Kenneth A. Spearman, Board Chairman and Chief Executive Officer

Dallas Tonsager, Board Member

Jeffery S. Hall, Board Member

MINUTES OF THE REGULAR MEETING

OF THE

FARM CREDIT ADMINISTRATION BOARD

August 11, 2016 

These minutes reflect the business transacted at the August 11, 2016, Regular Meeting of the Farm 

Credit Administration Board (FCA Board) pursuant to the Government in the Sunshine Act (Act), 5 

U.S.C. § 552b, and the regulations of the Farm Credit Administration (FCA) adopted thereunder.

The FCA Board meeting was held at the FCA office in McLean, Virginia, beginning at 9:00 a.m. and 

concluding at 10:28 a.m. Members of the Board present were:

Kenneth A. Spearman, Board Chairman and Chief Executive Officer

Dallas Tonsager, Member

Jeffery S. Hall, Member

The above named constituted the full Board. 

Others present included Charles Rawls, General Counsel; Dale Aultman, Secretary to the Board; staff 

of the FCA; and two members of the general public. (A list of staff attendees is attached as Exhibit 

A.) 

The Secretary read a statement that announced the meeting would be conducted according to the 

requirements of the Government in the Sunshine Act. 

Board Chairman Spearman reviewed the published Agenda. (A copy of the Public Announcement 

publishing the Agenda for the meeting is attached as Exhibit B.)

Mr. Tonsager moved to adopt the Agenda as published. 

Mr. Hall seconded the motion.

1
There being no further discussion, Board Chairman Spearman called the question.

The Secretary polled the Board Members and the motion carried unanimously.

Mr. Hall noted that the Agenda did include portions of the meeting that should be closed to the 

public as permitted by the Government in the Sunshine Act and therefore moved that the meeting 

be closed at that point. 

Mr. Tonsager seconded the motion.

There being no further discussion, Board Chairman Spearman called the question.

The Secretary polled the Board Members and the motion carried unanimously.

OPEN SESSION

Approval of Minutes

Minutes for July 14, 2016 Regular Board Meeting

(BM-11-AUG-16-01) 

Mr. Tonsager moved to approve the minutes for July 14, 2016, FCA Regular Board Meeting. 

Mr. Hall seconded the motion.

There being no further discussion, Board Chairman Spearman called the question.

The Secretary polled the Board Members and the motion carried unanimously. (BM-11-AUG-16-01) 

(A copy of the official “Board Action Item” is attached as Exhibit C.)

Reports

Economic Implication of Brexit

Walter Gardiner of the Office of Regulatory Policy presented the Economic Implication of Brexit.

Board Chairman Spearman asked if there were any questions or further discussion from the Board. 

There were no further questions or discussion. 

(A copy of the PowerPoint presentation is attached as Exhibit D.)

2
CLOSED SESSION

Board Chairman Spearman noted that this was a Closed Session and ensured that members of the 

public and nonessential FCA staff were not in the room so the Board could meet with Office of 

Secondary Market Oversight (OSMO) in Closed Session. 

Board Chairman Spearman convened the closed session of the meeting at 9:48 a.m. and instructed 

the Secretary to activate the electronic recording device so that the proceedings of the closed 

session were properly recorded as required by the Government in the Sunshine Act. 

Board Chairman Spearman then instructed the General Counsel to furnish the Secretary with a 

certification, pursuant to 5 U.S.C. § 552b(f), that the portions of the meeting held in closed session 

may be properly closed to the public. 

(A copy of the Certification is attached hereto as Exhibit E.) 

Members of the Board present were:

Kenneth A. Spearman, Board Chairman and Chief Executive Officer

Dallas Tonsager, Member

Jeffery S. Hall, Member

The above named constituted the full Board. 

Others present included Dale Aultman, Secretary to the Board; and Charles Rawls, General Counsel. 

(A list of staff attendees is attached as Exhibit A).

Office of Secondary Market Oversight Quarterly Report

Joe Connor of the Office of Secondary Market Oversight presented the OSMO Quarterly Report. 

Board Chairman Spearman asked if there were any questions or further discussion from the Board. 

There were no further questions or discussion.

ADJOURNMENT

There being no further business to come before the Board, Board Chairman Spearman indicated he 

would entertain a motion to adjourn the meeting.

Mr. Hall moved that the meeting be adjourned.

Mr. Tonsager seconded the motion.

Board Chairman Spearman called the question. 

3
The Secretary polled the Board Members and the motion carried unanimously.

The meeting adjourned at 10:28 a.m.

NOTATIONAL VOTE ACTION

There was one notational vote action approved by the FCA Board from July 15, 2016, through August

10, 2016 as follows:

Item Number Action Date Voting Results Subject

NV 16-14 8/8/16 Approved Updated Policy Statement #62 on Equal Employment Opportunity 

and Diversity.

The undersigned hereby certify that the foregoing minutes are the official minutes of the Regular

Meeting of the Farm Credit Administration Board held on August 11, 2016. 

_________/s/________________ _____________/s/____________

Kenneth A. Spearman Dale L. Aultman

Board Chairman and Chief Executive Officer Secretary to the Board

Approved September 8, 2016

4
Exhibit A

Page 1 of 2 

STAFF PRESENT AT THE 

FCA REGULAR BOARD MEETING

August 11, 2016

Kenneth A. Spearman, Board Chairman and Chief Executive Officer

Dallas Tonsager, Board Member

Jeffery S. Hall, Board Member

OFFICE

OPEN 

SESSION

CLOSED 

SESSION

Office of the Board

Aultman, Dale X X

Middleton, Russell X X

Laguarda, Wendy X X

Kramp, Kevin X X

Calhoun, Gaye X

Corey, Kathryn X

Donerson, Alexandra X

COO

Hoffman, William X X

OIT

Golley, Jerald X X

OCPA

Stokke, Mike X X

Meaux, Willy X X

OSMO

Rea, Laurie X X

Connor, Joe X X

Hudson, Bruce X X

OGC

Rawls, Charles X X

Donner, Mary Alice X

Strickland, Joy X X

5
Exhibit A

Page 2 of 2

OFFICE OPEN 

SESSION

CLOSED 

SESSION

OE

Paulsen, Roger X X

EEOI

Burlew, Thais X

OIG

Dean, Elizabeth X X

ORP

Van Meter, Gary X X

Mardock, Barry X X

Gardiner, Walter X

Gabriel, Steve X X

OCFO

Smith, Stephen X X

OAS

Fowlkes, Jerome X X

GENERAL PUBLIC 2

6
Exhibit B 

Farm Credit Administration Farm Credit Administration

1501 Farm Credit Drive

McLean, Virginia 22102-5090

PUBLIC ANNOUNCEMENT OF

MEETING SUBJECT TO THE GOVERNMENT IN THE SUNSHINE ACT

Farm Credit Administration Board

Regular Meeting

August 11, 2016 

Summary: Notice is hereby given, pursuant to the Government in the Sunshine Act (5 U.S.C. Sec. 552b (e) (1)), of the 

forthcoming regular meeting of the Farm Credit Administration Board.

Date and Time: The regular meeting of the Board will be held August 11, 2016. The meeting is scheduled to be held at 

the office of the Farm Credit Administration in McLean, Virginia, from 9:00 a.m. until such time as the Board may 

conclude its business.

Address: Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. Submit attendance 

requests via e-mail to VisitorRequest@FCA.gov. See SUPPLEMENTARY INFORMATION for further information about

attendance requests. 

For Further Information Contact: Dale L. Aultman, Secretary to the Farm Credit Administration Board (703) 883-4009. 

TTY is (703) 883-4056.

Supplementary Information: Parts of this meeting of the Board will be open to the public (limited space available), and 

parts will be closed to the public. Please send an e-mail to VisitorRequest@FCA.gov at least 24 hours before the meeting. 

In your e-mail include: name, postal address, entity you are representing (if applicable), and telephone number. You will 

receive an e-mail confirmation from us. Please be prepared to show a photo identification when you arrive. If you need 

assistance for accessibility reasons, or if you have any questions, contact Dale L. Aultman, Secretary to the Farm Credit 

Administration Board, at (703) 883-4009. The matters to be considered at the meeting are:

OPEN SESSION

Approval of Minutes

1 July 14, 2016 

Reports

 2 Economic Implications of Brexit

CLOSED SESSION

 3 Office of Secondary Market Oversight Quarterly Report1

_ August 1, 2016_______ _________/s/________________

Date Dale L. Aultman

Secretary to the Board 1Session Closed-Exempt pursuant to 5 U.S.C. Section 552b(c)(8) and (9).

7
Exhibit C 

Farm Credit Administration 1501 Farm Credit Drive

McLean, Virginia 22102-5090

(703) 883-4000

BOARD ACTION ITEM

FCA BOARD ACTION ON

Minutes for July 14, 2016 Regular Board Meeting

BM-11-AUG-16-01

Effective Date: August 11, 2016

Effect on Previous Action: None

THE FCA BOARD HEREBY:

Approves the minutes for July 14, 2016, Regular Board Meeting as submitted.

DATED THIS 11th DAY OF AUGUST 2016 

BY ORDER OF THE BOARD

_________/s/________________

Dale L. Aultman

Secretary to the Board 

8
FCA Board Meeting 

August 2016

Economic Implications 

of Brexit

August 11, 2016

Walter Gardiner

Senior Economist

Office of Regulatory Policy

9

Exhibit D
European Union becoming “disunited”

2

U.K.

June 23, 2016:

U.K. citizens vote 

for British exit 

from EU - “Brexit”

10
Brexit shocks global financial 

markets the day after the vote

 Equity markets dropped from 3% to 11% in value.

 Dow Jones industrial average fell 600 points, or 3.5%,

erasing $3 trillion in value.

 S&P, Fitch and Moody’s downgraded UK debt.

 British pound depreciated by largest amount in 1 day.

 U.S. dollar appreciated against most currencies.

 Government bond yields dropped in most countries.

3

11
Dollar surged 15% against British pound 

but has settled around 12% higher

4

12
Dollar increased 3.4% on euro but 

has recently settled to 1.5% higher

5

13
U.S. dollar mixed against most 

currencies today

6

14
Bond yields drop then recover somewhat

7

15
FCS debt yields decline on Brexit

8

16
Little change in commodity prices

9

17
UK economy to slow post-Brexit

 Loss of wealth from sharp decline in stock market

 Capital flight from the UK to safe havens like U.S.

 Depreciating pound raises cost of imports

 Consumer confidence shaken, spending reduced

 Loss of free trade with EU in 2 years

 Foreign-based companies may leave the UK

 Sovereign debt downgraded by rating agencies

10

18
UK GDP growth forecast revised down

11

19
UK inflation expected to rise on 

higher import prices

12

20
U.S. exports to the UK and the EU 

have stagnated around 2008 peak

13

21
UK: 8th largest market for U.S. 

agricultural and related products

14

(Dollar figures in billions)

22
Key U.S. ag exports to UK: forest 

products, tree nuts, fish, soybeans

15

(Dollar figures in millions)

23
U.S. ag exports to the UK expected 

to decline with stronger dollar

16

24
U.S. ag trade deficit with the EU 

likely to worsen due to strong dollar

17

25
U.S. agriculture has significant 

exposure to international events

18

26
FCS has significant concentration in 

commodities with large trade exposure

19

Farm Credit System commodity loans, as of December 31, 2015, and

Commodity exports as a % of production, 2015 or 2014/2015 Marketing Year*

Commodity Amount % of Commodity

Loan Type $ Millions Total Exports as a % of production

Grains and soybeans $41,710 17.7% Soybeans 46.9%, wheat 41.3%, rice 31.8%, 

soybean meal 29.2%, corn 13.0%, soybean oil 9.4%

Cattle 22,347 9.5% Beef and veal 9.5%

Dairy farms 15,265 6.5% Nonfat dry milk 55.5%, whole milk powder 36.4%, 

cheese 5.9%, butter 2.7%

Forestry 14,855 6.3% Timber products 18.1%

Tree fruits, nuts and grapes 11,392 4.8% Walnuts 70.5%, almonds 67.9%, grapes 40.8%, 

apples 20.4%

Poultry and eggs 5,966 2.5% Broilers 16.6%, turkeys 9.5%, eggs 4.0%

Hogs 4,963 2.1% Pork 20.3%

Cotton 2,172 0.9% Cotton 68.9%

Biofuels, primarily ethanol 951 0.4% Ethanol 5.9%

* Exports as a % of production for livestock, dairy products, eggs and ethanol are for calendar year 2015;

timber products are for 2013. Crops are on a 2014/2015 marketing year basis.

Source: Loan data from Federal Farm Credit Banks Funding Corporation, 2015 Annual Information Statement.

Export and production data from USDA, Foreign Agricultural Service and Forest Service.

27
What might a prolonged period of 

dollar strength look like?

20

Real ag export-weighted dollar exchange rates and projections

28
U.S. ag exports would take a hit 

from prolonged dollar strength

21

Impact of extended period of dollar strengthening on 2016 USDA projections of corn exports

29
Breaking up is hard to do!

 Evolving political crisis in the UK and the EU

 Uncertainties about the separation process

 Volatility in global financial markets

 London’s status as the largest global financial

center

 Impact on UK economy and spillover effects

 Impact on global trade and U.S. exports

22

30
Brexit exacerbates an already 

difficult trade situation for U.S.

 U.S. exports to and imports from UK are small (0.7% and 

0.6% of U.S. GDP, respectively), but trade with world is 

significant (exports = 12.5% of GDP, imports = 15.3%).

 U.S. had a $763 billion trade deficit for 2015.

 Stronger dollar will further reduce U.S. exports and 

increase imports, expanding trade deficit.

 Earnings reduced for export-oriented U.S. companies.

 Cheaper imports will displace U.S. domestic sales.

23

31
Take Aways from Brexit

 Market volatility has declined but uncertainty over

Brexit will continue to shape markets.

 Interest rate hike by the Fed is delayed.

 Continued low interest rates positive for U.S.

agriculture.

 Lower U.S. ag exports puts additional downward

pressure on commodity prices and farm income.

 Once UK leaves EU in 2+ years, U.S. farmers could

see pick up in trade with UK. 24

32
Questions?

33
Exhibit E 

Farm Credit Administration 1501 Farm Credit Drive

McLean, Virginia 22102-5090

CERTIFICATE OF CLOSED MEETING

The General Counsel, in accordance with the Government in the Sunshine Act, 5 U.S.C. § 552b(f)(1), 

hereby certifies that the Farm Credit Administration Board regular meeting of August 11, 2016, was 

properly closed to the public on the basis of the exemption set forth below:

• Supervisory and Oversight Activities of FCS Institution(s) – 5 U.S.C. § 552b(c)(8)

and (9).

 _________/s/________________ Date: August 11, 2016 

Charles R. Rawls

General Counsel 

34