Customer Owners,
I hope this message finds you all doing well. As Spring approaches, we are all anxious to see things green up and are hoping for the late moisture some of you have received will bring up the wheat and grass.
In this message, I wanted to spend a bit more time talking about my salutation to begin this letter and the concept of a Customer Owner. As a part of the cooperative structure that is Farm Credit of Southern Colorado, each of you is an owner of our organization. That structure and all the benefits that come with it, are unique in the lending and financial services industry. We don’t often enough talk about some of those benefits of being a part of your cooperative.
- Governance-as owners you all play an important role in leading this organization. Your vote matters. You all elect the 10 shareholder directors that represent you on the Farm Credit of Southern Colorado Board. Those 10 and the 2 outside appointed directors on our board make up the governing body that sets our strategic direction. They are my advisors and ultimately my bosses as I am then charged with managing the day-to-day operations of our association. Your local community banks, and privately held lenders that sell you inputs don’t have this structure. You have no say in how those organizations are run or in how they spend the profits they earn from charging you interest. I remind you all of this structure as we head into the time for elections for our board of directors’ seats. I encourage you to be active members and to participate in our annual meeting and full election process each year!
- Return on your investment-There is no better model in lending for returning profits directly to the customers than the cooperative model that is Farm Credit. As borrowers you become owners. As owners, I mentioned that you have then a say in how we are governed. That governing body sets the tone and direction of our association. They also set the desired returns of capital to our customer-owners in the form of cash patronage. Farm Credit of Southern Colorado is currently distributing $8.5 million in cash patronage back to our owners for the 2021 year. That amount represents over 40% of our net income in 2021 being returned to you, our owners. In addition to this, we invest in local activities, organizations, and communities with significant donations and sponsorships each year. Most community banks and corporate lenders will target a return of 1% of net income to their communities. At Farm Credit of Southern Colorado, we are exceeding that amount each year in our support of local causes, organizations, etc. Then, on top of that, we are convinced that returning a significant portion of our earnings to our customer-owners is the best way to see dollars returned to rural America. If we can return a reasonable portion of our annual income to each of you, that allows for reinvestment in your community, your operation, and your livelihood.
Over the past 5 years, Farm Credit of Southern Colorado has returned more cash patronage to our customer-owners than in the previous 10 years before that. We have done so, by changing our credit delivery structure, working towards efficiency while also growing, and by delivering on excellent customer service each day. We are grateful to each of you for being a customer-owner and also a part of our success.
Sincerely,
Farm Credit of Southern Colorado CEO
Jeremy Anderson
This blog post is for informational purposes only and should not be considered financial, legal, or investment advice. Any information contained in this post is subject to change without notice and should not be relied upon without seeking the advice of a qualified professional. The views and opinions expressed in this post are those of the author and do not necessarily reflect the official policy or position of our Association. The author and Association are not responsible for any errors or omissions and are not liable for any losses or damages arising from the use of the information contained in this post.