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High Tech, Low Cost

November 27, 2013
By: Ed Clark, Top Producer Business and Issues Editor
high tech low cost
A natural partnership between these Illinois farmers increases efficiency and cuts costs. From left: Ben Dolan, Brendan Dolan, Robb Klinger and Aron Carlson.  
 
 

Two Illinois farm entities pool their resources to stay on the cutting edge

Rooted in the millennial old concept of bartering is a new formula for success—trading custom work. You do this for me, and I’ll do this for you. This strategy has mobilized four northern Illinois farmers, allowing them to adopt the latest technology and keep debt levels low, all while adding sizeable increases to their land base.

"You could call what we’ve done a small co-op," says Aron Carlson, who grows corn, soybeans and wheat with his partner, Brendan Dolan.

Carlson and Dolan’s entity is known as CAD. They barter with Dolan and Klinger (DAK), which is comprised of Robb Klinger and Ben Dolan (Brendan’s brother).

The four partners believe that being early adopters of technology, keeping debt low and maintaining growth gives them a competitive advantage. Carlson says the key to accomplishing this triad of goals is dividing up ownership, sharing labor and equipment and maximizing machinery use. They put three to four times more hours per year on equipment than the average farmer.

"That keeps our per-acre costs low," Carlson says. "The downside is our equipment has more wear and tear."

map location

The two entities farm nearly 12,000 acres in northern Illinois and southern Wisconsin with 6,300 acres leased, a small percentage owned and the rest custom worked for other farmers.


"We adopted variable-rate planting as soon as it was introduced about 10 years ago and variable-rate fertilizer when it hit the market," says Carlson, who serves as an Illinois Corn Growers Association board member. "That lowered our costs."

Keeping costs down involves more than just sharing and using equipment efficiently. The two entities also pool their purchase of inputs.

"Each year, we bid out our fertilizer, chemical and other input needs," Carlson explains. "Because we represent high volume, we get lower unit prices. It’s cheaper for a supplier to deal with us."

Busy Boys. Even though the four producers are near or at age 40, they are still referred to as

"the boys" by farmers at the local Winnebago coffee shop. "They ask, ‘What are the boys up to?’" Carlson says, smiling.

Their partnership began in 2007. At that time, DAK had already been operating for 10 years. Since then, the two entities have built their land base to nearly 12,000 acres spanning northern Illinois and southern Wisconsin. Of that, 6,300 acres are leased by DAK, a small percentage is owned and they custom work the remaining acres for other farmers.

The concept for this arrangement didn’t spring out of a textbook or come from a consultant. In 2007, CAD owned about 300 acres and was equipped with a four-wheel drive tractor, a second tractor, a planter, a drill, a vertical piece of equipment and a liquid applicator. DAK had about 5,000 acres, but when a chunk of land came up for rent, it wasn’t in the budget for DAK to take it on.

"It just struck us that working together was right," says DAK’s Ben Dolan. Initially, CAD was in a better position to provide labor, with DAK owning most of the equipment.

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FEATURED IN: Top Producer - December 2013

 
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