More than 8,100 Farm Credit Illinois (FCI) borrowers receive their share of a $40 million cash patronage distribution this week.
This is FCI’s fourth annual patronage distribution and represents 45.7% of the Association’s 2021 net earnings. In January, FCI’s Board of Directors declared a $40 million distribution after reviewing 2021 year-end financials and projecting capital and business needs for the coming year.
In true cooperative spirit and demonstrating the principle of Member Economic Participation, patronage is distributed proportionally based on the business value each 2021 loan contributed to the cooperative. Checks are delivered the week of June 20-24.
Cash patronage returns a portion of the interest accrued during the previous year. The $40 million cash patronage distribution lowered the effective interest rate of 90% of traditional 2021 operating loans by at least 1.63%. And 90% of all traditional real estate loans without corresponding advance payment interest-bearing accounts had an effective interest rate reduction of at least 0.98%. Loans for young and beginning farmers with discounted interest rates had lower reductions.
“Last year’s low upfront interest rates are now even lower, thanks to cash patronage,” says David Haase, FCI Board Chair. “Even with today’s pressures in the financial markets, members can pencil in patronage annually thanks to the Board’s long-term capital management plan that prioritizes low upfront interest rates and consistent patronage payouts while managing capital conservatively.”
“Patronage is a tangible tribute to the diligent work and disciplined management our member-borrowers practice – especially during times of volatility and unpredictable economic challenges,” says Aaron Johnson, FCI President and CEO. “This week celebrates the value of cooperative membership and demonstrates FCI’s mission of Helping Farm Families Succeed.”
About Farm Credit Illinois
Farm Credit Illinois (FCI) is an agricultural financial cooperative owned by 16,000 farmer, rural landowner, and agribusiness voting stockholder members in the southern 60 counties of Illinois. Dedicated to Helping Farm Families Succeed, FCI provides competitive and flexible financing, crop insurance expertise, and Rural 1st® country life lending. FCI manages a $5.1 billion loan portfolio, sells 1.5 million acres of crop insurance coverage, and employs 260 staff in the Mahomet headquarters and 14 regional offices. The Association will return $40 million of 2021 earnings as cash patronage to member-borrowers in 2022. The U.S. Farm Credit System is a network of locally owned cooperatives supporting rural communities, farm families, and agriculture with reliable, consistent credit and financial services today and tomorrow.