Annual Meeting PPT Template
2013 Pork Management Conference Your Pork Industry Investment
LOL Finance Company Dan Glienke CEO June 20, 2012
Who are we…. • Subsidiary of Land O’Lakes, Inc. • Focus on the livestock industry and projects for the benefit of Land O’Lakes and its members. • Lend to swine, cattle, dairy and poultry producers. • Loan funded in 27 states. • Six loan officers: – Iowa (2), Minnesota, Nebraska, North Dakota and South Dakota.
• 2012 loan approvals 120% increase over 2011.
Loan types Type Swine Cattle
% 57 25
Real Estate
16
Other
2
Lending Perspective Financial Criteria • • • •
Equity to Asset Ratio Current Ratio Repayment Capacity Loan to Value
30% to 50% 1:1 to 1.75:1 110% to 120% 65% to 85%
Criteria based on amount of retained production, marketing and input cost risk.
Lend to successful livestock systems. • Proven production history. • Competitive production costs. • Sound marketing plan. – Margin management.
• Processor relationship.
Margin Risk • “Corn was supposed to go down” • No one can predict where to market is going. Quarter 03/13/2012 07/26/2012 ISU return Variance
2nd 2012 3rd 2012 4th 2012 1st 2013 Average
$23.98 $23.46 $12.84 $12.84 $18.42
$(35.99) $(24.73)
$8.03 $(17.44) $(33.83) $(32.96) $(18.96)
$(15.95) $(40.90) $(47.23) $(45.46) $(37.38)
Loan covenant: Marketing plan with the objective to actively monitor and manage forward margins in an effort to reduce or eliminate the effect of adverse commodity prices.
Thank you!
LOL Finance Company Dan Glienke CEO June 20, 2012
Who are we…. • Subsidiary of Land O’Lakes, Inc. • Focus on the livestock industry and projects for the benefit of Land O’Lakes and its members. • Lend to swine, cattle, dairy and poultry producers. • Loan funded in 27 states. • Six loan officers: – Iowa (2), Minnesota, Nebraska, North Dakota and South Dakota.
• 2012 loan approvals 120% increase over 2011.
Loan types Type Swine Cattle
% 57 25
Real Estate
16
Other
2
Lending Perspective Financial Criteria • • • •
Equity to Asset Ratio Current Ratio Repayment Capacity Loan to Value
30% to 50% 1:1 to 1.75:1 110% to 120% 65% to 85%
Criteria based on amount of retained production, marketing and input cost risk.
Lend to successful livestock systems. • Proven production history. • Competitive production costs. • Sound marketing plan. – Margin management.
• Processor relationship.
Margin Risk • “Corn was supposed to go down” • No one can predict where to market is going. Quarter 03/13/2012 07/26/2012 ISU return Variance
2nd 2012 3rd 2012 4th 2012 1st 2013 Average
$23.98 $23.46 $12.84 $12.84 $18.42
$(35.99) $(24.73)
$8.03 $(17.44) $(33.83) $(32.96) $(18.96)
$(15.95) $(40.90) $(47.23) $(45.46) $(37.38)
Loan covenant: Marketing plan with the objective to actively monitor and manage forward margins in an effort to reduce or eliminate the effect of adverse commodity prices.
Thank you!
