View From the Cab
Farmers Face Hard Choices When Crops Don't Pay
DECATUR, Ill. (DTN) -- Making hay while the sun shines typically means making good use of time or the most of an opportunity. That's exactly why Luke Garrabrant won't be making hay after this growing season ends.
Labor availability has been at a premium when it has been time to make the small square bales he's been selling locally to horse farms. Weather hasn't cooperated this year, either. The bottom line is hay is not cash flowing as an enterprise for his Johnstown, Ohio, operation.
Colorado farmer Marc Arnusch recently made a similar decision to discontinue his certified seed wheat business. "We built our seed business from the ground up, starting in 1998, and had developed good customers across many states. But the metrics we use to evaluate our farm business showed seed wheat was not paying its way," he said. "It is time to pivot."
That's how Arnusch, who farms near Keenesburg in Prospect Valley, refers to the decision to exit an enterprise. And he said making that decision to pivot is notoriously difficult for farmers conditioned to think that simply working harder will turn things around.
Arnusch and Garrabrant are participating in DTN's View From the Cab project, a diary-like report during the growing season. The farmers volunteer their time and expertise to provide crop reports and insights into the business of farming and other rural topics. This is the 15th report of the season.
This week they discuss some of their thoughts about switching up business plans for 2023. Weather continues to gather attention as Arnusch's year-to-date precipitation has been slightly more than 7 inches compared to the 30-inches of rain that has fallen for Garrabrant so far this year. This week both men have been in the field trying to gauge crop conditions. Read on to learn more.
MARC ARNUSCH: KEENESBURG, COLORADO
As of early August, Arnusch Farms had recorded 7.4 inches of rain for the year. That is not a typo. "We're showing zero accumulation for the past 30 days," Arnusch said. "We desperately need a drink."
This week reporters from Denver's NBC affiliate visited the farm to learn about all things ag-related. Among the topics was the precious resource of water and how irrigation helps but is also a limited resource.
Arnusch's son, Brett, was preparing to take a second cutting of alfalfa this week. "He's on a limited water supply, but so far it looks like this cutting is going to be spectacular.
"We need a little bit of relief in terms of rain, even on those farms where we have a water supply," he said. "We're having a challenge getting across our acres in a timely fashion (with irrigation water). We're starting to lose sub-moisture on some irrigated fields. We're also needing moisture for our fall seeded crops, specifically winter barley and some commodity wheat that will likely be drilled in September."
Keenesburg, which sits about 20 miles from the Denver airport, has averaged about 12 inches of rain per year since 2000, noted DTN ag meteorologist John Baranick. Through the end of July, the total there sits at 7.11 inches – about an inch and a half short of normal for this time of year.
"The 'wet' season has already passed and showers are typically harder to come by now through the end of the year," Barnack noted. "A front will be coming through this weekend with chances for showers on Sunday and Monday, but it will be drier after that for the rest of the week with an outside shot at showers next weekend. The front will bring some brief heat relief, but temperatures are set to rise well into the 90s again by midweek. The heat is likely to continue for the rest of the month," he said.
Explaining those conditions and why it matters to urban television viewers is something Arnusch enjoys and appreciates. "There are so many misconceptions about agriculture, especially in this state. There are a lot of people trying to redefine agriculture –what it is we do and how we do it.
"We must demonstrate to others that no one takes care of the land better than the farmer. We are the experts in this field, not someone four states away," he said. "Any opportunity we get to tell our story, we do it."
Communications training offered through agriculture leadership programs helped him become more comfortable telling that story. "The more transparent we can be with the consumer and with voters, the better off agriculture will always be," he said.
The television crews were also getting some lessons in other production challenges, such as sugarcane aphids. This is the first year for growing milo or grain sorghum on the farm. "We've been aggressively scouting for aphids and so far, we haven't found them, or rather, perhaps they haven't found us," Arnusch said.
Farmers are often emotionally attached to the land, the crop, equipment, cultural practices and even their farming region. Those strong connections are some of the reasons Arnusch believes it is often hard to shutter portions of a farm business.
"But I've learned over time that we have to set goals for our enterprises and have metrics to measure whether we are achieving those goals," he said. Earlier this summer, the farm team gathered to look at those numbers and voted to discontinue selling seed wheat to concentrate on a more profitable barley seed business.
The hardest part of the decision for Arnusch was informing customers. The farm had retail, wholesale and direct-to-farmer business and many of those purchasers relied on the farm for agronomic and placement recommendations.
"We are working with each of our customers to make sure they have a soft landing when it comes to their next seed provider," Arnusch said. "We are helping them find their seed provider and doing everything we can to treat them as friends and neighbors and not strictly a business transaction.
"We love the seed business. We will continue to grow the barley seed side of our business. It's a business that is growing quickly, but one where we have much more control of pricing," he added.
"In seed wheat, we were at the mercy of competitors willing to drive prices downward. We had to chase those prices and the margin just wasn't there anymore," he explained.
Perhaps it is easier to see those forces since he has experienced them before, he added. Arnusch ran a produce shed for nearly a decade out of Greeley, Colorado. At one time, the farm grew, packaged and shipped onions to over 20 states and several foreign countries. The family chose to terminate that business when labor became difficult to find and food safety compliance became cost prohibitive. The final nail was when a group of onion growers from another state created a competitive shipping company using rail.
"Within a year they had our markets in Chicago and proceeded to take our markets in New York and Boston. It totally caught us flat-footed," he recalled. "I couldn't get to a position where I could show the end user a value proposition."
It was a tough lesson, but Arnusch said it taught him to constantly measure and use SWOT (strength, weaknesses, opportunities and threats) analysis related to business and project planning. "I learned to always see the world as one zero larger.
"Too often in my farming career, I had blinders on. I thought if you worked really hard to put out a good product it will sell. That is false," he said.
"Alliances, networking and making sure you take risk off the table is more important than producing a great product. I learned that in the produce industry," he said.
LUKE GARRABRANT: JOHNSTOWN, OHIO
He doesn't want to jinx things, but the weather Gods have been good to Luke Garrabrant lately.
The Columbus area typically sees quite a bit of rain during a year. On average, the Columbus International Airport, which is 15 miles away from Johnstown, has averaged 43 inches of rain per year since 2000. Through the end of July, the airport has received over 33 inches of rain and is on pace to end the year with 50 inches if the rest of the year hits a normal pace, noted John Baranick, DTN's ag meteorologist.
"Precipitation also tends to wane now that temperatures are falling, but not as dramatically as it does in Colorado," Baranick said. "A front stalled out in the region this weekend and another one moving through early in the week will likely add to the totals. The second front will bring temperatures down a bit but right about 80 degrees for highs a couple of days before temperatures warm back up into the mid-80s by the end of the week, making it a bit more gentle to the region than farther west."
Garrabrant feels blessed. "Yes, we got some crop in late, but we made it through pollination without the hot temps. I swear you can almost watch it grow right before your eyes," he said.
Those mid-80s temperatures have made it easier to pull ears to do some yield checks. "I'm counting 18 kernels around for average," he said. "I know the crop isn't made yet, but we keep getting rains like this and we're going to have a decent year."
Garrabrant was headed out to finish up some postemergence spraying on soybeans this past week. "I can't even complain about weed control. At this point, I'm just doing a little clean up," he said.
Prospective yield on soybeans is harder to read this time of year since they are still flowering. "One thing I've noticed here is that some of the beans seem short," he said, noting, however, that some of his fields were planted as late as June 20.
"If we keep getting rains, I think the potential is there for even those late beans to do alright," he said. A trip through southern Ohio this past week made him realize how lucky he is though. "It's a lot rougher looking in that part of the state," he noted.
Garrabrant has had a week to reflect on his decision to discontinue the haying business and feels more confident about the decision with each passing day.
"It might sound strange, but my biggest fear as a young farmer was the rumors it could start. People see you have equipment for sale and all kinds of things get said," he said. He was also careful to work through all the details with landowners before he made the announcement about discontinuing the hay venture.
"This was a purely financial decision based on what's best for my business now and into the future," he said. Hay has been a good business for his family in the past, but local competition has cut into the pricing structure. He had limited storage for hay and a tarping system purchased to ease that squeeze didn't work as planned.
Available labor was another bottleneck, which was made more evident when spring operations backed up because of weather issues. "Early corn was needing side dressed when I was still trying to finish planting. First cutting hay was needing made when that later corn was getting side dressed.
"As I was making hay, beans were needing to be post sprayed and wheat needed cut," he recalled. "I barely had the manpower to make everything happen and then, weather compounded the issue. By trimming the hay business, we can do a better job on crops.
"I'm really looking forward to doing more extensive tissue testing in row crops next year. I want to have more boots on the ground in the field all season long," he added.
Ironically, his wife, Paige, went to a bridal party this past weekend which featured goat yoga as an activity. She became enamored with the critters. "I told her if she needs hay for goats, we can buy it cheaper than we can make it right now," Garrabrant joked.
"I always had the mindset –- and maybe still do –- that diversity was a good thing in farming. But my hope is that by becoming more efficient, other doors will open that make better business sense for me," he said.
Pamela Smith can be reached at email@example.com
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