Irrigation Investment

Nearly 80 percent of Ohio was classified as experiencing a “moderate drought” this season. Many consumers believe that the answer to this year’s drought is an easy and simple one — Use irrigation systems — An answer that farmers wish was as easily applied as it is recommended.

Farmers have been categorized, among other categories, as “dry-land farmers” or “irrigated farmers.”

“A dry-land farmer plants and prays,” said a farmer in a recent NPR news story.

So why don’t Midwest farmers utilize irrigation systems like their western and southern counterparts? There are multiple reasons according to Larry Brown, an Ohio State University Extension agricultural engineer and professor of food, agricultural and biological engineering:

• Often it’s cost prohibitive: cost of investment/maintenance, mechanical issues, repairs, fuel    
• There are water restrictions: demands 200 or more gallons of flow per minute; water sources such as ponds, streams, wells etc. are often depleted during droughts   
• It requires a permit   
• Summer rain is usually common in the Midwest   The sub-soil type is effective at containing moisture  

Dan Kamburoff, owner of Columbus Irrigation of Ashland, Ohio, said that the odds of needing irrigation for field crops are only about one or two years of 10, per a recent Farm and Dairy story.

“The irrigated farmer is in a completely different business,” said the NPR story author. 

Even with the many deterrents to investing in irrigation systems, many news stories have noted that irrigation dealers experienced increased interest this year because of the drought.  

Columbus Irrigation had a 40 percent business increase this year.

It will be interesting to note a potential increase of Ohio farmers who invest in irrigation systems during the coming years as a result of this year’s anomaly.

"Do your homework. For short periods in a typical Ohio growing season the return on the investment may not be there," said Brown.

Photo obtained from: farmanddairy.com

Core Farming Values

CORE VALUES: THE HEART OF EVERY SUCCESSFUL BUSINESS
How to create the vision and strategic plan that can guide the future of your farm — In three simple steps

How are Fortune 500 companies and small-farming operations the same? The success of each is based on strategic business planning.

This week, I’m sharing an article about the purpose and significance of defining core values and using them as a guiding strategy for the farm, written by Farm Futures Executive Editor Mike Wilson and originally published for Farm Futures’ May/June 2012 issue.

I hope that you consider its advice or share it with a fellow farmer to ensure the longevity of your farm.

Visit the link below to view Wilson’s story.
http://magissues.farmprogress.com/FFU/FF05May12/FF01%20to17.htmlhttp://magissues.farmprogress.com/FFU/FF05May12/FF01%20to17.html

Photo obtained from: wedgewoodbaptist.com

Far-Out Farmland Prices

It’s good to be an American farmland owner in the current $136 billion farm real-estate market. For example, two Iowa properties sold for a whopping $16,000/acre this past fall.

Farm value has tripled during the past decade — increasing the third quarter of 2011 by 25 percent in the Midwest — incited by food-price speculation, grain exports, ethanol production and borrowing costs at near-record lows.

“We have set all kinds of records,” said Bruce Brock of Brock Auction Company, Le Mars, Iowa, in author David Hest’s Farm Industry News story.

Between 2008 and 2009, Midwest farmland prices stabilized but then prices quickly increased — culminating in a two-year increase with reports of as much as 50 percent in some areas. Since 2010, Ohio has experienced a per-acre-value increase of $4,300 or 7.5 percent according to the USDA. Illinois has fared best of the Corn Belt states — experiencing a 16.3 percent increase, equating to a per-acre-value increase of $5,700.

However, notable land values bring headaches, such as competing with the emergence of offshore buyers and ensuring the sound transfer of farm estates to the next generation; succession planning becomes significantly more important. Other issues are increased property taxes for owners and land shortage for potential purchasers.

Additionally, many fear that these values won’t last and people with farm investments may endure economic loss.

“But lessons learned in the ’80s, combined with the strong balance sheets of most farmers, weigh against a similar calamity in the near term, observers say,” stated Hest.

Interest rates and commodity prices are the primary factors affecting the price of land and interest in purchasing it. Current commodities are strong and if food prices remain the same, their prices will stay steady. Interest rates are minimal.

The Farm Credit System (RDETCDET), created by Congress in 1916, increased its share of lending in the $136 billion farm real-estate market to 45 percent from 41.5 percent in 2007 and 35 percent in 2000, according to the USDA.

“We continue to see ag lending as a good opportunity for us,” said Robert Merck, senior managing director of real estate and agricultural investments at MetLife in Hest’s article. “It has performed well.”

Farmers would be wise to invest in property after a thorough assessment of current capital, debt and future projections with credible financial advisers.

Photo obtained from: Farm Industry News










What experts, advisers need to know about farmers

This week, I’m featuring a guest author. Dr. Val Farmer, a clinical psychologist specializing in family business consultation and mediation with farm families authored the following piece, which is a great reflection of the mindset of the American farmer.

*As originally printed in Farm & Ranch Guide, May 4, 2011
Author: Dr. Val Farmer


Which occupational group rivals physicians in receiving unsolicited mail? Which occupational group consumes a substantial portion of our nation’s industrial output and is the focus of persuasion from scientists, economists, financiers, legal and tax advisors, policymakers, extension agents and representatives of agribusiness?

If you are a regular reader of this column, you probably guessed it. Farmers and ranchers are the targets of intensive efforts of persuasion and education. But how well do people trying to influence them understand their motivations and needs? What do they need to know about farmers to be successful?

Long-term view. Farmers love their profession. Curiosity about life and growth, internal standards of excellence and a continued commitment to improvement offer a creative challenge. Farmers are applied biologists trying to manage the forces of nature and fashion a livelihood for their families.

Experience on the land gives them an understanding and appreciation of its productive capacity. Farming is never done. Tomorrow and the children’s tomorrows depend on wise stewardship of natural resources.

Farmers are committed to the continuity of their operations and take a long-range perspective on innovations. They can’t afford serious mistakes. Farmers gather information from many sources and are conservative in risk-taking. The vagaries of weather, cost of production and market conditions add to their reluctance to expose themselves to high-risk situations.

No cushion. Agriculture as a whole is an industry under stress. The farmer operates in one of the freest segments of a global market economy. There is no fixed or guaranteed income. There is no employer to take the risks or smooth over the shortfalls. Living with uncertainty and stress is the price they pay for freedom.

The freedom and control farmers experience is greatest when it comes to decisions about the use of the human, financial and natural resources at their disposal. Farmers resist control from outside but are usually amenable to influence. Within their span of control, the fabled independence of farmers is real.

Making a profit is crucial. Why should a farmer adopt a new idea or product? Experts often lose sight of the fact that their primary objective ought to be the economic success of the farmer. Convince a farmer that he or she can materially benefit from an innovation and that the costs of implementation are affordable, and it is likely they will do it.

Technical experts such as scientists and economists have to bridge the gap from theory to practical application. The expert with the security of a fixed income may forget about the bottom line.

There is no shortage of creative ideas or potential improvements, but there is a shortage of resources. If resources were abundant, action-oriented farmers would look hard at changes they would like to make.

Communication and relationships. As much energy needs to be put into presentation and communication as is put into basic research. Technical experts often neglect communication and persuasion and then are mystified why their work isn’t appreciated or adopted. Purists enamored with the technicalities and the ideal quickly lose their audience. They can’t see the prairie because of the grass.

Many excellent ideas are developed in another context. They have to be adapted to specific conditions. A good idea for one particular operator may not be a good idea for everybody.
Part of being an expert is to know a lot about a small part of the total system. A technical expert would do well to read and study broadly in related fields so that the information fits a context. The race they are running may be in their own bathtub.

Some of the experts are also inclined to be parochial to their institution or their school of thought instead of championing an idea because of its merit. What makes people persuasive is the honesty they bring to the entire discussion rather than selling a particular product.
The expert who comes on too strong forgets that his job is to influence, not control. The farmer doesn’t forget who actually makes the decisions and who has to live with the consequences.

Farmers respect results. They respect their peers. If four or five esteemed operators from a given community try an innovation and make it work, then it won’t be long before the rest will want to try it. Educational efforts can be directed at those farmers who are progressive and in an economic position to experiment.

Helping someone else succeed is a tremendously satisfying experience. The people supporting the farmer will succeed in their effort when they, along with the farmer, are able to look at the prairie instead of the grass.

Some people have too much pride to accept an idea if they don’t have it first. They prefer to hang back and criticize the others. They are not secure enough in themselves to entertain an outside idea on the basis of its value instead of judging its source.

Timing is everything. The timing of a new idea may be poor. A person under intense pressure may not be objective about new ideas. Similarly, a person who has already decided on a course of action or just mastered a skill will not want to change horses in midstream, no matter how good the other horses might be.

Photo obtained from: projectwordpress.org