2013 Annual Report
District Connected


We are truly one District Connected, partners in preserving and strengthening the rural communities we serve… for today and future generations.

Working Together to Strengthen Our Legacy


Letter from L. William York and Richard H. Davidson

We're pleased to report the AgriBank District enjoyed another extraordinary year in 2013.

Our success stems directly from effective collaboration across the 15-state AgriBank District. AgriBank continues to embrace an Association-centric business model, actively working with 17 affiliated Farm Credit Associations to help them provide the most competitive financial solutions to meet local market needs. The affiliated Associations, in turn, focus directly on helping their customers — farmers, ranchers, agribusinesses, rural homeowners and other eligible borrowers — succeed through evolving market conditions. We are truly one District Connected, partners in preserving and strengthening the rural communities we serve … for today and future generations.

Several key financial measures reflect our strong performance for 2013: While we're pleased with our 2013 performance, we recognize it reflects just a point in time. We've enjoyed a long stretch of favorable market conditions, yet our business is cyclical. We need to continuously position AgriBank and the District for challenges that lie ahead, foreseen or not. We devote considerable resources to anticipate volatility in agricultural and financial markets, to understand the ever-changing needs of customers, and to develop innovative solutions to help customers navigate what's around the corner.

One thing that's certain is continued uncertainty. However, producers and processors across the District are better prepared than ever to handle this challenge.

Changing Landscape


After several years of increasingly favorable market conditions for the AgriBank District, in 2013 we began to see signs of market correction. For example, prices for soybeans and especially corn — key commodities across the District — have moderated from recent highs. Given the strong financial position and the revenue insurance coverage of most crop producers heading into the 2013-2014 marketing year, we don't expect the projected lower crop prices to have an immediate negative impact on crop producer balance sheets. However, sustained lower crop prices could result in financial stress for some producers and an eventual decline in land values, which would negatively affect producer balance sheets.

One thing that's certain is continued uncertainty. However, producers and processors across the District are better prepared than ever to handle this challenge. For example, a large majority of crop producers have capitalized on recent profitable years to build strong financial and liquidity positions. Lower commodity prices generally will be positive for producers and processors who purchase these commodities as inputs in the production of beef cattle, dairy products, pork, poultry and ethanol. Furthermore, many farmers have invested in equipment that improves efficiency, which further contributes to their profitability and ability to ride out a downturn.

Just as customers have built stronger balance sheets and enhanced their risk management practices, AgriBank and affiliated Associations have taken similar steps to protect against risks. Associations in the AgriBank District — with strengthened capital positions and conservative lending practices over the past five years — are well-positioned for a potential drop in land values. For example, affiliated Associations generally limit lending to a certain percentage of the appraised value of farmland or, in some of the highest value areas of the District, set fixed dollar amount per acre limits on what they will lend. The result: Farmers who purchase land at higher values are making higher down payments or providing additional collateral.

We continue to develop a framework and programs for addressing risks to AgriBank, the District and even the Farm Credit System.

Risk Management


Anticipating and preparing for risks facing the District is a key obligation of AgriBank. We continue to develop a framework and programs for addressing risks to AgriBank, the District and even the Farm Credit System.

Following are some of the ways AgriBank is addressing key challenges and opportunities: AgriBank will continue to engage other System entities in developing initiatives that deliver continued reliable access to capital and funding, greater efficiencies to affiliated Associations, and long-term viability for the System. AgriBank executives hold key leadership roles in driving key strategic initiatives within the following System work groups: Credit Management, Data Repository, Diversity & Inclusion, Economic Capital, and Risk Management.

The main reason we support community programs is to fulfill our mission of supporting rural America — and because it's the right thing to do.

Community Involvement


While our main role is to work with affiliated Associations to provide a reliable source of credit to farmers and ranchers, we also take seriously our broader mission to support agriculture and rural communities across America's heartland. We contributed significant resources in 2013 to support rural causes and stepped up efforts to support nontraditional urban agriculture, as well. We also continued to support those in need in the communities where we live and work in and around St. Paul, Minn.

Our 2013 contributions included: We continue to partner with Farm Credit Services of Mandan and Farm Credit Services of North Dakota to operate the Rural Community Grant Fund, which supports projects in North Dakota communities affected by oil and mineral exploration and production. The program has awarded more than $1.1 million since its inception in 2012.

AgriBank joined the three other banks in the Farm Credit System to provide $250,000 to launch a nationwide “Homegrown By Heroes” program boosting the efforts of U.S. farmer veterans to market their agriculture products. The program allows farmers who served in the U.S. armed forces to add the Homegrown By Heroes logo to their products' packaging and signage. The label is an easy way for consumers to identify farmer veteran products and support the nation's military veterans by purchasing those products.

Many of these initiatives build goodwill for AgriBank and help build support outside our traditional constituents. However, the main reason we support community programs is to fulfill our mission of supporting rural America — and because it's the right thing to do.

We believe different perspectives generate more ideas that enable us to better achieve our goals.

Diversity and Inclusion


AgriBank is committed to fostering a diverse and inclusive environment. Our employees have diversity in age, ethnicity, gender, religion and sexual orientation. Some are rooted in rural backgrounds, while others are more familiar with city life. We believe different perspectives generate more ideas that enable us to better achieve our goals.

AgriBank not only embraces policies that foster diversity and inclusion, we walk the talk. Employees have the opportunity to participate in a Diversity & Inclusion Council, whose mission is to increase AgriBank performance by fostering an inclusive work culture that respects and uses the diverse perspectives, backgrounds and experiences of all AgriBank employees. In 2013, the council marked its 5th anniversary. We also actively recruit employees from diverse backgrounds and support a wide range of causes in our communities.

We're confident we'll succeed as one District Connected, as we're so much stronger when we work together to achieve common goals.

Looking Ahead


AgriBank remains committed to helping position affiliated Associations as the premier funding source for farmers and ranchers throughout the District. As one District Connected, AgriBank, affiliated Associations and customer-owners share many mutual interests and interdependencies. We are always creating and implementing new ways to strengthen our connections so we can seize the opportunities available through our collective efforts.

For 2014, we plan to focus on the following strategic priorities:
The AgriBank District plays an important role in U.S. agriculture, covering more than 40 percent of all U.S. farmland and more than half of U.S. cropland. The District accounts for about half the total value of all U.S. agricultural exports, meaning we also play a critical role feeding the world.

We take our responsibility very seriously to respect the legacy we inherited as well as to protect and enhance it for future generations. We're proud to partner with affiliated Associations and others to carry out our vital mission to provide reliable credit to borrowers through good times and challenging times. We're confident we'll succeed as one District Connected, as we're so much stronger when we work together to achieve common goals.


L. William York
CEO, AgriBank

Richard H. Davidson
Chair, AgriBank