Annual Report - CoBank

S T R A T E G I C R E L A T I O N S H I P S1 s t Fa r m C r e d i t Serv i c e s& CO LU S A E L E VATORCO M PA N YIn 1944, Dale Griffiths’ family bought a small feedand grain business in Colusa, Illinois, with a goalto serve local corn growers and other farmers.N orthwest Fa r mC r e d i t Serv i c e s& J O H N I . H A A SWater, hops, malt and yeast are the fouringredients used to make beer. Take one awayand — well, it’s just not beer.From that humble beginning, Colusa ElevatorCompany has experienced tremendous growth.Today it is a thriving enterprise, operatingin six locations in southeast Iowa and westcentral Illinois, including three barge terminalsalong the Mississippi River.Washington-based John I. Haas is one of theworld’s leading providers of hops, the floweringvine that gives beer its bite. It receives a rangeof strategic financial services from CoBankand Northwest Farm Credit Services, one ofCoBank’s affiliated Farm Credit associations.CoBank, via its strategic relationship with 1stFarm Credit Services in Normal, Illinois, helpsprovide family-owned Colusa with debt capital,including term debt and a revolving line ofcredit. Additionally, Colusa utilizes CoBank’snon-credit services, including cash managementand export letters of credit.Griffiths, Colusa’s president, says CoBankand its Farm Credit System partners playedan important role in helping the organizationweather the dramatic run-up in commodityprices in 2008. Though grain prices retreatedin 2009, Griffiths has confidence his financialpartners will be there in a market where pricevolatility is the new normal.“We’ve been through tough times, and CoBankwas top-notch throughout,” he said. “CoBankunderstands agriculture and isn’t going to pullback in hard times, which is different thansome of our previous banking relationships.”Mike Sherman, vice president for agribusinessat 1st Farm Credit Services, believes CoBank’sindustry knowledge played an important rolein meeting Colusa’s overall needs for strategicfinancial services. “It’s been extremelybeneficial for the customer to have thecombined capacity and expertise of CoBankand 1st Farm Credit Services,” he said.John I. Haas maintains about 1,800 acres ofhop farmland in Washington state, withprimary sales to market-leading brewers inNorth and South America, Australia andWestern Europe. CoBank participates withNWFCS and other Farm Credit System lenderson term loans and a revolving line of creditfor John I. Haas. CoBank also providessupport for foreign-exchange transactions.John I. Haas closed on a new loan package atthe height of the financial crisis. “We neededa credit facility to pay growers and capital toexpand our facilities,” said Alexander Barth,executive vice president. “Had we gone withanother bank, it all probably would haveunraveled because of the extreme problemsthat many banks got into. That would havebeen a disaster for us.”Jeff Fagg, NWFCS vice president of agribusiness,believes the relationship with John I. Haasdemonstrates the Farm Credit System’s valueproposition. “The customer appreciates thatthe Farm Credit System is focused on agricultureand, through our partnership with CoBank, isable to provide a comprehensive array offinancial services that meet their bankingneeds,” he said.S t r e n g t h a n d s ta b i l i t y 13