Members will be paid proportionally based on their 2023 net interest margin contributions of their patronage-eligible loans and associated Funds Held accounts.

Factors impacting each loan’s unique net interest margin contribution include the loan type and terms, market conditions at loan closing, and the usage of Funds Held.

Patronage checks will be dated June 10 and are expected to arrive that week. Patronage is paid to eligible borrowers who are allocated a patronage payment of $25 or more.

Cash patronage returns a portion of the interest accrued during the previous year. Over the past four years and across the entire member loan portfolio, cash patronage reduced effective interest rates on average by about 1.0%.

A member’s overall effective interest rate reduction (patronage earned divided by the average daily balance of all patronage-eligible FCI loans) will be calculated at the bottom of the patronage breakout table on the letter attached to their check.

As cooperative membership and loan volume grow, the Association improves its overall cost and business efficiencies. There is a direct link between this increased business and FCI’s ability to deliver greater member value. Members also benefit from the cooperative’s diverse revenue streams including:

• Crop insurance premiums
• AgDirect equipment financing
• Rural 1^st® country life loans
• ProPartners input financing
• Capital Markets Group agribusiness loans
• Agri-Access secondary market agricultural financing

No – FCI remains committed to keeping interest rates low upfront. For many years, FCI has offered some of the lowest interest rates in the nation among Farm Credit Associations and intends to keep this System position.

FCI first distributed cash patronage in 2019. While the Association’s strategic capital management plan requires the directors to respond to loan portfolio growth and net earnings when deciding the annual amount of patronage to declare, cooperative members can pencil-in patronage each June from FCI's previous year's earnings.

The Board prioritizes maintaining a strong capital position, funding initiatives that support members and the marketplace, and offering low upfront interest rates – while also further lowering members’ effective interest rates through annual cash patronage distributions.

Patronage is distributed to members the following year

Members can expect an annual patronage declaration as long as FCI can continue delivering low upfront interest rates, maintain adequate capital to meet regulatory requirements, and weather potential farm economy volatility. The Board is committed to managing the Association’s capital conservatively and responsibly.

Because every FCI patronage check is for at least $25, every individual and business who receives a patronage check will receive a corresponding IRS Form 1099-PATR the following year. Consult a tax professional with any tax-related questions.

Capital not distributed as patronage is retained to ensure the cooperative remains financially stable and in a strong capital position while delivering low upfront interest rates, capitalizing for current and future growth, supporting member and marketplace initiatives, and carrying out its mission of Helping Farm Families Succeed.

One check will be issued per primary borrower and be made payable to the primary borrower.  An itemized listing of each affiliated loan’s patronage amount will be provided. Both business entities and individuals will receive patronage checks.

FCI’s Board of Directors had been considering patronage for a number of years, but first built a strong capital foundation to ensure the Association would remain financially stable and in a position to achieve business priorities even when distributing patronage.

In 2018, the Board formally adopted a cash patronage program to become part of the member-borrower experience while still providing low interest rates, a strong capital position for the future, and initiatives supporting members and their local communities.