Second Quarter Report
Issued By Farm Credit Banks
In the midst of signs of improve
ment in the mid-Atlantic region’s
agricultural economy the area’s
largest farm lender, the Farm Cre
dit Banks of Baltimore, reported
2nd quarter net earnings of $4.3
million.
Bank officials said more stable
land values, improving commodi
ty prices and lower interest rates
are beginning to move agriculture
in the region into the early stages
of marginal economic recovery.
The single most influencing factor
to the Banks’ profitability was the
fact that the Baltimore Banks have
not had to provide financial assis
tance during the reporting period
to other Farm Credit Banks in the
mid-West. During 1986 the Balti
more Banks and Associations con
tributed nearly $9O million in loss
sharing assistance to other District
Banks.
Earnings for the Baltimore Dis
trict, including the Federal Land
Bank of Baltimore, (FLB), and its
affiliated Federal Land Bank
Associations, (FLBAs), the Feder
al Intermediate Credit Bank of
Baltimore, (FICB), and its affil
iated Production Credit Associa
tions, (PCAs), and the Baltimore
Bank for Cooperatives, were
markedly up from the same quarter
last year. The combined 2nd quar
ter net earnings of $4.3 million this
year compared very favorably to
an operating loss of $16.4 million
for the same period last year.
Versatile Tractor Production Resumed
WINNIPEG, Manitoba The
end of a year-long production shut
down was officially observed here
today as the first Versatile tractor
built under the Ford New Holland
flag rolled off the assembly line.
The Winnipeg-based Versatile
Farm Equipment Company halted
production in July 1986. The Ver
satile Corporation agreed in Febru
ary 1987 to sell the farm equip
ment business to affiliates of Ford
New Holland, Inc., a subsidiary of
Ford Motor Company. Final pap
ers .were signed completing the
purchase in mid-July.
Robert F. Moglia, president of
Ford New Holland, said he has
been impressed with Versatile’s
accomplishments since their crea
tion in the mid-1950’5. “Versatile
impresses me because they are
creative, innovative and have built
quality products which meet the
customers needs,” Moglia told a
gathering of employees just before
the first tractor was officially taken
off the assembly line. “Let me
make one point very clear. We are
not going to stand in the way of this
type of creativity and innovation.
We are going to encourage it!”
The Winnipeg operation is cap
able of producing large four-wheel
drive agricultural tractors, bi
directional tractors and two lines
of harvesting equipment. Future
production volumes will depend
on market conditions. All totaled,
450 hourly jobs will have been
reestablished by early August.
Ford New Holland said many of
its 2,600 North American dealers
will have the option of adding the
Versatile product line, generating
a substantial increase over the 330
dealers already handling Versatile
products. Many of the 2,300 Ford
New Holland dealers outside
North America will also have the
option carrying the Versatile line.
Moglia said the purchase will,
help Ford New Holland position"
itself to better meet the needs of an
The Farm Credit System
In his letter to the District stock
holders, Gene L. Swackhamer,
President of the Banks, com
mented, “We are looking to the
future more optimistically as the
nation’s depressed agricultural
economy begins to show signs of
leveling out and preparing for
some upturn.”
Bank officials expressed this
optimism despite near drought
conditions in some parts of their
service area. “Spotty rainfall is
causing concern in some areas and
while this may negatively impact
some farmers this year, we remain
optimistic for the long term out
look for improved profitability in
agriculture,” Swackhamer said.
Signs of improvement in the
region’s farm sector can be noted
in the Banks’ net loan charge-offs
which are down from last year.
Combined FLB/FLBA net loan
charge-offs totaled $205,000 for
the six months ending June 30,
1987, compared to $500,000 for
the same period last year. FICB/
PCA combined net loan charge-
agriculture which is becoming
increasingly cost conscious. “We
must and will provide superior
quality products at affordable
prices,” he said. “Providing
customer-defined quality at lower
than-competition costs is a priority
for us.”
The New Holland Division of
the Sperry Corporation was
acquired by Ford Motor Company
in 1986. Ford Tractor Operations
and New Holland were then conso
lidated to form Ford New Holland
Merger Creates The
strengths to the others with very
little overlap.
In their product lines, the most
striking example is hybrid com.
Stauffer’s excellent later maturity
com hybrids fill an admitted weak
ness in the Northrup King line-up.
In fact, Stauffer’s S 7759 is
expected to be the largest selling
hybrid for the newly merged com
pany. Likewise good early maturi
ty hybrids from Northrup King and
Pride fill a gap in Stauffer’s north
ern Com Belt line-up. The merged
brands represent one of the most
expansive hybrid com lines avail
able from any company. Hybrids
range from those adapted to the
long, hot summers of the deep
south to the cold springs and short
summers of northern Minnesota
and Canada. Hybrids of 70 to 142
days maturity arc available, as are,
specialty com hybrids like waxy
com. The new company has a
complete line of hybrids especially
bred for yield, standabihty,. fast dry
down, drought tolerance and other
traits to match almost every
adverse growing condition.
The complementary nature of
the companies’ product lines is
evident in other crops, 100. North
rup King has excellent early
maturity hybrid sorghums while
Stauffer’s strength is in the later
The New Northrop King was
recently formed by the merger of
Northrop King, Stauffer and Pride
seed brands. The merger makes
Northrop King Co., based in Min
neapolis, the second largest seed
company in the United States and
the third largest marketer of hybrid
seed com, according to George L.
Jones, president and chief execu
tive officer.
Northrup King Co. is a
# lO3-year-old seed company and a
leader in com, soybean, sorghum,
alfalfa, vegetable and home garden
seed marketing. Northrup King
had acquired the assets of the Pride
Seed Company in 1965, operating
Pride as a separate entity until
now. Then on March 6 of this year,
Northrup King purchased the
assets of Stauffer Seeds, a wholly
owned subsidiary of Stauffer
Chemical Company, for an undis
closed price. Stauffer brought to
Northrup King a strong line of
corn, sorghum and sunflower
hybrids along with significant
research capabilities.
The purchase of Stauffer Seeds
caused management to consider
merging all three brands into a new
company, Jones said. Northrop
King, Pride and Stauffer Seeds
made a ve*. good match, he
explained, each company adding
Farm
Credit
News
offs were $351,000 for the first six
months of this year, down from
$940,000 for the first two quarters
of last year.
Delinquency rates during the
2nd quarter 1987 also improved as
compared with the same period a
year ago.
FLB farm loan delinquencies
were 4% of the number of loans
outstanding (.25% of loan vol
ume), while PCA delinquencies
were 2.9% of the number of bor
rowers (1.7% of loan volume).
Delinquencies for the same period
last year were 4.5% of loans by
number and .59% of volume and
3.4% of Jhe number of borrowers
and 1.2% of loan volume for the
FLB and PCAs respectively.
The Farm Credit Banks of Balti
more provide agricultural credit
and financial services to over
52,000 farmers and 101 farm
cooperatives across five mid-
Atlantic states and in Puerto Rico.
Mid-year loan volume for the Dis
trict stood at $2.5 billion.
on January 1, 1987. The firm sells
a full range of two-wheel drive
agricultural and industrial tractors
and harvesting and haying equip
ment. It also builds diesel engines
for agricultural and truck use.
Acquisition of Versatile means
that Ford New Holland will now
have the capability to offer a full
range of tractors ranging from
small lawn and garden equipment
up to the giant 470 horsepower
Versatile 1156.
BUSINESS NE
Lebanon Valley Bank
Sponsors Hog Roast
Lebanon Valley National Bank sponsored a Hog
Roast for its Ephrata area farmers and Agri business
men on August sth at the Green Dragon Livestock
Yard. Over 260 farmers and Agri businessmen took
time out for lunch and enjoyed all they could eat roast
pork, sweet corn, macaroni salad, and homemade ice
cream. It was announced at the roast that Amos
Hursh, a steer and poultry farmer from Ephrata, and
Dr. Lynn Sammons, a veterinarian from Reading,
accepted a position on the LVNB Ag Advisory Board.
One of their new duties will be to guide and inform the
Agriculture Group on industry trends and ways LVNB
can better serve its farm customers.
LVNB is gearing up for their grand opening celebra
tion of their new Ephrata branch, October 1 st, 2nd, and
3rd. The Ephrata office will be the 12th branch for the
bank. LVNB is an asset sized bank of $357,000,000 as
of June 30,1987. LVNB has committed approximately
$5O million of its assets to Agricultural loans, which
represents nearly 20% of LVNB assets.
New Northrup King
maturities. In sunflowers, North
rup King’s strength is later maturi
ty hybrids with tolerance to Sclero
tinia basel stalk rot and high oil
content. Stauffer has good early
maturity sunflower hybrids.
Northrup King has long been rec
ognized as the leading developer
and marketer of high quality alfal
fa varieties with multiple pest
resistance. With the merger, The
New Northrup King will offer 21
alfalfa varieties. Its three premium
alfalfa varieties are Fortress from
Pride, Summit from Stauffer and
Commander from Northrup King.
Merger of the three brands into
The New Northrup King will allow
efficient management of expanded
service and research capabilities,
Jones said. The motto of The New
Northrup King is, “Seeds and Ser
vice Second to None.” Jones
emphasized that the merger
resulted in resources which allow
the new company to take a unique
approach to customer service.
“Service to the customer will be a
primary aspect differentiating The
New Northrup King from our com
petitors,” he said.
To assist in development of The
New Northrup King service prog
rams, four independent telephone
surveys of com, soybean, sorghum
and alfalfa growers were commis-
sioned. Early results from the
survey of com growers show that
when a seed company talks about
service; 36.8 percent of the far
mers surveyed think of helpful
dealers. Other frequently men
tioned services were prompt deliv
ery, good product availability and
a good replant program. Nearly
one-fourth of the farmers surveyed
said they would like to receive
additional services from seed com
panies. More than 60 percent of
those wanting additional services
said they wanted more agronomic
assistance and information.
With the merger, The New
Northrup King is able to field 13
agronomists, more than any of the
three companies had alone. Com
pany managers also announced
several new service programs
which they said were available
new because of combined resour
ces. One of these is a 1011-frce.num
ber that farmers can call for local
agronomic information. When a
farmer calls 1-800-AG VISOR a
central computer will route the call
to the appropriate The New North
rup King regional agronomist who
will respond to the farmer’s ques
tions within 24 hours. The
1-800-AGVISOR toll free number
will be installed by September.
(Turn to Page D 7)