First Full Day of Top Farmer

Today was the first full day of the Top Farmer conference and it was packed with a lot of good sessions.  Due to finding out that I had to get something done early this morning, I missed the most of the morning session, but here are my highlights from the rest of the day.

• Right before lunch was an interesting recap of the profits earned by corn growers around the world.  Although many countries yields are not as good as the US,their cost structure, in many cases is much lower than ours.  For example, Russia’s yields and prices are about half of ours, but their profit for 2012 was much higher since their cost structure is much lower.  It becomes very apparent how Argentina’s export tax and low prices affect their corn farmers.  Their yields are close to ours, their costs are much lower, however, they barely break-even due to the government taxes and restrictions.
• We then had a discussion on the value of adding organic material to the soil.  A local farmer described their efforts over the last 20 years to add organic material by using cover crops and no-till.  Based on his analysis, he believes this has added about $150 of value to his margin each year.
• My next session was on the using the spreadsheet tools available from the FarmDoc crew at the University of Illinois.  I have posted on their site several times and we used the crop budget spreadsheet to estimate the income for a 2013 farmer under various situations.  For a 2,000 acre farmer who did not use crop insurance, having a bad yield and price resulted in a $600,000 loss.  Farmers with crop insurance for 2013 have most likely locked in a profit, but 2014 will be the wild card.
• Bernie Evern from Ohio State University then gave a discussion the power of a good interview by farmers.   The effective use of the interview process leads to finding good people who will stick with you for a long-time.  The ineffective use will result in high turnover and extra costs.  It is more important to ask questions about what the job applicant has done in the past, then what he might do in the future.  Too many applicants tell you what you want to hear based on their observations before and during the interview.  It is your job to not let this sway your decision.
• Last, we went out into field and had a discussion on the use of variable applications of fertilizer using infrared technology, etc.  Our human eye assumes that when a corn plant is deep green it has plenty of nitrogen.  The use of sensors in many cases will prove otherwise.  This technology is still evolving and may not quite yet have an appropriate pay-out based on the investment.

We finished up at a local restaurant and had three undergraduates fill us in on their experiences in a new class offered by Purdue.  This class involved visiting various farms and agribusinesses in the area and their feedback was very informative.  Based on these students, I think the Ag industry is in good shape for the future.  Many great students are enrolled in Ag and we need them.

That is all for today and I will update after tomorrow’s last day.

Paul Neiffer, CPA