By Greg Vincent
Farmers who achieve success by aggressively growing their business and reaching 10,000 acres or more are often looked upon with scrutiny. It’s as if they somehow are upsetting the foundation that rural America is built upon. They’re called "megafarmers" by most, and the less endearing "BTOs" (big-time operators) by others.
"It’s what happens to people who find success; they get tagged," says Danny Klinefelter, an agricultural economist with Texas AgriLife Extension Service and founder of The Executive Program for Agricultural Producers (TEPAP).
Klinefelter, who serves on the Top Producer of the Year judging panel, says that scrutiny is not always justified.
"Many people who label these producers have lost ground to the bigger guys. That’s understandable. But the fact is the farmers who have grown are often, though not always, better business managers and more profitable. That’s why they can bid more for ground, buy cheaper inputs and afford to take the risks that others can’t. It’s not always fair to put the label on them of being less ethical."
Meet Donny DeLine: BTO, nice guy, protector of his reputation and 2010 Top Producer of the Year.
Many of the attributes that led to DeLine earning the award may seem contradictory. Since he started farming full-time in 1998, his farm has increased nearly tenfold from his original 2,000 acres near his home in Charleston, Mo. Today DeLine’s operation spreads across four states in the mid-South, through a vision for growth that’s built on terms that are clear and definitive.
"I will never take ground from another farmer. The ground I farm has either been offered to me by the landowner or it has been available because the previous farmer no
longer farms it," DeLine says.
"I like to sleep at night. I don’t want a reputation as somebody who grabs up land just because it’s there. I don’t want to grow in that manner," he adds.
DeLine has even been known to turn away ground near his home in Charleston for fear that he would be labeled a land grabber. Despite his willingness to forgo new ground, his operation’s ability to grow has not slowed.
A Spin on Crop Share. Once DeLine secures the ground for his operation, however, he staunchly defends it by continuing to earn the trust and respect of his landowners. He says he treats his landowners like family and works to maintain those key relationships.
"We have a good personal relationship with all of our landlords," DeLine says. "They can call me for anything they need. I consider them friends and family. They are my
To provide a good return on his land, DeLine has developed a unique approach to rental agreements. While some of the land he farms is in cash-rent agreements, he has put a new spin on traditional crop-share agreements with many landlords.
Traditional crop-share leases in the mid-South are designed so two-thirds of the expenses and returns go to the farmer and one-third goes to the landlords. DeLine opts for a 75%/25% crop-share lease, where he pays all expenses and receives 75% of the production. The landowner pays no operating expenses but receives 25% of the returns.
Klinefelter says this type of arrangement stood out to him as he reviewed DeLine’s application and evaluated the interviews of the finalists.
"It mitigates his risk, and it makes him be a better farmer," Klinefelter says. "In cash-rent situations, the risk is all on the farmer. Many landowners in straight cash-rent situations cash their checks, and they have no risk if the farmer doesn’t produce. As long as the farmer isn’t mining their land, they’re not out anything."
In his arrangement, however, DeLine must provide return to keep the landowner interested in continuing the agreement. "If he doesn’t give them return, they can take it away," Klinefelter adds.
This type of crop-share arrangement, DeLine explains, is more landowner-friendly because the landowner doesn’t have to worry about paying bills or making sure he is being charged a fair price for his inputs. It also has cut down on administrative expenses for DeLine. Once he shows the landlord on paper what his return is on one-third and two-thirds agreements with all the inputs pulled out, and that it is always within a dollar or two per acre return, it really isn’t a hard sell. "There’s a lot less paperwork involved for both parties," he says.
Finances First. With a tenfold acreage increase in 12 years, management challenges are not unfamiliar to DeLine. Part of what makes his system feasible is the rental arrangements that limit his risks. It requires steadfast financial management.
"Donny spends a lot of time putting together a financial plan," says his banker, Bennie Bruenderman, president and CEO of Citizens Bank in Charleston, Mo. "This includes preparing balance sheets and cash flows and figuring out how different cropping and marketing plans affect them. Once he comes up with his final plan, he sticks with it."
Bruenderman also attributes DeLine’s success to his management of overhead. "He keeps his equipment investment at a very efficient level for the amount of acres that he covers," Bruenderman says.
Bringing Back Dad. DeLine, who operates much like a CEO, has hired a full-time office manager to run the day-to-day business operations and a full-time manager for his operations in Arkansas. In another nontraditional turn, DeLine brought in his father, a retired cooperative manager and also a landlord to his son, to manage input purchases and production for the farm.
While DeLine is quick to credit all of his 13 employees for his success, he says that having his father involved in the operation instills the confidence he needs to spread beyond the local Charleston area. With Dad around, he knows things are in good hands when he’s gone.
"I think I’m probably one of the luckiest guys in the world because I’m able to build up something that I will someday pass down to my kids," DeLine says. "I appreciate every person involved in the farm operation because there are a lot more people involved than just me: from my banker, who loaned me money on my first 240 acres, to my landlords, who took a chance with us when we started out, all the way to the family and neighbors and the employees who are involved in the operation."
DeLine Farms At a Glance
Family: Donny DeLine is the fifth generation of his family to farm the home farm in Charleston, Mo. His uncle, Smith DeLine, retired from farming in 1998 and turned the entire operation over to him. Together with his wife, Christi, he has increased acreage and brought in his father, Bill, to help manage input purchases and day-to-day operations in Missouri. Donny and Christi have two children: Larkin, 8, and Peyton, 6.
The Next Generation: If current interest is any indication, Peyton will be the sixth generation to farm DeLine Farms. Peyton’s Missouri farm is based in the family’s playroom, the Tennessee farm is in the living room and the Arkansas farm is headquartered under the dining room table. The Illinois farm is located on the upper floor of the home.
Windshield Time: A tenfold increase in acreage means DeLine spends countless hours on the road between his Charleston headquarters and his farms in Illinois, Tennessee and Arkansas. This past year, he put 60,000 miles on his truck.
Learn From Those Who Know: A lot of the landlords DeLine works with today also farmed when he started farming. "I leaned on them for advice," he says. "They’ve been there, done that and I tried to learn something from them every day. I don’t know it all and I feel like the veteran farmers are an asset, as far as advice and what to do and what not to do."
- September 2010