Higher input and commodity prices, rising interest rates and inflation may make it more difficult to evaluate when we should make a deal, or stand firm with our current situation. Shay Foulk helps us look at key factors when it comes to big ticket purchases and we explore alternatives that may be a better fit. Plus I’ll have a special Memorial Day interview you won’t want to miss.
This edition of Farming. The countryside is brought to you by pivot Biop proven 40 os the nitrogen you need. Now on seed, learn more at pivot bio dot com.
Welcome to farm in the countryside. I'm Andrew mccray. Higher input and commodity prices, rising interest rates and inflation may make it more difficult to evaluate when we should make a deal or stand firm with our current situation. She folk helps us look at key factors when it comes to big ticket purchases and we explore alternatives that may be a better fit. Plus I'll have a special Memorial Day interview. You won't want to miss. Those are our topics for this week's farm in the countryside brought to you by pivot. Bio
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I think a lot of us are having to get a new set of numbers in our head. What I mean by that is land and machinery prices have increased along with interest rates and it can seem like a much different world when it comes to making decisions about large purchases than it did just a couple of years ago. At least that's what I experience on our own farm. Shay Folk with Ag View solutions. Discussed with me some of the key items we need to keep in mind when evaluating some of those purchases
because equipment costs are what they are. In some cases, they can be quite extraordinary for even a smaller operation.
Do some of us need to be thinking about how I do things different, whether I custom hire some more of this to be done or I split to share that can be difficult sometimes. But some of this equipment, what are you seeing out there with folks just dealing with sometimes pieces of equipment that are very valuable but also don't get used that much during a year. That is a fantastic question. So the last three years has generated more interest and collaborative opportunities than probably the last decade combined.
And when I say collaborative opportunities, I use that word very carefully because it's not alliances and it's not strategic harvest operations or strategic field work. You have to be in a collaboration for the right reason. We tell people,
you can think of 20 farmers in a 15 mile area that you'd never work with in a million years. But it's finding the one or two people that have the same vision, the same progressive outlook and are willing to, you know, pull the labor pool, the resources for a rising tide to lift all ships. Right. So, you know, when you look at how do we do things differently, we've definitely seen the collaborations increase. The other thing that we've seen is sizing appropriately.
So as we see some farm operations experiencing rapid growth or I would say significant growth over the last five years, in particular, we're going to see that continue to accelerate. So they've taken a more conscious effort, particularly when looking at the equipment valuations and the equipment use and efficiency and said
we can do more with less by sizing accordingly and it's not always bigger. Sometimes it's just, it's just more machines to cover more ground. But
instead of focusing on what you're writing a check for, look at the value that it's bringing back, what's the timeliness that we can get this corn crop out and not have to deal with some phantom yield loss. How quickly can we get the crop in the ground to capitalize on good ground conditions and good emergence, the timeliness of spraying, making sure that we can get there, get the weeds killed and have high efficacy when it comes to fun
applications. So that's some of the diversification and change that we've seen and I think we're going to see a lot more of that moving forward. The one thing that you mentioned there that's difficult sometimes is the timing of it. How do you see people get around that? Will that always be difficult or can we get the equipment big enough that we can just get over the acres and we can share it with somebody else or whatever arrangement we have. How are you finding people deal with that challenge?
It's a really good question. Um I think having the right amount of people in place is crucial. So labor is a challenge for anywhere. But if you have depth and people that can operate, a lot of what we've seen has gone more towards the business strategy outlook of maybe we need to run multiple shifts, you know, maybe we need to keep that planter going for 24 hours. Sizing certainly has a portion of
it. But speed is also another factor. I mean, you look at a 24 row high speed planner that can now plant corn, soybeans, wheat, whatever else at nine miles an hour. That's not just two times the efficiency of what you were doing before. It's about 300% efficiency in the number of acres that you can cover how you manage your logistics. So speed has been a huge portion of that, the
labor and making sure you have the right resources. And then the final thing that I would say is the support and service from your input providers. We will only continue to see the progressive farm operations and the the farm operations of the future demand and ask more of the input providers. And I don't, you know, if you're, if you're a input provider listening to that,
this should not be a daunting task. This should be an incredible opportunity for you to provide the value and to develop the professionalism that your business needs. And I think it's going to create some really unique and some really awesome opportunities between farm operations and the people they work with in the future.
So far, we've mostly focused on ownership and in this case, maybe owning in partnership somehow with other operations. What about the leasing side of things? Certainly that has become interesting because for folks that have leases coming up, sometimes the buyback clause has become pretty lucrative. But what do you advise on some of that
leasing is a different animal? We've seen some be very beneficial. We see farm operations that do almost 100% leases where they struggle is they don't have the gain in net equity or the leverage for borrowing power for when you have tough years or you have a period of lower commodity prices. And if you don't have that chat or collateral to work,
we've seen some issues with lending institutions kind of want to keep about a five ft pole and say, well, we're going to watch you really, really closely. Do I think that's the right answer? No, not necessarily because these operations tend to be the ones that understand what's going on in their business.
But, but, but there, there is an opportunity there to not have to tie up a tremendous amount of working capital, especially for a new purchase, right? So if you're, if you're looking to try something, if you want to have a better, more efficient sprayer or maybe a strip till unit or a one off like a flamer or something like that, leasing might be a good option.
You don't have to go a whole hog on investing those dollars in a depreciating asset that you're not sure is going to generate the return. So there's fits for it. It's still not gaining as much traction. I think as some people in the industry thought that it might, but we might see more of that more of the Uber methodology moving forward, right? Someone else owns the equipment and we just happen to use it
as I think about my operation, many of us just have a operation, whether it's a Corp or maybe it's a partnership or whatever should I be thinking about at this point? Looking at different entities? Because some of this becomes somewhat complicated. I'm trying to get a hold of my figures. Does that help to split some of those entities out? Sometimes? Yes. Uh clarity and operations is crucial, not only from an accounting perspective but just understanding what's going on in your business. And I'll use two examples here. One is in a, an equipment entity and one is a trucking entity.
So unfortunately for most truck operations, trucking is a cost reduction center, it's not a money making endeavor. And until you separate that out, whether you like what the numbers say or not, it's really hard to understand the cost that can get sunk into that type of an operation. The second thing is just a clear idea of what's going on in the business. So for instance, if you have an equipment entity
and you pay for all the fuel maintenance, repairs, uh you know, labor costs that are associated with that and you have a separate line of credit there, you know, to the penny, what it's costing you to run that equipment and how you can progressively manage it moving forward. You know, in a presentation here, I was talking about farmer Brad or farmer a whatever you want to call them. And a farmer might
have as a sole proprietor owned land, a bin and a dryer. They got a house, they got an old chicken shed. Maybe they own a laundromat. They got prepaid expenses, they got equipment, they got trucks and trailers. How in the world do you ever decipher and make key decisions out of that? And it's worked in the past for a lot of people and I'm not, I'm not trying to knock on anyone that has been successful by doing it that way.
But we're just talking about so many dollars and so much more risk in today's environment. I think that separation needs to be clear. We often get pushback from that too saying, well, you know that
if it's operated as an LLC or a separate structure and something were to happen from a liability perspective, they can push right through that. No, they can't. If you're driving down the road and you look up at that semi next to you, the trailer says Walmart, but if you look closely at the truck, it says Walmart Transportation, L. So if something happens to that Walmart Transportation LLC truck, you think Walmart is getting sued.
No, that's what limited liability companies exist for. And it's in the name, you need to operate it correctly. You need to have your own checking account, your own insurance. It needs to pay the bills and it needs to have clear invoices, but there's an opportunity for liability protection there as well. We don't like to think of this scenario. But if you have a four wheel drive tractor with a tillage implement and it pulls out and an accident occurs and someone is injured or worse killed.
And all of a sudden, farmer Brad has all of his assets, millions of dollars of land, millions of dollars worth of equipment, guess what? They're coming after they're coming after everything. And that's not a fear mongering tactic. Unfortunately, about three or four operations a year that we work with experience some kind of loss or some kind of claim. One actually happened here a few weeks ago at a close client of ours. And it's scary, but if you have that protection in place,
you can sleep a little bit easier at night. So not only from the liability standpoint, but just from understanding a clear picture of what's going on in the business and finally transition planning and next generation, ok. It gets really sticky if it's you and I trying to do a transition between equipment and land and management and estate planning. If you can separate out those portions of the business and provide a clear understanding and a clear path for the next generation,
man, you, you're really setting them up for success. I know you aren't a lawyer, so you aren't actually writing these. But is it necessarily that difficult? Some of us say, oh, I don't want to go through that hassle. Is there really a lot of hassle to be able to do all that. No, it is a process. So I'll say that typically 6 to 18 months is kind of the timeline on getting that set up. I would say most of our clients
have it set up within the operating year. They're going to have the equipment LLC, the trucking LLC fully established, know what they're going to charge, have their rates set up and have it set up as a legal functioning entity. The quickest we've ever seen it done was in about eight weeks, but the farmer's wife happened to be an attorney. So that certainly helped
any other things that should be top of mind from your point of view out there working with a lot of farmers, you know, the, the key here is happiness and what do you want to be good at? Ok. I think sometimes we get distracted at opportunities or chasing the next shiny thing.
Focus on what you're good at. Focus on what you like to do and focus on the things that enable you to have the quality of life because you can get all this other stuff, right. You know, you can get your equipment management, you can make a whole bunch of money. You can go down different pathways and endeavor. But at the end of the day, you're doing it for a reason, you're doing it to build a legacy to enjoy time with family. Don't lose sight of that. That's the most important. Thing. She, I always appreciate the time. Absolutely. Thanks for having me
in the second half of this week's show, an interview timely for Memorial Day Milk Totti is a veteran who has a special gift he shares with others. His goal is not to bring notoriety to himself but rather help others simply tell their story. I think you'll be inspired by this interview and perhaps entertained by Milt's route into his pastime of recording stories. Here's our conversation. You write a lot about veterans, but you haven't shared much with me about what you did in the world. You were in Vietnam. Talk about a little bit of your military background.
Well, I, uh, I was a school teacher in, uh, Minnesota married, we had a child
and I came home from, uh, teaching history class at, uh Duluth Central.
And I told Jen, I want to find out if I could lean men in combat.
And she said, oh, I said, well, I go down to the recruiter and sign up and find out if I can lead men in combat.
And, uh, so the Vietnam War was going on, the hippies were running wild on the streets
and, uh, I decided to give it a shot. I went to basic training $67 a month with a wife and child. And as a private one at Fort Dix
and got to E Six Correction E Five
and I went to O CS, got my commission as a uh transportation officer
went to Vietnam and I was a convoy commander in the central highlands from, to all those uh luxurious uh sites in Vietnam.
I, I never imagined you did this when you already had a wife and child. I described that because that, that had to be difficult to do
all that. Yeah. But, you know, um, a guy kind of grows up with uh certain values and uh all the kids I was going to school with were
totally different. No, maybe I was different than them. I knew I had to serve. I had to find out if I was a leader and I found out very quickly. And, uh, the rest is history. 26 years in the military.
How did? And there's no way to answer this. But how did, what you did in Vietnam then really shape the rest of your life because you were business man of the year and, you know, you work with veterans. It's, it's all a, a web of things. I know.
Yeah. Um,
how did those early years shape me? Well, I, I don't know if it did because, you know, your value systems are already formed at the age of 11 and I just followed those same values the rest of my life.
Then I started to get back into writing veteran oral histories as a different way for the veterans to express what they couldn't tell their families. You'll always hear people say, well, my grandpa or my dad and my uncle would never talk about the military, but they talk to me
because they, they know I've been there, I've done that. I've been in their shoes. So we go and just talk and we never talk about the war. We just talk and, and we develop a relationship and then that relationship allows them to develop the trust in me that they have, that I will record their stories the way they want it without embellishment. And that's the worst thing you can do is embellish.
So once we have the trust relationship, then we talk about their experience in the war and how it shaped them.
The first one of these that you did though was when you were in the military yourself. Right.
No. Well, no, I wrote the first one when I was 13 years old and, uh, the guy was 100 and nine and he was sitting in the, well, I was at home, we didn't have a newspaper and we didn't have a television. But, uh, we had a radio and I heard it on the radio about Albert Wilson being in a hospital in Duluth, Minnesota
and he was the last survivor of the civil war. So after mom and dad went to work, I grabbed a piece of paper and a pencil and I hitchhiked 78 miles to Duluth and I found the hospital, found his room
and they threw everybody out of the room except this kid sitting in the corner. So I stayed and we talked, I took notes, went home, hitchhiked back, wrote a story. And then I asked grandpa to drive me back three weeks later. So I wouldn't get in trouble again.
And I gave Albert his story in his bed. He was sitting in bed smoking a cigar. He was a drummer boy in the civil war and he has a monument that get designating him as the last survivor. Uh, so off and on for 67 years, I've been doing veteran oral histories.
Was it, I guess it was just always fascinating to listen and hear those
stories. Yes. And they're all different. Uh, values are the same, but their stories are different and every story is mesmerizing,
uh whether it be, uh the Korean War, World War One to Vietnam Afghanistan, no matter where,
how did people start to find you and, and know about this because it's not like you're really advertising.
I, I never recruit anybody, never do. Uh, they find me, uh, because somebody knows somebody who knows somebody, I'll get a phone call and, uh, they'll say, let's go have a cup of coffee and the rest is history. And then you know what's really gratifying is I'll be sitting here in my basement
and the phone will ring and I won't know the person. But most of the time it's a very young boy or girl. And uh, he said, are you Uncle Milty? And I said, yeah, uh, well, I want to just tell you I was the grandson or granddaughter of soldier. So, and so, and I just want to tell you, thank you.
You have now done how many of these? A
122? And I've got seven more in the docket right now.
This afternoon, the phone might ring again. Who knows?
Or somebody will walk up the, well, they walked up to my door like, uh, we were in Ohio and, uh, it was Veterans Day and I was tired the next morning, I'd given the day presentation and the doorbell rang. I went there and this fellow standing outside pretty impressive guy. His name was Don and he says my name is Don.
And I drove from Sparta, Wisconsin all night long to be here with you. And I'm gonna stay as long as you want me to so you can write my story. And, uh, he did, he was a Korean War veteran. Uh, he was, uh on pork chop hill, one of three survivors on a Bonzai, uh communist attack
got promoted from P F C to S F C when he came down off of that hill because he showed leadership. And later on, he became the army's number one marksman. Then he went to Vietnam and he was a marks or a sniper and also the director of the sniper school in Vietnam.
But yeah, they'll walk up to the door and not knowing them or,
uh, I've had people in my garage sales or notice my military hat or jacket on and we just start talking and pretty soon they're mesmerized and off. We could go.
How long will you usually spend with a veteran?
Well, the shortest was 67 years or 67 hours. What did I say? Years? That's, that's how many years I've been doing it 67 hours with a guy who was in hospice,
uh in New Hampshire. And, uh, normally between 100 and 200 hours it can get spread out sometimes. But, uh, it does get very intense. Um, there, there's been a lot of them
who had PTSD no longer do because they're able to express themselves and lift the weight off their shoulders
and you do all of this just out of the goodness of wanting to do it. You don't take any money for this,
right? No, I do it all for free. Uh, because the book belongs to them. Uh, many have taken their books and then published and they sell them on the marketplace. I sign away my rights uh to the,
to the work so that it pays their expenses. Then they benefit from that.
People can't see this because it's radio. But you are surrounded by all these stories. What's that mean to you to see all of these stories that you've been a part
of?
Yeah, when I, I walk down, I remember each one, um, and I can tell their stories, uh, without cracking the cover. I remember the individual of the circumstances where they were in life and where they are now.
And, uh, every so often I'll get a phone call, email or Facebook posting and saying hello. I'm still here. So.
Well, remarkable stories. I would, I would ask you, well, which ones are most remarkable? And I'm sure you'd say they're all probably equal. Equally remarkable, aren't they? Yeah.
Yeah, there's, there's several prisoners of war. There's guys who, uh, refused to talk about their combat, uh, for decades but just needed to get it off their shoulders. Others who knew another person who had their book written and wanted to experience the same thing.
Uh, I've had old classmates come forward. I've got, have foreign soldiers.
Um, you need, uh, spies. I got a spy.
We can't talk about that one. And, uh, you know, the, the sad thing is that the World War Two veterans are gonna be all gone. Now, uh, last year I was able to do five. I don't know if I'll get another one. Uh, and you know that in this process too, with the research, I do, I, I usually know more about them than they know about themselves
but just having to find the right words to put it on paper, uh, is always a challenge.
The goal I guess is to continue to do this as long as you can do it.
Yeah. As long as I can do it. Uh, I don't know if I'll hit 100 and 50 but, you know, 100 and 22 right now, you know that the Afghanistan and these new young soldiers that are now civilians, they won't come to the realization
that their oral history is important until they hit about 55 to 65 years of age because they're not willing to talk about it. Not because of the experiences because, but mostly because they're too busy. They got all these other things on their mind. They got their cars, they got their recreation, they got their families, they got to hold the family together, they got the responsibilities and the least thing on their mind,
it was their time in service. But the old timers, you know, they're sitting there in a rocking chair with a cup of coffee and they're remembering things. So now they have the opportunity and it is very rewarding when they're completed. So the young guys that you see out there with the desert storms suits and experiences, they're not ready yet, but it will come and maybe you can start doing this and pick up the ball.
Thanks for listening to this week's show. I hope you have a good Memorial Day weekend and start to the summer season as we reflect on those who have influenced our lives. I appreciate you joining me. Here. I'm Andrew mccray. I'll catch you next time on farming the countryside.
This edition of Farm in the countryside has been brought to you by pivot biop proven 40 os the nitrogen you need. Now on seed, learn more at pivot bio dot com.