View From the Cab

Kriesel, Robinson Come Out Winners in 2015 Bout, Start Prepping for Next Year's Match

Richard Oswald
By  Richard Oswald , DTN Special Correspondent
DTN View From the Cab farmers Lane Robinson and Leon Kriesel. (DTN photo illustration by Nick Scalise)

LANGDON, Mo. (DTN) -- Sunny and wide in the middle, but narrow at both ends: Some might say growing seasons almost resemble a shiny big-buckled trophy belt. Now, with 2015 crops securely buckled up, DTN View From the Cab titleholders Lane Robinson of Cromwell, Indiana, and Leon Kreisel of Gurley, Nebraska, have concluded another winning year.

When readers first met them in the gradually widening days of March, Leon's 4,000-feet-above-sea-level farm was dry and sunny with highs of 80 degrees. Barley planting had commenced. Meanwhile, outside Cromwell, Indiana, Lane's fields were covered in ice pellets, winter wheat lay dormant and rampant avian flu was a threat to the 600,000 Pekin ducks he raises annually.

By mid-April, not much had changed in Leon's Nebraska high country where oats were emerging amid high temperatures in the 70s. But with soil temperatures of 39 to 43 degrees, spring field work still hadn't taken off in Lane's area of Indiana.

And then it started to rain.

"If we'd gotten 6 inches in May and then 3 inches in September, it would have been nicer," Leon told DTN late Sunday. As it was, Leon has logged 25.66 inches of rain for the year. "I think by the time we get to January, it will be close to twice the normal average."

Lane's spring was almost the opposite -- light rains but cool. Corn planting was nearly wrapped up in early May, but due to unseasonably cool temperatures, very little corn seed made it into the ground in April. May was better. June turned out wetter. Soybean planting wound down early in the month, with most soybean plants emerged by mid-June. More rain in July left Lane's Indiana farm "105% saturated," and delayed millet planting in the Nebraska Panhandle where Leon grows and sells certified seed from about 3,000 acres.

Weather turned dryer into August, crops matured, and other than a few delays, harvest was uneventful. And yields?

Lane goes first: "Just average, we've certainly done better. Our total overall average on corn is 181 bushels per acre, irrigated and dry land combined," he said. That's more than 10 bpa below last year's overall average of 192.5.

What about soybeans? "We ended up just a hair over 61 bpa ... 61.1 or 61.2," Lane said. But where last year's corn was better, 2015 soybeans bested 2014's 57.7 average by about 3.5 bushels per acre.

Did the ability to irrigate pay this year?

"In corn we certainly couldn't see it. Our quarter section of irrigated soybeans we were able to pour the water to -- that was good for 4 or 5 bushels -- but on corn, no. It was all about soil type. The lighter the soil, the better the yield," Lane said.

Lane raises 600,000 Pekin ducks each year that generate about 3 million gallons of manure. Used as fertilizer for row crops, manure has obvious benefits, and a downside. "When you use as much manure as we do, obviously you're going to get some compaction. Wet ground this spring didn't help the situation. Every time we have an El Nino year, we relearn the old adage 'drainage pays.' You can make more money putting water in the ground than putting water on the ground. You can see every tile line on the yield map."

More tiling is part of the future, especially to replace a ditch on a recently acquired farm. "It is somewhat unusual to see an open ditch on a farm. We will close it in and replace it with a culvert. Ditches are just a lot of trouble with scrub trees and mowing," Lane said.

The duck farm will grow in future years. Additional grow-out barns are a possibility with further automation to aid long-distance management "so I can sit in Florida and watch/change environmental issues on my want list." Duck eggs offer niche market opportunity. "We think we could be a major player in that game with our scale."

With corn and soybean prices well off recent highs, cost-cutting has become the name of the game. "I'm already looking down at the cost accounting on (individual) fields. We've probably been a little too generous with our suppliers. We can probably save about $30 per acre by eliminating some add-ons ... TraFix Zn for $7, ammonium thiosulfate $5, Axilo BMZ, that's 13 bucks an acre, N stabilizers another $5. I think there's several places we could cut and will be cutting next year."

Lane's greatest future challenge may be marketing. "I use crop insurance as part of my marketing plan. Potential for a revenue payment on crop insurance will be extremely tough." Drought is his biggest threat to production. "I consider my pivot (irrigator) my insurance. We have contracted some corn already for next year. We've got some July 2017 HTA (hedge to arrive) contracts out there for June delivery at $4.40 and sold December 2016 calls against those same bushels for another 20 cents. That covers about one-fourth of my production. I wish I had more. The situation is worse for beans than corn if Brazil comes out with another top-notch crop."

Growing crops with conventional genetics has already paid off in a discriminating market. "We're going to continue looking for non-GMO opportunities to gain premiums. This was the first time we've done conventional soybeans in 15 years. We were pleasantly surprised to find there was a combination of herbicides, all on a pretty affordable basis." Herbicide costs including three trips over the field were $95 per acre. Seed cost $57 per acre. By the time Lane factored in other costs such as harvesting and trucking, -- even expensing his manure -- he had total costs of $388 per acre. With a selling price of $12.50 per bushel, his gross income was $775 per acre.

Forward selling is complicated by not knowing exactly how much to sell. "I'm actually a little embarrassed to admit I still have 20,000 bushels of 2015 corn to sell." But, of course, weather plays a big part in production of any crop. For clues to that, Lane follows one well-known Midwestern weather and crops prognosticator, Elwynn Taylor of Iowa State University. "He basically pegs the yield before you even plant. How he does that is just mind blowing."

And Lane's prediction for 2016 weather and crops? "We've had our El Nino year. I'm not overly worried about the drought cycle," he said.

Meanwhile, in Nebraska high country, as Leon put a cap on the year for DTN, 2 inches of fresh snow had just capped his fields. And he put food on the table. "I got my exercise this morning. I killed a 4-by-5 (9-point) mule deer. That was rewarding for me," he told DTN.

Most 2015 odd jobs are complete. "All the fertilizing is done (on winter wheat) the painters are done painting the (grain) leg, the irrigation well is done, and we've started processing oat seed for next spring" he said.

Leon's farm is actually two businesses in one. There's the farming side and a seed side. Labor requirements running both operations mean extra help. "We got a new employee in July. He came to us (looking for a job). I think we really got lucky."

Leon produces oats, wheat, barley and millet. Most or all the grain he raises is sold and used as certified seed. Pricing is based on the combination of the underlying commodity and seed demand. "Our goal is to produce a high-quality product at a fair and reasonable price," he said.

Price volatility is evident in prices Leon has witnessed over the years. Proso millet, used as bird feed, has swung from a high of $35 to a low of $3 per cwt. At times, brokers acting as buying agents for the bird seed industry push prices lower to gauge farmer reaction. If prices go too low, do supply and demand rules kick in? "You can't grow proso for $2.50," Leon told DTN.

"We try to watch it and guess what the real-world price is. We get a little premium, but it's also more expensive to grow. Looking at averages for seed, we're not the highest and we're not the lowest. Everybody asks how do we set the price of seed. In the certified seed industry, we're making a quality product."

Compared to another part of the seed industry, hybrid corn, certified seed prices are much lower and premiums seem reasonable to Leon's clientele. "Customers do understand what we're doing. They come here with a truck and we put the clean seed on," he said.

Crop makeup on Leon's farm for 2016 will be about the same as last year. "Generally, we try to keep about the same amount to satisfy our customers." He's added another farm for proso millet. This year's milo turned out well, yielding more than 100 bushels per acre. He'll grow more next year. "I don't think we'll have any new crops, but I might experiment with food-grade proso millet."

The Nebraska Panhandle growing season is shorter than most areas of the Corn Belt, with annual rainfall typically no more than 16 inches. Short-season grain sorghum and corn might only yield 100 bushels per acre in a good year. Current prices have raised a good question. "The thing I see from my customers is no one knows what to raise next year. Right now, milo won't pay for itself. I hope the Chinese market comes back," Leon said.

A nearby land auction is slated to happen soon. Will it reveal a change in price trends? "We don't have the out-of-state investors here yet. It will be interesting to see how that goes. Real-estate investment trusts say prices down 10% are a good deal. Farmers say 'I think it should be down 40%.'"

For cash rent farmers, rates are influenced by land and crop values and competitive bidding. But even if land prices decline, it shouldn't affect rental rates around Leon's place. That's because crop shares dominate the rental market there.

"I think everybody should have stayed with that. I hope here we don't go to cash rent. If it gets dry, things can get real bad," he said.

***

This concludes DTN View From the Cab for 2015. DTN wishes to express our profound gratitude and appreciation to Lane and Leon for their support, cooperation and willingness to share their experiences with DTN readers everywhere.

If you would like to share your View From the Cab in 2016, contact DTN Managing Editor Cheri Zagurski at cheri.zagurski@dtn.com. Please include contact information, crops and livestock, and a few details about the view from your cab.

Richard Oswald can be contacted at talk@dtn.com

Follow Richard Oswald on Twitter @RRoswald

(AG/SK)

Richard Oswald