August 1, From the Desk of Adam Boryca, Cozad Branch

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1 August 1, 2014 Markets: by Eric Ide Where we were compared to where we are Live Cattle (Aug): $ $ $ $ $ Feeder Cattle: (Aug): $ $ $ $ $ Steers: (7 wt avg.): $ $ $ $ $ Heifers: (7 wt avg.): $ $ $ $ $ Corn (Jul): $ 3.61 $ 4.79 $ 8.00 $ 6.98 $ 3.93 Beans (Jul): $ $ $ $ $ % Percent Interest From the Desk of Adam Boryca, Cozad Branch In past newsletters I have written about below market rate interest rates that input and equipment dealers offer. I have always said if it looks too good to be true, it usually is. I have discussed how the dealers are able to charge you more for the item they are selling to off-set, or buy-down, the interest rate. Well, now I have another fact to show you that this is actually what they are doing. The other day I had a customer tell me that he was negotiating a piece of equipment with a dealer. The negotiation was based on a cash price and they have come together on a price, but before the deal was accepted, the customer asked for the low 1.9% financing.

2 August 1, 2014 Page 2 The answer that the customer received from the dealer, not only shocked my customer, but it shocked me. The dealer said the only way that you can receive the 1.9% financing is if you paid for it. If you pay an additional $19,000 for the piece of equipment, he would offer you the 1.9% financing. WOW, this is exactly what I have been saying. So this is 100% proof that if you have taken the below market rates, this is not exactly what you are paying. To get this rate, you paid too much for the equipment and the dealer just brought down your interest rate. It would be no different than the bank loaning you $10,000 at 0% for one year, but then only giving you $9, and the Bank keeping the $500. Even though your loan is at 0%, the bank earned 5.0% on the loan. So, next time you are offered a low interest rate, please remember that if you accept the rate, you just overpaid for the product you purchased. You are much better off talking to your loan officer and buying the input or equipment at a cash price and paying market rate interest with the bank. What s That Smell? From the Desk of Richard Johnson, Lexington Branch The Dawson County Fair Grounds played host to the UNL Extension Manure Symposium today. I told someone I was going to a manure spreading demonstration and they asked if it was a political rally! Seriously, most of the speakers either talked about value added or telling our story. Did you know that caffeine is a pesticide? The coffee plant produces caffeine to repel insects. Did you know that Australia has become a new importer of farm products? They have passed so many regulations that they cannot raise enough food to feed their population. Did you know that Nebraska does not have enough hog finishing facilities to feed all the pigs born here? All interesting facts and all point to current/ongoing issues for agriculture and agriculture in Nebraska. If we do not tell our story, it will not be told correctly. If we don t share the facts, the facts will be distorted and twisted. If we don t get our talented youth to return to the Nebraska agricultural landscape who will carry on the fight and the traditions? Take a roll, listen, and be involved. Every agency and group out there is trying to put just a little more control on agriculture all the time. Know where your candidates stand, know who is on your side, and, even more importantly, know who is not on your side. Here at Homestead Bank we are standing for Nebraska farmers and ranchers. Always have, always will.

3 August 1, 2014 Page 3 Hometown Banker From the Desk of Mark Simonson, St. Paul Branch Being a banker in a small town has many advantages. To me, the biggest advantage is getting to know customers on a personal basis. Building a relationship with a borrower and watching their operation grow and prosper is an honor. Helping a farmer or rancher through a difficult situation is what community bankers specialize in. We are always here to lend a helpful ear and offer a suggestion. Since I am still the new guy here, I am looking forward to getting to know all of my customers better. If you are in the bank, stop by my office and say hi. I will also be out making farm visits in the near future. From the Desk of Kevin Hoffart, Schuyler Branch The month of July has come and gone. It is always a great month for family vacations and county fairs. The weather was favorable for the growing crops and hopefully everyone got a chance to enjoy a few days of recreation during the month. August is now upon us and, even though it is in the middle part of the year, it can be a month of new beginnings. Early in the month, many people are trying to get activities completed so they are ready for the new school year to begin with all the expectations and anticipation for the year. High School and College Athletics start to practice and gear up for the fall sports and by the end of the month they will have already played some games. The Huskers play their first football game on August 30th and I am sure it will be an entertaining season. Labor Day, on September 1 st, makes the last weekend in August a long one. After that, our thoughts will turn to the harvest which will be right around the corner. At Homestead Bank we have a couple of things that will be new also. With the onset of the new Homestead Secure checking accounts in August, we are excited about the features and benefits of these accounts for our customers, especially the ID monitoring and the cell phone protection. In addition, before the end of August, the Schuyler Office is looking forward to beginning a remodeling project that will take a couple of months. A great deal of planning has occurred and it will be exciting to see when it is finished. During the process, if at all possible, we certainly do not want to inconvenience our valued customers in any way and we ask for your patience and understanding throughout that time. August, like every other month it seems, will be a busy one. We hope everyone has a safe and productive month. The Dog Days of Summer From the Desk of Jeff Spiehs, Albion Branch

4 August 1, 2014 Page 4 One thing about living in Nebraska, the weather always gives you something to talk about. Irrigation has been running non-stop since the first week in July. Seems we can t buy a rain these days in the Albion area. The month of July saw.75 of rain spread out in 3 different showers. If you haven t noticed the corn and bean markets have been spiraling downward. At last check the December corn was trading at $3.60 and November beans at These are significantly lower than the spring prices of $4.62 and $11.36 for your Federal Crop Insurance. This puts the corn price at 78% of the spring price and beans are 94% of the spring price. On corn this means if you carry 85% or 80% coverage on your Federal Crop policy and raise your APH or less, you would trigger a loss on your corn at these prices. Soybeans would still take a production loss to trigger a loss. Remember as prices move lower, this could trigger revenue losses on your corn and possibly your soybeans. The actual fall prices will not be set until the month of October, however just be aware of how this could affect your crop insurance policy. Visit with your crop insurance agent especially before you start chopping silage or harvesting high moisture corn as you would hate to lose out on a claim because of not reporting the production correctly on those units. In 2 weeks our children will be headed back to school, school busses will be running, kids will be out and about on the streets, walking and riding bikes and in some cases driving for the first time. Please remember to slow down during this busy time of year and keep an extra eye open for them. Farmers From the Desk of Bob Ritzdorf, Howells Branch The term farmer means a person who manages or operates a farm. Farming means the business of operating a farm. Livestock means animals kept for use on a farm or to raise for sale. This is according to the Webster Dictionary, copyright That may have been appropriate for that time or before but since that time and especially in the past two decades we have seen enormous changes from no-till to satellite technology for just about everything. I think we should rename a farmer to be executive manager of agricultural operations. Here are just a few of the things that they are involved with. Continuous updating of technology, marketing, financial matters, land management, government programs, insurance programs, applicators, operators of trucks and equipment, manage employees, livestock managers and the most important thing of all being involved with the family. On another subject, we like everyone have seen storms in our area. It s difficult to see a corn field shredded by hail and another one about a mile away looking like a bumper crop. Weather is still the part of farming that we can t manage. Insurance can be expensive but makes sleeping easier at night with the amount of money invested in today s crops. We at Homestead Bank want to be part of your journey and help you with your many decisions. From the Desk of Justin Schneider, Homestead Insurance

5 August 1, 2014 Page 5 I want to remind everyone as we get closer to harvest, anything you do not plan to take to harvest needs to be appraised. If you are cutting silage, call me a couple of weeks before you plan to start so I can get an adjuster out to appraise the production to use for your production history. This is very important and requires just a minute of your time to give me a call. If you have not reported your winter wheat production, you need to do so as soon as possible. If you had RP coverage, the harvest price will be established at the end of July, but it currently (July 30th) is at $6.44 and the base price was $7.11, so there is a possibility you could have a revenue loss even if you didn t have a bushel loss. The 2015 deadline for making changes, cancelling, or writing winter wheat is 9/30/2014. We will not know what the base price will be until after 9/14/2014. I will start working on quotes for my wheat customers about the middle of August and it will be much easier if I have all of your 2014 wheat yields. All prices, rates, and information are collected from different sources. Information is not guaranteed and is intended for informational purposes only.