Management Insights

Beef Northwest Feeders believes it is very important to continue to educate their employees. We, as a company, pride ourselves on keeping our employees up to date on current information so we can bring the most value possible to our customers. I recently had the opportunity to attend a CFO Round Table seminar sponsored by Northwest Farm Credit Services in Spokane, Washington. Following are some insights/opinions from speakers at the seminar:

70% of North American farm ground will change hands by 2025.

Local natural/organic products could be 20% of the marketplace over the next 10 years.

Water will replace oil as the limited resource in the future.

Women make 81% of the financial decisions in a family.

CNN had over 2 million daily viewers in 2004. Today there are 150,000 viewers. The big difference is people now get a lot of their news electronically.

Many economist/bankers feel interest rates will stay flat in 2010, but will increase 300 to 400 basis points in 2011-2012.

Credit markets are much tighter than prior to 2008.

It will take 5 years to get unemployment back to 6%.

The only way to pay for the "bailout" and "stimulus" is through higher taxes and interest rates. Both will go up.

Housing materials are down 80% from 2006 which is the #1 reason for the dramatic timber industry decline.

Survival = cost cutting, inventory reductions, non-core asset sales and bank covenant relief. These factors will be key ingredients.

The speakers and discussions at the conference gave me a good overall view of different types of agricultural enterprises in the Pacific Northwest and the types of challenges and opportunities they are facing. As a representative of the cattle industry, it was good to see that Beef Northwest is well positioned to take advantage of opportunities as they become available.

Because of the excellent relationships we have with our lenders, one of the advantages that we can share with our customers is very competitive financing rates for cattle and feed. In fact our terms are more attractive than most banks offer. We will finance feed and cattle 100% with only $175 per head equity required for cattle and no equity for feed financing. Today's interest rate is 4.9%. In this time of much tighter controls and requirements by banks we can be a good alternative source of capital. If this is something of interest, please contact Diana Goodman @ 541-898-2288.