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Episode 57: How Patronage (and Other Association Benefits) Support Farmers and Rural Communities

 “I can honestly say AgCredit’s been there every step of the way.” 

That’s how Dusty Sonnenberg feels about AgCredit’s impact on his farming operation. 

In a recent AgCredit Said It podcast episode, Sonnenberg, a borrower-owner and board member, shared that from the time of purchasing his first tractor to later financing farm ground, AgCredit has been, in his words, a sounding board to bounce ideas off of and share his vision with. 

Sonnenberg noted the expertise and wisdom his loan officers have provided along the way has been just as important as the financing aspect. 

“It’s not only having that financial piece to be able to do things,” said Sonnenberg. “It’s also been that sounding board of folks within the system who have been able to provide expertise and knowledge along the way.”

Joining Sonnenberg on this episode was Brian Ricker, president and CEO of AgCredit, who echoed these sentiments as just one of the ways AgCredit’s cooperative business structure makes it unique for its borrowers.

Ricker explained that it is currently a favorable time for the association, as AgCredit’s cooperative model allows them to distribute profits, otherwise known as patronage, back to borrower-owners. This year, $22 million was returned to its borrower-owners through its patronage program. 

Looking at patronage from a borrower-owner perspective, Sonnenberg explains that due to the increased costs of running a farming operation, patronage can be seen as a way to lower the cost of borrowing money or viewed as money coming back into your operation based on the association’s performance.

“Regardless of the number of acres you have, or the type of crops you grow, it just takes more money to do what we were doing a few years ago,” explained Sonnenberg. “In a sense, patronage is effectively lowering what you’re paying for. Simply put, it’s money back in your pocket.”

In addition to patronage, AgCredit prides itself on providing additional benefits to its members, such as its Emerge conference for young and beginning farmers, informational Outlook meetings covering economic and market topics, and its Mission Fund, which gives back to local rural communities in need. 

Reflecting on his own experiences as a beginning farmer, board member Scott Chalfin acknowledged that there weren’t as many opportunities for young people in agriculture earlier in his career as there are now. 

Commenting on the 2024 Emerge Conference held earlier this year, Chalfin noted, “It was great seeing a lot of the young members there. It’s just kind of a breath of fresh air because that is our future.” 

With education being a large part of AgCredit’s mission, Ricker and Sonnenberg both underscored the value of the conference’s presentations and speakers, but also highlighted the networking and collaboration aspect. 

“Ultimately, just getting everybody in a room and getting to know each other was very important,” said Ricker. 

AgCredit members also have the opportunity to attend Outlook meetings, which provide economic information, market analysis, and management insights to help borrowers make informed decisions and understand broader agriculture industry dynamics. 

Getting this information out is important, as Ricker reminds borrowers to “keep their knowledge up on what might be coming down the road, whether it’s from an economic standpoint or new things in the agricultural industry.” 

In addition to education, supporting local rural communities is another unique aspect of the association. Since 2018, AgCredit has awarded nearly half a million dollars in grants to nonprofits addressing various needs. 

Ricker shared that it’s been rewarding to see things change, happen, and even some dreams come true out of this fund. 

AgCredit’s commitment to its patronage program, educational initiatives, and its dedication to giving back to rural communities is a testament to its ongoing efforts to make a meaningful impact in the lives of its members and the communities it serves. 

Here’s a glance at this episode:

  • [01:31] Brian explains how the cooperative model allows AgCredit to distribute profits back to borrowers. 

  • [02:33] Dusty shares how patronage can be seen as a way to lower the cost of borrowing for a farming operation. 

  • [05:06] Brian and Dusty discuss AgCredit’s Emerge conference for young, beginning farmers, highlighting the networking and education aspects. 

  • [08:02] Brian and Dusty discuss AgCredit’s local Outlook meetings that provide various economic and market information to borrowers. 

  • [10:55] Brian highlights AgCredit’s Mission Fund, which gives back to local rural communities by providing grants to nonprofits. 

  • [13:06] As a member, Dusty shares how AgCredit has played an important role in his operation. 

  • [15:46] Board member Scott Chalfin introduces himself and his farming operation.

  • [16:15] Scott reveals how he ventured into growing Aronia berries. 

  • [18:40] Scott discusses his role as a board member and the value of attending meetings and conferences. 


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Voiceover (00:08):Welcome to AgCredit Said It. In each episode, our hosts sit down with experts from all parts of the agriculture industry to bring you insights and must-have information on all things from farming to finances and everything in between.


Phil Young (00:27):We are coming to you from Fostoria, Ohio, the home of AgCredit's headquarters, to bring you another episode of AgCredit Said It. This is Phil Young. Today we have Dusty Sonnenberg, AgCredit's board chairman, and Brian Ricker, president and CEO of the association, with us today. We are celebrating our 37th consecutive year of patronage back to our members and thought we'd have Dusty and Brian on to commemorate it. Welcome, Dusty. Welcome, Brian.


Dusty Sonnenberg (00:49):Thanks.


Brian Ricker (00:50):Hey, thanks, Phil. Great to be here.


Phil Young (00:52):Yup. We must really like you guys. Because I think this is number three or four... We're approaching five, I think, with you guys.


Dusty Sonnenberg (00:59):I brought my punch card. They're good.


Phil Young (01:00):Okay. We talked about that. Yup.


Dusty Sonnenberg (01:01):10th one's free.


Phil Young (01:02):We talked about getting Brian a jacket here soon. Well, good. Well, hey, welcome guys. In April, we celebrated another year of distributing patronage to our members. This is always my favorite time of year because I get to see the co-op model in action, so it's just exciting for me. Plus, I get to hand out money to people and see smiles on the faces of our members. But Brian, as CEO, what does this long-standing history of returning patronage mean for the association and its members?


Brian Ricker (01:31):Phil, you hit it right on the head there. It is a great time right now to be giving out money, giving out the patronage. I would love to be in your shoes right now doing that for the association you mentioned earlier, or cooperative and just our cooperative model that we work under, and it's kind of the fruits of the labor. It's our structure that we work under, and we are getting to that point of the year where our borrowers who own the cooperative - they use the cooperative - we are returning, we are distributing the profits back to them. The profits that we do not need for future capitalization of the cooperative, we are returning that. And obviously, that makes us unique in the form of many other types of structures of business.


Phil Young (02:23):Nice. And Dusty, in this higher interest and higher inflationary period, how can patronage have a positive impact on your operation?


Dusty Sonnenberg (02:33):That's a great question. I think everybody understands it takes money to run farming operations, and everything's high-stakes poker right now. The price of the game has just gone up. Regardless of the number of acres you have, or the type of crops you grow, it just takes more money to do what we were doing a few years ago. And so, as inflation has gone up, the cost of that money has also increased. So in some ways, you can look at patronage, maybe as the, what's the cost of money? And effectively, in a sense, maybe lowering that interest rate a little bit. While it's not something that we guarantee, here's your posted interest rate, take it down a certain amount.


(03:10):In a sense, it's effectively lowering what you're paying for that money that you're borrowing to run the operation. Simply put, some people may think, "Well, it's money back in your pocket." In a sense, it's very much that as well for doing business with the association that there is money that then comes back based on how well the association does and all the factors that go into that. So I think it can be viewed both ways. One is the total cost of your operation, what's the cost of the money it takes to borrow, and then what you get back at the end of the day.


Phil Young (03:40):Yeah. One of the surprising things I think I run into every year, and it's always somebody there. I get their patronage check to them, and they're always like, "So, this is my money?" They always feel like they have to put it back on their loan or put it back into AgCredit, but it is, it's their money, right? They can take and do with it what they want.


Dusty Sonnenberg (03:57):Absolutely, it is. And I think it's also important to realize in the cooperative model, it's sort of their money in the first place, the money that we're lending, we are a cooperative, we're working together. And so those proceeds, if you are, or the money that's saved or the money that's returned, is based on the business that's been done and how good a job that the employees of the association do with managing those resources.


Phil Young (04:19):And I know, as an employee in the Van Wert office, we love this time of year, we get people coming to the office, and we're able to hand checks out. And one of the special things our office does is we always buy a bunch of payday bars and 100 grand bars, and we hand those out to our borrowers too. So other offices around the association, I know, are doing similar things where we're celebrating and we're just excited that we're able to come together as a co-op and bring back and just share those profits with our borrowers. But patronage is obviously one benefit of our co-op, we have others, right? Member education is another big part of what we do here at AgCredit. Dustin and Brian, you guys spoke at AgCredit's Emerge conference that we hosted a few weeks back. Can you share more about that conference and how that impacts our young, beginning borrowers here at AgCredit?


Brian Ricker (05:06):Yeah, it was a great conference. Well attended. We had a lot of our young beginning farmers in attendance, and when I was talking and walking around and talking with some of those individuals, I realized how the collaboration, the stories that they were telling each other, their challenges, and just comparing notes and building that relationship with others that were having similar problems, similar issues, whether it was succession of the farm, you name it. They were collaborating and learning just amongst themselves. Obviously, we had a lot of good speakers and presentations, and so that was a great avenue to learn itself. But ultimately, I think it's just getting everybody in a room and getting to know each other, was very, very important as well. And a lot of education just happened from that.


Dusty Sonnenberg (06:05):Yeah, Brian's spot on. I think to be in that setting with that many young producers that just had that genuine excitement for what they were doing and the desire to improve what they're doing, to learn more. The networking first and foremost, I think that they had amongst each other was probably one of the key things that goes on at those conferences and that was definitely going on. Obviously, maybe exposure to different areas, different things they don't think of on a regular basis, or different ways of doing things. And then, just generally, the information and education that was shared. There were some great sessions there. Ones that I learned some just from sitting in, others I wasn't able to participate in, but really would've liked to, because I think the committee that put that on as far as our team members at AgCredit did a great job coming together, taking what they hear on a regular basis as far as what some of those needs are, and putting it into a package to deliver that back to the borrowers. It was just a great job all the way around.


Phil Young (07:01):Good. And for those of you guys listening that maybe didn't attend or were unaware it's going on next year, I think we're going to potentially look at doing the same thing. So it's called Emerge, and we did it in Perrysburg, Ohio, this year. Just a great opportunity for farm families. You can pull your wife in or your spouse in to come. Just a great way to get away for an evening, stay the night at a hotel on AgCredit, be able to learn, grow, and you do have to be a member of AgCredit to partake in this, but that's one way we want to pour into our borrowers.


(07:31):We want to make sure that they're educated, but also just it's kind of a good mental health day, right, too? A time away from the farm to be able to pour into yourself and just do better. But thank you, guys, for being a part of that. I know that we had a lot of attendees and we've heard some really great feedback. The other thing we also like to do is local Outlook meetings, which is another way AgCredit tries to provide continued education to our borrowers. Can you guys share what Outlooks are and what you've seen in the past as far as how that helps our borrowers?


Brian Ricker (08:02):Yeah, sure. The education piece is critical to our mission here at AgCredit, and just getting information out about what we see potentially happening down the road is very important. So whether it's a webinar, kind of an easy way to hear a good speaker, an economist, or a weather person, weather expert, whatever the case might be, we just see a lot of value, of course, in sharing that. And by putting all those resources together, we can put those on and get that information out. I particularly, I guess that the background of it, the economic piece for me has always been interesting. And just to better understand, even though I'm in it every day with interest rates and all that, it's very important to keep your skills up, keep that knowledge up on what might be coming down the road, whether it's from an economic standpoint or new things happening in the agricultural industry, and just staying in tune with that. So I personally get value out of that, and I know our members do as well.


Dusty Sonnenberg (09:13):Yeah, I think those are very impactful. Like as Brian said, it's the information. It's about management and making management decisions. And as a manager of our individual farms and operations, the more information we can have, hopefully, the better, more effective decisions we can make. And it's sort of not just the small decisions, but it's the big picture stuff. It's not just who's my customer, but who's my customer's customer? And in those outlook aspects, what are some of those outside factors impacting my customer that I may not realize, but maybe that will lead me to do some things a little differently that makes my product more desirable to my customer, that then helps them with their customer. So I think there's a lot of, not only small-picture things as far as the individual market analysis and how do I market my product, but also the big picture macroeconomic-type things that come into play. It's very useful from a producer standpoint.


Phil Young (10:05):And Brian, I know a few years ago when you put out a video for the entire association, really from the employee perspective, I think you shared, "Hey, guys, we want to get 1% better every day, do 1% more or do 1% better." I think it's things like Outlook meetings, it's the Emerge conference. It's sitting down with local experts, whether that's your lender or your crop insurance agent, whoever it is, and just learning as much as you can to become 1% better. I vividly remember, I think you said that at one point, and that kind of stuck with me, so…


Brian Ricker (10:35):Yeah, I used the term incremental gains.


Phil Young (10:37):Incremental. Yup. There it is.


Brian Ricker (10:39):Yup, it's important.


Phil Young (10:40):Yup. Well, good. So yeah, it's not just about educating our members, but supporting the communities they live in. And AgCredit's Mission Fund is one way we support our local communities. Brian, can you share a little bit about AgCredit's Mission Fund?


Brian Ricker (10:55):Yeah, I think it was 2018 when we first initiated our Mission Fund, and we knew it was important. The board knew that it's important to give back, whether it's our local area, our rural community. They realized that's part of our mission, part of what we need to do. We saw the need out there. And so, that was the first year. And so, there was an application process, and a lot of nonprofits and so forth were the ones who submitted applications. And since 2018, it's been five years now, and I think we've given out almost a half million dollars in grants, is what it ends up being. $15,000 would be the highest of the grant, the highest amount that we would give.


(11:47):And so, fire departments, just any need that might be out there, you can explain it on the application, and then we have a committee that sorts through that. But it's been just very rewarding to do that and be a part of that and just see things change, see things happen, see some dreams kind of come true out there too. And so, it can be education-related, it can be technology, it can be safety, all sorts of different areas. There are just so many needs out there, and we're looking forward to future years, and we continue to get more and more applications every year. It's growing and just kind of giving out the patronage. It's a rewarding time as well to be doing that.


Phil Young (12:41):And I've been lucky enough to be able to hand out those checks on the back end. And it is fun. It's super rewarding. And in some cases, it may not fund their whole project, but it's going to help out, get them towards their goal, if anything, so…


Brian Ricker (12:54):That's right. Yup.


Phil Young (12:55):Dusty, as a member, as well as on the board, what impact has AgCredit had on your operation besides providing you financing? I'm curious from a membership perspective.


Dusty Sonnenberg (13:06):Sure. Well, I think I can honestly say AgCredit's been there every step of the way. And first off, in the financing, that's the big part, from the first operating line to put a couple of animals in the barn and an operating line to get the inputs. When I was running ground, when I bought my first tractor, onto bigger lines for putting up buildings and buying farm ground. Every step of the way it's been there from a financing standpoint. But probably just as important as that has been the opportunity to work with my loan officer as a sounding board, and to bounce ideas off, and share what the vision is.


(13:40):And have somebody that is an interested party but doesn't necessarily have the interest that they're biased in one way or the other to provide just good, sound advice, sound wisdom, experience with other situations that they can share to help make some of those decisions along the way. So I think as much as it has been, obviously having that financial piece to be able to do the things, it's also been that analysis or sounding board that folks within the system have been able to provide some of the expertise, if you will, and knowledge along the way.


Phil Young (14:14):Nice. Well, good. Well, good. Well, guys, I want to say thank you from my perspective as an employee, and I'm also a member here, so I appreciate your guys' leadership, leadership as CEO and president, leadership as chairman on the board. It's decisions you guys make, it's conversations you guys have at this level that kind of helps protect patronage, right? It's the strategy you guys come to work to every day to try to make sure that passion is protected and that we are able to disperse those patronage funds to borrowers. So thank you, guys, for that, and appreciate you guys being on with us today.


Brian Ricker (14:48):Thanks, Phil. Thanks for your service to AgCredit and for helping out all of our customers as well. Thanks.


Dusty Sonnenberg (14:54):Yup. Keep up the good work. We enjoy the podcast.


Phil Young (14:56):Thank you, Dusty. Thank you, Brian. It's always a great time to have you guys when you guys stop by. Remember to check out our previous episodes of AgCredit Said It. May and June will kick off some great education episodes with topics like REAP grants, renewable energy policy, and economic outlook, grain marketing plans, and crop insurance, all great topics while you're sitting in the planting tractor. See you then.


Matt Adams (15:16):Well, hey guys, we are here at the 2024 Emerge Conference for AgCredit. And we're talking to a lot of different individuals coming through here today, getting a take on what everybody's expecting from our conference and just what's going on out there in the ag sector. So Phil, you want to get us started?


Phil Young (15:34):Yeah, sure. We're here... We actually grabbed one of our board members here, Scott, and so I wanted to hang out with him for a little bit, ask him some questions, and see what he is looking forward to at the conference. So, Scott, can you introduce yourself and kind of tell us about your cooperation?


Scott Chalfin (15:46):Sure. My name's Scott Chalfin. I came on the board here a couple of years ago, representing Sandusky County and Ottawa County, and part of Lucas County. I raise corn, soybeans, and wheat, about 1,200, 1,300 acres. My wife's Elaine, and we have two sons and five grandkids. So that's been quite a joy and sometimes quite an adventure, also.


Phil Young (16:14):Oh, yeah.


Matt Adams (16:14):Yeah, I bet. Yeah.


Scott Chalfin (16:15):We also have an acre of Aronia berries, which is kind of a very healthy, high-antioxidant berry that we're trying to promote. I just kind of ventured into that just a few years ago. So it's a slow process, but kind of fun to do.


Phil Young (16:31):How'd you get started in that? How'd that come about?


Scott Chalfin (16:33):Well, we wanted to raise blueberries, but our soil type and our soil pH doesn't allow that to happen. So my wife came across those looking on the internet, and it's just something we decided to do some research on and decided to go ahead and pursue that little business. It's a small business. It doesn't do a whole lot, but yeah.


Phil Young (16:57):Nice. So I am just actually, genuinely curious about this. What's the market for that? What do you guys do with them? 


Scott Chalfin (17:05):Very small.


Phil Young (17:05):Very small. Okay. Yeah.


Scott Chalfin (17:07):Extremely small. So we started with an acre, about a thousand plants, and we started having a few customers. We were going to a lot of farmer's markets. Did that for the first couple of years, and we still attend about three or four farmer's markets a year, and it's one of the super berries, so to speak. And the selling point to those is the health benefits, but they're also a berry, like a cranberry. That's really a tough berry to eat raw. So you need to find ways to incorporate into your diet. We have found those kind of ways, and we try to... When we're promoting them to people, we try to let them know that this is how we use them. We give them recipe sheets and everything else.


Phil Young (17:53):Oh, nice. Okay.


Scott Chalfin (17:53):So, got a few return customers. But it's just like anything else. It's just a tough thing to get off the ground.


Matt Adams (18:01):And for our listeners out there that may not be members or don't know everything about AgCredit, and the farm credit system, Scott is one of our board of directors, so our entire association, we nominate and vote in directors as part of our cooperative that oversee everything, and help govern everything and help our management team make the best decisions for our association. So it's a very unique... I'm going to say, a very unique part to be in with our association.


Phil Young (18:31):Yeah. How's the experience been going from just a borrower to now, a borrower/director? Yeah, what's that like?


Scott Chalfin (18:40):I found out that there is a lot to learn, and I know a lot about finances being involved in the cooperative system because I worked with a cooperative for a lot of years, and agriculture, also being in business, you realize that there's a lot more to just going out and borrowing money. You can't just walk in and say, "Hey, I want some money." So there's a lot of things involved and seeing the inside of a business and just trying to work at keeping that business profitable as well as keeping your customer base profitable too.


Matt Adams (19:15):Oh, yes, sir.


Scott Chalfin (19:16):It's a big challenge, and that's the most important thing, is keeping your customers and your members profitable. If you don't do that, the cooperative system doesn't survive.


Matt Adams (19:25):And with our Emerge conference here, I kind of like to get the board's take on it. I mean, we really designed this around our beginning, younger members. I always look at it, as the future of our association. So I guess what's kind of the board's thought on what we're doing here with Emerge?


Scott Chalfin (19:44):I think we're all on board with it. This is the second year for it.


Matt Adams (19:46):This is our second year.


Scott Chalfin (19:47):Yes. I was down in Findlay last year at the Emerge conference the first night like this right here. I thought that was a wonderful program. It was great seeing a lot of the young borrowers or young members there. It's just kind of a breath of fresh air because that is our future. I mean, you look at all these farm operations out here and you wonder what does the future hold for a lot of them, and that's always a big concern in our industry. We know what the average age is. So yeah, I think it's a great program. The board in general is very supportive of it. We always talk about this usually at every meeting. It is part of what we talk about. It's part of the program, part of the agenda. So I think it's something that we just definitely need to always keep at the forefront of our business, and our mission, and everything else.


Phil Young (20:39):I'm always encouraged. It's exciting to see a group of young individuals hungry to learn more that they don't feel like they know it all already. They're like, "Hey, I've been doing this, but I also know that I have room for learning and I have room for growth." And so, that's why they come here is obviously to network, learn from each other, learn from experts, connect with us, learn more about just best practices, how to just basically take their operation to the next level. And so, that's what I... I just love that. I just love that they still have that drive and hunger to learn more.


Matt Adams (21:10):Yeah. Also, like you said, learn from each other and also learn from everybody else who's been in the business for quite a while, because we always learn from our mistakes, and sometimes somebody can learn from somebody else's mistakes too.


Phil Young (21:21):But we just go back to that networking part where you hope that you really can make some connections here that really last your career and bounce ideas, off of guys, because ag is, we're a very competitive industry, but we're also a very close, tight-knit industry. It's kind of the neighbor aspect where you're always looking out for one another in our industry.


Matt Adams (21:48):Scott, are there things that you did as maybe someone who was when you were in your 20s, your 30s, thinking way back maybe that you did? Did you go to conferences like this? What stuff did you do maybe to kind of seek and get educated?


Scott Chalfin (22:02):Yeah, probably don't want to know some of the things.


Matt Adams (22:07):No.


Scott Chalfin (22:07):I started out right out of college and went to college, went to Ohio State, and then started out in the ag... Well, the livestock feed industry. And I was in that industry for years and really worked in the cooperative system my whole life. So the meetings I attended were just meetings that the system or those organizations put on. I was in sales, so I was able to put on a lot of different programs in terms of, but going to things like the Louisville Farm Show and Farm Science Review. I mean, things like that I always did back then too. I mean, that's about the extent of it. There was really... I don't remember anything really like this that a lot of companies did, rather that's a fact of that there just wasn't a whole lot of younger people in agriculture back then. I don't know, but…


Phil Young (22:59):Yeah, it's always interesting to see how we keep evolving and changing, and you look at, with everything with social media now, how hard it is to get people, let's say, face-to-face together, not something virtual. It's a networking environment where everybody's coming together as a group. So I think that's one thing that it's hard to do nowadays.


Matt Adams (23:24):And it's one of those things where, obviously, we're all trying to be mindful of our dollars, and so this is why we do it. We do it for free. We want people to come, and so we're just asking people. Also, time is a huge commodity people don't have enough of, and so we're just happy people are investing the time here to do this.


Scott Chalfin (23:41):And talking about the younger person in agriculture or any business for that fact. That's a topic of discussion on our board as well as the Farm Bureau board, I was on is trying to find younger people to be involved. And everybody's got such busy lives anymore. They've got usually two or three kids, and it just requires so much time. Not that it never did, but it seemed like years ago we just... There weren't as many things, many strings pulling at you, right?


Matt Adams (24:12):Oh, yeah.


Scott Chalfin (24:12):Like there is today, and today is probably... I mean, really, it's just a little tougher raising families today than what it used to be, I think. So that makes a difference.


Matt Adams (24:22):Oh, yeah.


Phil Young (24:22):It's just always a lot going on.


Phil Young (24:25):Well, good. Wait. Well, thanks for joining us, Scott. We're excited you're here. We're glad that you're back for year number two, hanging out with us at Emerge, so…


Scott Chalfin (24:32):Yeah. Well, thanks for having me. Appreciate it.


Phil Young (24:34):Yeah, no problem. All right.


Scott Chalfin (24:34):Thank you.


Voiceover (24:39):Thank you for listening to AgCredit Said It. Be sure to subscribe so you never miss an episode. While you are there, leave us a review to help others find the show. Let's talk ag in between episodes. Follow us on Facebook, Twitter, and Instagram @AgCredit. For more tips and resources, visit