production (both here and in South America) and then collapse once we realize that even though we ran into some weather hiccups, the crop still looks good enough going into the latter half of summer. Unfortunately, the initial bullish news followed by a rapid crash has left many producers with piles of unsold grain coming into the last few harvest seasons. As you’re weighing whether to sell or hold over the course of the next couple months, don’t forget about short-dated new crop options. A short-dated new crop put option is a sensible

way to guarantee a floor on new crop bushels without “breaking the bank” on option premium.

Put options are a marketing tool typically purchased in order to protect downside and maintain upside on undelivered bushels (i.e. grain in bins on-farm, new crop). We tend to see that if a producer considers purchasing a put option during a spring rally to protect new crop grain, the premium tends to be expensive enough to deter that person from following through on the hedge. The main reason the premium on those puts seems expensive is because of time value. A new crop soybean put would be based o� November futures, while new crop corn is based o� December futures. As a result, the buyer of those put options is paying for upside participation in the market until those options expire October 25, 2019, in the case of soybeans, and November 22, 2019, in the case of corn.

An alternative is the short-dated new crop put, which is still based o� the underlying new crop contracts (November and December futures), but allows a producer to shorten the time span that they want to participate in the market. For example, at the time of writing this piece, a November at-the-money soybean put cost 49 cents. That option would keep you in the market until October 25, 2019. Comparatively, a July short-dated new crop put with the same strike price cost 33 cents, while a June SD new crop put cost 26 cents. Those options would leave you with upside until June 21, 2019 and May 24, 2019, respectively. As we have all seen, the soybean market can move a lot more than 33 cents in these upcoming months and a put option gives you the peace of mind that you have a floor locked in with unlimited upside until your chosen date. These tools can be especially e�ective around major report dates, such as the March 29th Planting Intentions/Grain Stocks and June 28th Grain Stocks.Please contact a Farmward Grain Marketing Advisor if you have any questions regarding these tools.

Joe HennenGrain Origination LeadO: 320.329.8377C: 320.212.9457jhennen@farmward.netRenville

Kurt SoupirGrain MerchandiserO: 507.249.3196C: 507.829.9567ksoupir@farmward.netMorgan

John McNamaraGrain Marketing AdvisorO: 320.253.1811C: 507.894.0170jmcnamara@farmward.netOlivia

Jalen PietigGrain Marketing AdvisorO: 507.249.3196C: 507.430.4307jpietig@farmward.netMorgan

Mike KohoutGrain Marketing AdvisorO: 320.826.2157C: 507.430.4870mkohout@farmward.netDanube

Scott PotterGrain Marketing AdvisorO: 507.249.3196C: 507.430.1808spotter@farmward.netMorgan

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MORGAN

Diligent in Keeping Accounts CurrentWith snow drifts on some farms 15 feet high, it’s hard to imagine the fresh smell of dirt as we begin our next growing season! However, that will come sooner than we think. Most of you are well prepared for the upcoming season and have spent the cold winter planning, consulting and getting equipment ready for the spring!

We are proud of how you, our customers, have been diligent in keeping your accounts current and have kept your cooperative’s receivables at an acceptable level. We do not take that lightly and greatly appreciate your loyalty. Your actions a�ect all the members – so thank you!

As we ready our fields and finances, it is a good time to remind our valued customers of our credit terms. A well-run operation also includes timely payment of accounts in order to avoid additional fees that ultimately a�ect your bottom line.

A summary of our credit terms is printed below. If you would like a complete copy of our Credit Policy, please contact me and I will be happy to get that to you.

• Standard Payment Terms - payment for all purchases are due by the 15th of the month following the month of purchases.

• Finance Charges - purchases which are unpaid by the 15th of the month following the month of purchase will be charged a finance charge equal to 1.5% per month (18% annually), assessed on the 16th of each month.

• COD – any accounts unpaid past 60 days will be put on a “cash only” basis until their account is made current. At that time, we will reassess the credit worthiness of the account.

• Specific Terms - Grain - payment for all grain purchased from Farmward is due 15 days from the date of purchase.Energy - all energy products will receive a 5% discount if payment is received by the 15th of the month following the date of service.Cardtrol - accounts unpaid beyond the 15th are subject to having their cards locked out.Feed - toll mill/large volume accounts are scheduled to make payments on the 15th and 30th of each month. All other feed purchases are due under the standard payment terms. Agronomy - the standard payment terms apply to all agronomy sales.

As always, if you have any questions on your account or need to discuss payment options, please give me a call at 800-962-7007 or email me at chamre@farmward.net.

As I ponder the busy season that is a few short months away, I am reminded of the most important part of your operations - you and your family! Please be reminded to work safely, we certainly value you and your wellbeing. Thank you for choosing Farmward, we are eager to partner with you in your successful operation!

Carla HamreCredit ManagerO: 800.962.7007

chamre@farmward.netRenville

ULTIGRAIN™ Seasonal Average Corn ContractDuring the month of January Farmward o�ered a seasonal averaging corn contract. Enrollment was excellent. For those of you who enrolled bushels into the contract, this was a good way to get initial sales on for the new crop marketing year or to add to previous sales. Sales will be made every week for 23 weeks to determine the average price, with the final average price being determined on July 10th. Historically, the charts have shown that marketing during this time frame put sellers

into the top third of the sales price for the year. However, just like in any market, past history does not guarantee future performance. We hope this contract proves to be beneficial for producers.

DATES TO WATCHMarch 29: Grain Stocks and Prospective Planting ReportApril 1: Crop Progress Report starts and continues each Monday throughout the growing season.June 28: Planted Acreage Report.

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With the spring season in sight, inventories look good on the majority of crop nutrient products. The big question is how many acres of corn are going to be planted? Nationwide we are seeing high demand and strong pricing on ammonia, UAN, starter fertilizer and sulfur and weaker news on urea and phosphates, although still not to the lows of fall application price levels. As spring nears we will likely see increasing price levels due to a spike in demand. With spring looking to be on the later side, our goal is to have all of our spring product on hand prior to the start of spring planting.

Dicamba training needs to be completedFor 2019 crop protection we are seeing a strong demand for Dicamba and Liberty® soybeans. As a reminder, in order for you to spray Xtendimax®, Engenia® or Fexipan™ for the 2019 season, you will need to complete your annual training prior to picking up these products this spring. We held training in February with over 150 growers attending. If the demand is there, we will look at the possibility of an additional meeting at one or more of our locations.

Enlist E3™ approvedIn the news recently was the approval of Enlist E3™ soybeans from Corteva™. This year, the majority of available Enlist E3 soybeans will be planted for seed production. This new technology will give growers additional options to improve weed control on their farms and provides tolerance to 2,4-D, glyphosate (Roundup®) and glufosinate (Liberty®) herbicides.

New ULTIFARM™ – Comprehensive Agronomy Solutions You may have seen through advertising or your account manager that Farmward has developed our own line of proprietary crop protection products, branded ULTIFARM™. By branding our own line of products, Farmward can select and o�er you the best products available at the best value, while also simplifying your buying process by eliminating duplication. Currently, the ULTIFARM brand o�ers a select group of adjuvant products. However, we foresee adding additional crop protection products in the future.

We are looking forward to the 2019 growing season when we can work together to start implementing your crop plans. Before you know it we will be standing in your field alongside you analyzing your crop’s progress.

Jim Boyle Crop Nutrients & Crop Protection MgrC: 507.227.1921 jboyle@farmward.net

Brett BraulickCo-Seed Division MgrC: 507.227.6378bbraulick@farmward.net

Matt PietigHarvestMax MgrCo-Seed Division MgrC: 507.430.2127mpietig@farmward.net

Marcus HeilingHarvest Max C: 507.430.2205mheiling@farmward.net

Gerry KodetSr. Sales & Product Mgr C: 320.894.8798gkodet@farmward.net

Rick KastnerAccount Mgr, ComfreyC: 507.404.0082rkastner@farmward.net

Craig FredinAccount Mgr, ComfreyC: 507.227.5425cfredin@farmward.net

Ryan KieckerAccount Mgr, Danube/OliviaC: 320.894.6798rkiecker@farmward.net

Mike FilzenAccount Manager, DanubeC: 320.522.1041mfilzen@farmward.net

Spike In Demand May Increase Prices

UltiFarmAdvanced

HSMSO

UltiFarm EliteDrift & Deposition

UltiFarm Power Adjuvant

UltiFarm PrimeAdjuvant

UltiFarm Tank Cleaner

UltiFarm Ultra AMS+NIS

UltiFarm ProHSOC

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Mark VogelAccount Mgr, MorganC: 507.220.0340mvogel@farmward.net

Sam HenriksenAccount Mgr, MorganC: 507.829.4660shenriksen@farmward.net

Tim Woelfel Account Mgr, MortonC: 507.828.7238twoelfel@farmward.net

Mark KubeshAccount Mgr, MortonC: 320.522.3765mkubesh@farmward.net

Cole GigstadAccount Mgr, Sacred HeartC: 320.522.0142cgigstad@farmward.net

Joel HeilingAccount Mgr, SpringfieldC: 507.227.4606jheiling@farmward.net

Rob DalsgaardAccount Mgr, SpringfieldC: 507.766.1885rdalsgaard@farmward.net

Kyle VeenstraAccount Mgr, SpringfieldC: 507.430.6323kveenstra@farmward.net

Jason HeilingAccount Mgr, WabassoC: 507.430.6997jaheiling@farmward.net

Dan MathiowetzAccount Mgr, WabassoC: 507.530.2698dmathiowetz@farmward.net

Factors That Impact PerformanceThe decision on which products to purchase and where to place them can be challenging. There are many factors that can impact performance. That’s why working with your local Farmward account manager is so important. Understanding product strengths and weaknesses can be the di�erence between success and failure and taking a cookie cutter approach will only lead to disappointment. Farmward can help you maximize your profitability for the upcoming season by making sure you are placing the right products on the right acre. When making a recommendation, your account manager will consider all aspects of your operation including your planting equipment, tillage system, crop rotation, fertility program and yield goals. Knowing your farms fertility levels, previous yields, drainage, and desired outcome through our precision program will also give you the best opportunity for maximizing the potential on each acre. Your account manager knows the unique characteristics of each hybrid or variety and understands which ones will be most relevant to your operation, aiding in your decision-making process. Some characteristics to consider when choosing seed varieties are yield potential, disease tolerance, trait package, drought tolerance, root strength, stalk strength and ear flex. Each of these attributes can impact the product’s ability to perform in di�erent environments.

Data is critical in decision makingEvaluating local yield data from 2018 was di�icult due to the excessive amount of rainfall most of us received, but we are able to utilize data from manufacturers in di�erent geographies but similar environments. Data gathered from tools such as FieldView™, WinField® United Answer Plots and our own precision data is critical to assisting you in making seed buying decisions. Analyzing data from those tools allows us to identify trends on products to maximize the return on your investment.

Analyzing disease potentialAs we continue to plan for spring planting, we need to keep in mind the fields you are rotating back to that were a�ected with white mold and various other diseases. Choosing a soybean variety with a good white mold score and a fungicide application as a pre-emerge or post options at R1, is the best defense against the disease.

Re-gridding fieldsOne last item to touch on is grid sampling. Grid sampling should be done every 4 years, so we encourage you to contact your account manager to see which fields are due to be re-gridded. Having your field re-gridded is critical to a successful intensive soil sampling program. This allows us to return to the original geo referenced points to re-test and evaluate your fertility program. With lower commodity prices, getting your fields re-gridded is also very important in maximizing the e�iciency of your inputs.

With fall fertilizer applications ending earlier than hoped due to weather, this spring looks to be a busy one. Contact your Farmward account manager for help with your spring planning and lining up grid sampling for summer.

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If you are traveling east of Springfield on Highway 14, the illusion of driving directly into the Farmward grain, agronomy and energy terminal cannot be eluded. On a sunny morning, the horizon outlines the impressive landscape of the giant cement grain silos, large steel grain bins and row of massive fertilizer domes. The Springfield terminal is one of two “hub” locations within our system and from a producer’s perspective, the facility o�ers everything but the kitchen sink, including flat and upright grain storage on the Canadian Pacific Railroad, crop nutrients in both dry and liquid form, crop protection products, seed, refined fuel, propane and serves as our southern territory central dispatch and operations facility.

The Springfield terminal first took shape in 1974 when seven local co-ops came together to purchase the site and form the Southern 7 Cooperative, a joint venture with the intent to ship 75-car unit trains for export to the west coast. In 1978, Morgan Farmers Elevator bought out the other six cooperatives for sole ownership of the facility. More grain storage was added in the coming years, including 4 concrete silos and 2 – 285,000 bushel bins.

In 1984, Springfield Farmers Elevator and Morgan Farmers Elevator merged to form Harvest Land Cooperative. Again, more grain storage was added over the next 12 years. The fertilizer plant was moved to the terminal in 1998 with the construction of a 30,000-ton fertilizer plant. More construction was done in 1999 with a new o�ice, seed warehouse and chemical plant and warehouse.

Over the next 16 years, Harvest Land continued to expand at the site in all aspects of the business by increasing the rail capacity to 110-car shuttles, adding 1.5 million bushels of upright grain storage, 4 million bushels of flat storage, 2 million bushels in bunker space, another 20,000-ton fertilizer dome, a new shop, chemical building and additional seed warehouse space, as well as 500,000 gallons of liquid fertilizer storage.

Today, Farmward’s Springfield facility o�ers grain, agronomy and energy capacity that is unmatched by few and is a true advantage to our customers and patron-members with convenient access, speed and e�iciency, marketing opportunities, product availability, timely and e�icient service, and most of all, employee dedication and expertise.

SpringfieldSpringfieldTerminal

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Becky GuldanReid ZietlowRyan AndersonJason BeadellMark DauerGarett JennigesWilliam JensenGregory LangNathan Langseth

Dakota LarsenTina MeineDarin ReinhartDean SchneiderBryan TrebeschTaylor Van BataviaSteven WersalTonia RichertRobert Dalsgaard

Joel HeilingKyle VeenstraScott ArnsdorfKyle RogotzkeJudith AugustinTodd AndersonDaniel DomeierAlan GroebnerJoseph Guttum

Cletus LudewigTravis MatterJames ReedJason TrebeschAdam UtzRoger VaskeTyler LangJason FiedlerTerry Jensen

Travis WendtGilbert AndersonDave Gatzla�Austin PendletonMelissa RobertsonRick Kleinsasser

Unmatched by FewUnmatched by FewThank you to all the dedicated and hardworking employees at our Springfield location:

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Pat MachtEnergy Manager507.430.2233pmacht@farmward.net

Curty MeyersEnergy Sales507.430.1884cmeyers@farmward.net

Travis WendtEnergy Sales507.227.7119twendt@farmward.net

Winter weather put us to the testThis winter has been rather challenging in the Energy world. Was it really a Polar Vortex? Or, was this just a good old-fashioned Minnesota winter? Either way, Mother Nature has a way of keeping people in check. We had temperatures this winter that we haven’t had to deal with for quite some time. People, animals, and equipment were all put to the test. Due to the cold, proper fuel blending was a major issue, as well as propane inventory management. If you had problems with either, we hope you called us. If you didn’t contact us, it’s not too late for us to discuss the issues you experienced and put together a plan to ensure it doesn’t happen again next year.

Calculating the right fuel blendLet’s start by reflecting on proper fuel blending. What fuel blend did you use over this past winter? What blend do you have in your tank right now? Did the blend work for you? If so, remember that for next year. If it didn’t, REMEMBER THAT FOR NEXT YEAR! When you calculate your blend, you can figure that every 10% of #1 drops your cloud point 3 degrees. Remember, #2 fuel has a cloud point of 14 degrees ambient temperature. Temperatures stated are on the “safe side”. See blend chart below:

Biodiesel blend returns to B20Moving forward, starting April 1st our diesel fuel moves from B5 (5% Biodiesel) to B20 (20% Biodiesel). If you have not topped o� your tanks prior to reading this article, please call us right away! Fuel inventory management is a big deal now. For the most part, our growers have enough storage on the farm to get through spring work. After spring work is done, the goal is to keep enough fuel on hand to get through summer and the month

of September. On October 1st fuel moves back to B5. Managing your inventory while transitioning from warm to cold weather will benefit you greatly. If at any time you would like to update your on-farm storage, or just add to it, let us know. We keep a nice assortment of new tanks available for purchase or lease.

Ensuring tank health with our MTCUAnother piece to the fuel puzzle is tank maintenance. We have covered this in almost every article over the past few years. What’s new to us is our Mobile Tank Cleaning Unit (MTCU). We purchased this piece of equipment last summer and have had some time to master the process. This unit uses the fuel in your tank to pressure wash the interior walls, removing most rust, debris, and contaminants from your tank. The MTCU also filters the fuel while washing. To get the best performance, we ask that there be less than a quarter tank of fuel. If there is too much fuel, the bottom does not get cleaned adequately. The cleaning process requires two guys to manipulate the tank and equipment. The pump and fill cap get taken o� the tank so the suction end and washing end of the machine can be tightened into place. We monitor the fuel going in and out of the tank. After we are satisfied with what we see, we switch sides with the washer and suction ends. After the cleaning process is complete, we put the tank back together and check it over. If anything needs attention, we will let you know. The cost for this service is listed below:

#2 #1 Cloud Point (Ambient Fuel Temp)

100% 0% 14 Degrees F

70% 30% 5 Degrees F

50% 50% -1 Degrees F

30% 70% -7 Degrees F

0% 100% -45 to -60 Degrees F

560 GAL $2501000 GAL $3002000 GAL $400

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LP heaters and appliances struggle during extreme coldAll in all, propane is one of the more “user-friendly” products in the energy world. As long as your system is in working order and there are no leaks, propane is very much hands free. It’s very rare to have an issue with the actual product. Ninety-nine percent of the time it’s a piece of equipment in the circuit that fails. Valves, regulators, switches, and thermo-couplers are usually at fault when a heater or furnace decides not to work properly. This winter was an exception. The propane product itself was not the issue, however the weather in relation to the propane was. Let’s do a quick overview on how propane works to help you better understand what happened this past winter.

The propane delivered to your home, barn, shop, etc. is in liquid form. In order for propane to remain liquid, it must be kept under pressure. Your tank is filled to between 80 and 85% capacity to allow for vapor space. Most furnaces, shop/barn heaters, and appliances burn propane vapor only. As the appliances draw vapor from the tank, the liquid boils to replace what has been drawn. This process continues until the liquid is gone and all vapor is drawn from the tank. This process is consistent through appliance operation. However, weather can and does have adverse e�ects on this process.

Propane has a boiling point of -44 degrees F. The warmer the temperature is, the faster propane will boil and create vapor. This is why we try to summer fill tanks to no more than 80%. We want to allow more space for the product to expand when temperatures reach 90 plus degrees. This also creates a lot of pressure in the tank and system. The appliance(s) can draw product much easier when there is high tank pressure. The exact opposite is true when temperatures are below zero. The closer to the boiling point, the less volatile the propane is. The temperatures that we saw in late January and early February reached in the neighborhood of -35 degrees. With the ambient temperature being so close to the propane boiling point, there was very little vaporization going on. When this happens, the pressure in your storage tank

is almost zero. With little to no vaporization and pressure, appliances struggle to draw the amount of gas needed to run e�iciently, causing poor heating performance. Thankfully conditions like these do not happen often. But when they do, we all need to prepare ourselves. If you are a scheduled delivery or call-in customer, check your tanks and prepare to place an order at least 4 days before the cold weather hits. For our scheduled delivery customers, home and commercial/ag, we try to get around and top everybody o�. There are products on the market to combat these issues, but be sure to research them. Tank blankets are expensive to buy and expensive to run. Are they actually worth it in Southern Minnesota? We believe it’s more cost e�ective to make sure your tank is as full as possible.

Another option for those with multiple appliances and/or buildings, is to make sure there is adequate tank space. Some sites with multiple buildings have 1 tank per building. If you move all the tanks to a central location and tie them together, then multiple buildings can pull o� of multiple tanks. If building 2 is drawing hard, and buildings 1 and 3 are not drawing at all, building 2 is drawing o� of 3 tanks. This is something to consider. It’s easier to maintain and easier to manage. We would be happy to talk to you about what can be done at your site!

A protection plan like no otherWe would like to remind everyone about the Cenex Total Protection Plan® (TPP) Warranty - the best warranty in the industry for agriculture. The program is very inexpensive with a one-time fee of less than $200 (with coupon) for new equipment and less than $300 (with coupon) for used equipment. How many warranty plans do you know of that have a ONE-TIME fee and NO DEDUCTIBLE?

When you use Cenex® lubricants and Ruby Fieldmaster® premium diesel fuel exclusively, you’ll get up to 10 years or 10,000 hours (8 years or 8,000 hours on used equipment) of engine and transmission coverage. The plan covers thousands of pieces of equipment and extends protection above and beyond the

Due to the cold, proper fuel blending was a major issue, as well as propane inventory management.

Energy article continued on page 15

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Transitioning Pigs After WeaningIt is no surprise that the transition period after weaning is the most challenging time in hog production. The impact on those first seven days sets the stage for the next 23 weeks of grow/finish performance.

According to research conducted at Kansas State University, pigs that barely maintain their weaning weight during the first week may take an extra 10 to 20 days to reach market weight, compared to pigs that grow at their pre-weaning gain rates during the same period. In today’s hog market, those are extra days that producers simply cannot a�ord to give up. Going back to the basics and focusing on those first seven days can help keep money in your pocket. Anitra Balchan, M.S., Form-A-Feed Nutrition and Production Specialist, o�ers these tips for getting those weaned pigs up and running:

Biosecurity – Having an appropriate on-farm specific disease prevention program combined with appropriate sta� training will make all the di�erence in maintaining and protecting the health of newly weaned pigs.

Reminding them to eat – Before weaning, sows nurse their litters at frequent, consistent intervals. Once these litters are weaned they now need to determine how much and when to eat. This may sound simple, but newly weaned pigs need to be trained. Walking pens on a consistent basis, meaning 4-6 times a day, gets them up and moving which provides them with a gentle reminder they need to eat.

Water – It is a nutrient that tends to take a back seat. Water, however, drives feed intake. It is essential for all functions of the body including absorption of nutrients, temperature regulation, and growth. In fact, 80% of the body of the newborn pig consists of water. Be sure that each pig has su�icient access to water, and provide more than one drinker per pen. Bowl drinkers should be set at 40% of shoulder height. Pigs should be able to walk underneath nipple drinkers easily, ensuring they can have access to water. Water pressure should be verified and between 15-20 PSI. Wet-dry feeders also require a separate source of clean drinking water.

Diet Digestibility – Improving digestibility of a diet will improve feed intake. Having a diet fortified with milk proteins, cooked cereals and simple sugars benefits performance and health.

Accurate Budget – High quality starter diets improve feed intake, health and performance. However, these advantages can be lost if they are fed at the wrong amount for each weight class or if they are fed for too long. Knowing average weaning weights can help budget more appropriately.

Gruel Feeding – Gruel feeding gives piglets in the general population a few days to settle into their new environment and the opportunity to figure out feeders and waterers without sacrificing those first few critical days of nutrition. It also gives extra nutritional support to those fall-behind pigs or those in the sick pen. Mix three-parts water to one-part feed to a watery oatmeal-like consistency and provide fresh gruel for a minimum of four times per day. Only mix as much as what pigs will eat in 30 minutes and all pigs should be able to eat at one time. Gruel feed for the first 3-5 days when entering the nursery, using less water each day and by day 5-7 they should be on dry feed.

Mat Feeding – Mat feeding is similar in concept to ringing the dinner bell. Newly weaned pigs need to be trained to eat from feeders for the first few days. Spreading a small amount of feed on floor mats close to the feeders 2-3 times daily essentially is “ringing the dinner bell”. These small, frequent meals stimulate pigs to eat more, become accustomed to feeders and prevents wastage of any uneaten portions.

Speaking of BiosecurityFarmward takes biosecurity very seriously and we understand how important our role is in preventing the introduction of biological hazards from contaminating finished feeds. With that said, Farmward has a HACCP (Hazard Analysis and Critical Control Points) plan in place. HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical hazards from raw material production, procurement and handling, to

Jeff MikoschFeed Department Manager C: 320.894.8797jmikosch@farmward.net

Rod OswaldFeed SalesC: 507.469.8915roswald@farmward.net

15

original equipment manufacturers’ warranties.

For those of you that run Ruby FieldMaster® but do not want to switch lubricants, there is a Fuel Only warranty option. For used equipment this will cover the fuel injection pump. For new equipment this will cover the fuel injection pump and injectors.

The LubeScan® portion of this program is available for anyone to use on any piece of equipment at any time. You can have the engine oil from your ag equipment, your car, motorcycle, lawnmower, semi-truck, or any other piece of equipment, analyzed just to make sure that it is staying healthy. Catching a catastrophic failure before it happens can save a lot of down time, which in turn saves a lot of money. Every penny counts! Contact Pat, Travis, or Curty today to ask about these programs!

Russ Hacker retiresAfter 24 years of service, Russ Hacker retired on December 31, 2018. Russ handled a lot of our day-to-day operations in the energy division. He took care of the Cardtrol in Morgan, as well as any lubricant deliveries or service calls on fuel tanks and pumps. He also pumped a majority of the LP rail cars in Springfield throughout the year. In addition, he was our backup delivery driver for LP and Fuel. Russ was one of the first to arrive in the

morning, but rarely the first to leave. He will be greatly missed, but we are happy that he has the opportunity to enjoy his retirement. On that note, if you have his cell phone number, remember to only call him and ask how retirement is going!

With Russ’ retirement, Ron Mathews has taken over his responsibilities. Ron came to Farmward a little over a year ago and there is a good chance you have seen him delivering fuel and/or propane this fall and winter. When you see Ron out and about, make sure to introduce yourself and welcome him. He is not originally from the area, but seems to be figuring it out quickly. He has given permission to have his work cell number published. For any farm tank related service calls or any questions regarding the Cardtrol, you can contact Ron at 507-430-8793.

From all of us in the energy division at Farmward, we wish you the best for your 2019 season. Make sure you look over your equipment and give it a good shot of Cenex grease before entering the field. Slow is smooth, smooth is fast. Be safe and God Bless!

manufacturing, distribution and consumption of the finished product.

We evaluate the plan regularly to identify key hazards and, as with any kind of security plan, documentation and record keeping is essential. We also continually train our employees on biosecurity and protocol in order to minimize risk of contamination and we make sure that our trucks, facilities and other equipment are cleaned on a regular basis.

Grueling Winter We want you to know that we will do everything in our power to prevent entry of contaminated ingredients to maintain a sanitary environment in our feed mill.

As we head into spring and put this winter behind us, we want to thank you for your understanding and patience with getting your feed delivered over this grueling Minnesota winter. As you know, Mother Nature was not very cooperative and our sta� put in some long days and weekends in making sure feed got delivered and your livestock got fed.

Thank you, as well, for making sure snow got removed from your yards and around your buildings to help the process. Hopefully, this spring will be a more “normal” season.

As always, thank you for your trust in the Farmward Feed Division.

Energy article continued from pages 12-13

Mother Nature was not very cooperative and our staff put in some long days and weekends in making sure feed got delivered and your livestock got fed.

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Crop Insurance Deadline NearingMarch 15th is the deadline to purchase your crop insurance for the 2019 crop year. During this brief period, you will need to update any entity changes − going from individual to a Corporation, LLC or Partnership, etc. Some of the things to go over as you finalize your crop insurance decisions for the 2019 crop year include verifying shareholders of entities, level, plans of insurance and adding land in new counties. With profit margins for crop production this year being very tight, your insurance decisions are critical.

ARC / PLC changesProducers may make a new election to obtain either ARC or PLC for the 2019 crop year. That election also applies for the 2020 crop year. Producers may now change elections annually during the 2021 through 2023 crop years and owners can update the farms PLC payment yield beginning with the 2020 crop year. ARC payments are based on physical location of the farm. A yield plug of 80% is to be used under ARC to increase yield history, but not in excess of increased yields under trend-adjusted yield for crop insurance.

Multi-County Enterprise Unit (MCEU)The U.S. Department of Agriculture’s Risk Management Agency (RMA) is o�ering the new endorsement known as the Multi-County Enterprise Unit for farmers interested in covering two counties in the same state under their crop insurance policy. To qualify for the endorsement, one county must qualify independently for an enterprise unit and the other county must NOT qualify for an enterprise unit. Both county crop policies in the Multi-County Enterprise Unit must be with the same Approved Insurance Provider and have the same elections for Multi-County Enterprise Units, insurance plan, coverage level, and enterprise unit by practice. The 2019 availability includes (when on AD): Small Grains, Coarse Grains, Cotton, Canola.

MCEU is elected at the sales closing date on the application in each county, but that does not automatically make the county eligible. It must still meet criteria for forming a MCEU at ARD (Acreage reporting date). A producer

can have one MCEU for irrigated practices and a di�erent MCEU for non-irrigated practices. Both policies must be insured with the same AIP.

As an insured producer, you will elect the MCEU endorsement at sales closing date and counties are not designated into an MCEU with a primary and secondary county until the ARD.

Sugar beet changesThe changes to the sugar beets policy updates the policy provisions and definitions to better reflect current agricultural practices for sugar beets. They also help simplify the policy for both producers and crop insurance providers, better aligning it with what is used across the industry and clarifying options available. There are some big changes with the sugar beets, including the removal of Stage Guarantees. Current Language:

1) Sugar Beet Crop Provisionsi) 1st Stage Guarantee: 60% of final stage production guaranteeii) Final Stage Guarantee: 100% of the final stage production guarantee

2) Stage Removal Endorsement Optioni) Removes stages: 100% of the production guarantee regardless of stage

New Language:1) Sugar Beet Crop Provisions

i) Stage Guarantee language removedii) 100% of the production guarantee regardless of stage

2) Stage Removal Endorsement Optioni) Incorporated into base policy

Other sugar beet changes• Converting the APH from tons to pounds

of raw sugar, the 2019 databases have updated with 2018 production.

• Early harvest factor changes have also been updated and replant payments have increased to $110/acre.

Kathy Mainer Crop Insurance SpecialistC: 319.290.4258 kmainer@agquest.net

Sheri Bakker Crop Insurance SpecialistC: 320.212.9226sbakker@agquest.net

Lynn Button V.P. AgQuest InsuranceC: 952.240.1845lbutton@agquest.net

AgQuest Insurance Agency is an Equal

Opportunity Provider. Continued to page 19

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Understanding Your Risks in Operating a Drone

AFIS Certified Is More Than Just A Title

Tim LewisMN River/AgQuest

Insurance Property & Casualty Insurance Specialist

C: 612.756.2903tlewis@agquest.net

Amber WeberAgQuest Insurance – Olivia

Property & Casualty Insurance Specialist

C: 320.894.0663aweber@agquest.net

Tom Rekstein MN River/AgQuest

InsuranceProperty & Casualty Insurance Specialist

C: 507.327.8755trekstein@agquest.net

AgQuest/MN River Insurance agent Tim Lewis attended the IRMI Emmett J Vaughan Agribusiness Conference in Des Moines, Iowa last fall. The IRMI conference helps our agents gain a deeper understanding of topics that are impactful in the farming industry so they can bring that knowledge back to our customers. It is also one of the ways that Tim and Amber Weber keep up their AFIS designation (see article below).

One of the many sessions that Tim attended at the conference addressed the use of drone technology in farming operations and how risks concerning cyber security and liability can be managed and insured. According to a survey last April, which polled 269 U.S. farmers, three out of four farmers are currently using or considering adopting drone technology on their farm. Drones o�er farmers a cost-e�ective and e�icient way to monitor and manage crops, livestock and soil conditions. However, there are risks involved with their use, including privacy issues, cyber security with data that is captured and transferred

and the potential for damaging property or causing bodily injury. With that said, do you know if your insurance policy covers these risks? Even though you may not be operating the drone for commercial use on your farm, traditional insurance policies may not o�er the protection you need if an event does occur.

It’s important that you contact your insurance agent immediately when purchasing a drone to ensure that your policy protects you against possible claims as a result of its usage. AgQuest/MN River Insurance agents, Tim Lewis, Amber Weber and Tom Rekstein can help you sort through your current insurance coverage and ensure you are protected from the risks associated with operating your drone. You don’t want to go unprotected; contact Tim Lewis at our Le Sueur o�ice: 507-593-0128, Amber Weber at our Olivia o�ice: 320-523-5824 or Tom Rekstein at our Mankato o�ice: 507-345-8602. They have the knowledge and experience to get you covered.

Source: https://unmanned-aerial.com

In a world where having an acronym behind your name has gotten more and more common, why should the classification of AFIS be important when searching out your insurance needs? As an Agribusiness and Farm Insurance Specialist (AFIS®), AgQuest/MN River agents, Tim Lewis and Amber Weber, have specialized expertise in agribusiness and farm insurance and risk management. They understand the most important insurance needs of agribusinesses and farms and you can be assured you are dealing with someone who is committed to the agribusiness industry. AFIS is the only designation of its kind o�ered in the insurance industry that focuses on agribusiness. This designation is an intense and rigorous process of learning, and understanding policy impact in the agricultural industry, with the ultimate goal of passing the benefits of our knowledge on to the farmer.

Of the 37,100 licensed insurance agents in Minnesota, only 22 hold this title, with Tim and Amber being two of them. To obtain the AFIS certification, Tim and Amber had to complete five specialized courses on agribusiness and farm risks and insurance. They did this through IRMI (International Risk Management Institute, Inc.), the leader in risk management and insurance research and education for more than 30 years. To maintain this status, they are also required to complete annual training which allows them to stay up to date on changes within the farming industry.Tim received his AFIS certification in 2007 and Amber received hers in 2013. As an advocate for farmers, Tim and Amber are farming professionals. Their knowledge, background and passion in this industry is not only a valuable asset to AgQuest, but most importantly, to our customers.

AgQuest Insurance Agency is an Equal

Opportunity Provider.

18

David LuepkeBusiness Relationship MgrC: 507.430.6831 dluepke@agquest.net

David LinkBusiness Relationship MgrC: 507.430.4330dlink@agquest.net

The Importance of Having Good Financial InformationIn the current ag environment managing your farm properly is imperative. Being a good farm manager starts with knowing your cost of production, breakevens and cash flow. Most of this can all be easily analyzed with good record keeping.

Managing your risk is also important and starts by putting a good grain marketing plan in place. Like we’ve said many times before, the Grain Marketing Advisors at Farmward have an assortment of grain marketing strategies and tools that fit the needs of your operation and can help in managing your risk. We encourage you to take advantage of their insight and expertise.

No matter what size your operation is, good record keeping and having accurate year-end financial statements are not only helpful for checking o� your lender’s list, they also serve as good management tools in making well thought-out business decisions and can help you:

• measure year-over-year trends and changes in net worth.• better measure your accrual-adjusted income. Accrual adjustments help match

up changes in inventories, receivables and payables rather than only the cash and depreciation a tax return shows.

• succession plan. This process often takes several years. By having good financial information for both the retiring generation and succeeding generation, planning can go smooth. The retiring generation’s need for income must be balanced with the ability of the new farmer’s financial abilities. This can also be helpful for planning with other family members.

• tax plan. A balance sheet can indicate future tax liabilities. For instance, deferring grain proceeds and having a high level of prepaids before year-end often results in high tax consequences as a farmer transitions to retirement or cuts back. It’s also helpful to measure tax liabilities during a growing operation.

• structure your debt. A healthy operation finds balance between long, intermediate, and short term debt. Everyone’s circumstances are di�erent. Adequate working capital and a positive cash flow are two items to aim for.

• analyze each commodity or enterprise.• determine spending trends for both business and personal expenses.• evaluate how the year went compared to projections.

We hope these points are helpful as you continue to prepare for the 2019 crop year and if you need assistance in analyzing your numbers and/or assessing your financing needs, let us know.

As a reminder, our 2019 Farmward finance programs have been established and are ready for you to take advantage of. Please visit with the AgQuest Business Relationship Managers, David Link and David Luepke or your Farmward Account Manager, for details on our Companion® secured and Direct loan programs.

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Other crop insurance updates• Allowing crops that can be grazed and mechanically harvested to be insured under

policies for each use• Increased CAT policy fee from $300 to $600• Require continuing education for agents and loss adjustors• Require R&D on Whole Farm Revenue Policies to improve e�ectiveness

The Prevented Planting Coverage level has also changed from 10% to 5% on elected crop for 2019. See the chart below.

We encourage you to call an AgQuest Crop Insurance Specialist to talk through all the changes to make sure you have the right coverage for your operation. We understand that with current margins, it may seem like an easy solution to reduce costs by cutting your crop insurance. However, it’s important that you weigh the risks of not having coverage if a major weather event happens. Crop insurance is an excellent risk management tool; as some of you probably experienced first hand in the 2018 crop year.

AgQuest Insurance Agency is an Equal Opportunity Provider

Continued from page 16

ASK for details

Prevented Planting Coverage Factors 2018 2019

Corn 60% 55%Soybeans 60% 60%Wheat 60% 60%Dry Beans 60% 50%Processing Sweet Corn 40% 60%Green Peas 40% 40%Sugar Beets 45% 45%

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DIRECTORYClements32959 235th StreetWabasso, MN 56293Phone: (507) 723-7367 Comfrey101 Pine StreetComfrey, MN 56019Phone: (507) 877-2441 Danube708 Hwy 212 East, PO Box 98Danube, MN 56230Phone: (320) 826-2214 Morgan711 Front Street, PO Box 278Morgan, MN 56266Phone: (507) 249-3196

Morton320 W 1st StreetMorton, MN 56270Phone: (507) 697-6113 Olivia706 E LincolnOlivia, MN 56277Phone: (320) 523-1811 Renville340 Dupont Avenue NE, PO Box 604Renville, MN 56284Phone: (320) 329-8377 Sacred Heart120 1st Avenue, PO Box 70Sacred Heart, MN 56285Phone: (320) 765-2726

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