Editor's Note: In late 2012, Stamp Farms and its related businesses filed for bankruptcy. Federal prosecutors have filed indictments and are continuing to look for assets--grain, cash, crops, farm equipment and more--that may have been concealed from the bankruptcy court. Click here for our ongoing coverage.
Top priority is "filling in the gaps"
You might say Mike Stamp has a DIY attitude. "I’ve always wanted to be self-sufficient," says the Decatur, Mich., corn and soybean farmer. "If we need to build something, we can make whatever we need to make. We can do whatever we need to do."
This motivation has driven innovation and growth for Stamp, which is an important part of why he was chosen as a 2012 Top Producer of the Year finalist.
His accomplishments have literally altered the Decatur skyline, with a set of bins that can collectively hold 4.2 million bushels of grain. He ships the vast majority of that grain via rail, and has laid nearly 10,000 feet of track to connect his farm to the main line. With more than 43,000 acres, he employs 78 people during peak season.
Not bad for someone who’s only been farming for 16 years.
Stamp started with just $1,000 left in the bank after he purchased 240 acres and began custom farming on several hundred more acres. Growth happened sporadically but steadily from there. This year, more than $70 million worth of grain is expected to move through his operation.
Hidden Profits. The purchase of Northstar Grain LLC in 2007 really put things in motion. Upon buying the company, Stamp set about boosting bin capacity from 150,000 bu. to 400,000 bu. For Stamp, it was merely a strategic move to allow him to store more of his grain. But a hidden asset soon revealed itself. The remnants of an old railroad spur, nearly forgotten and half-covered in weeds, lay directly behind the mill.
"None of it was functional," Stamp says. "It was there, but we would have to rebuild all of it."
A rebuild would be costly—more than $4 million, in fact—but Stamp saw an opportunity others might have written off.
"I’m always looking at the bigger picture," he says. "What are the hidden costs and profits? The rail gives us a 20¢ to 40¢ margin advantage, and that pays back the initial cost pretty quickly."
"If we grow, great. If we
don’t, great. We don’t need
to grow, but we will if we
The move was just one of many that has kept Stamp on good terms with his bankers. His bankers balked initially at the expense of Northstar and the rail spur expansion, so Stamp, true to his DIY nature, began the project using his own capital. "We had to just build part of it with our own money to show the banks the returns—it was a little risky, but it paid off," he says.
"The volatility of operating a business today is largely considered a risk," says Steve Falkenstein,
executive account manager with The Andersons, Inc. "Mike views it as opportunity. While I admire his ability to turn vision into reality, his drive to constantly have a vision for the future
separates him from his competition."
Building Autonomy. The new rail put Stamp one big step closer to his goal of self-sufficiency. He now imports about 95% of his fertilizer and exports about 95% of his grain via rail. Most heads to the East Coast, but quite a bit also ends up in the Southeast for livestock feeders. The purchase of Northstar Grain and the rail improvements moved the needle for the whole community. Stamp says Northstar Grain is a more competitive grain buyer and crop input supplier for local farmers.
Stamp’s work-force philosophy earns him an additional level of autonomy. He maintains an open-minded approach when considering new hires. Above all, he seeks out multi-taskers. For instance, one employee doubles as a mechanic and another is an able electrician. An interesting
tidbit: More than half of his employees don’t have an agricultural background—and he prefers it that way.
"The best employees are the ones who have worked in other industries," he says. "Probably 60% of my employees don’t have a farm background, but they came from the asphalt or aggregate or construction industries, so they understand the value of hard work. Our guys are dedicated, talented and diversified."
Employees are a key component in what Stamp calls "full-circle farming."
"My original idea when all of this started was to control everything in a circle of production—from seed, to chemistry, to fertilizer, to grain, to land," he says. "Everything we try to do lives in that circle, and we’re always looking at how to do something to fill in the gaps in our circle."
Vertical integration also allows Stamp to eliminate more middlemen. He is still sometimes taken aback by how many brokers intercept certain crop inputs on their way to the farmer.
"We recently bought a load of potash, and I saw that five brokers had touched it," he says. "I don’t know how much they each made, but they weren’t just covering their costs, they were making a profit. Most farmers don’t care, but I decided it was my business to care. Even in instances where you’re saving only a couple of dollars per acre, it ends up being a lot of money when you extrapolate it over thousands of acres."
Connecting Back. Self-sufficiency has not turned Stamp into an island. Although he has not received any financial help from family members or business partners, he does lean on two older farmers for advice. Each have shared farmsaving wisdom through the years. One convinced him to install pivot irrigation on as much ground as he could. Stamp took heed and has about 300 center pivots operating. Suffering through this droughtplagued summer gave him all the convincing he’ll ever need that it was a smart recommendation.
"It’s just a great insurance policy," he says. "Our irrigated ground still yielded between 180 and 220 bu., while nonirrigated ground in this area only averaged zero to 50 bu."
Falkenstein says he is impressed with Stamp’s ability to maintain healthy relationships with a variety of entities, despite making changes through the years. As Stamp jokes, "I outgrew a few bankers, and I probably scared another few off." Stamp has also walked the extra mile to build stronger bonds with his landlords.
"Year after year, I would knock on the doors of prospective landlords," he says. "Whether they turned me away or not, I worked on overcoming any doubts they had about me as a farmer and an entrepreneur." That extra effort paid dividends by helping to establish his credibility.
"Mike has a unique trait of creating and maintaining win-win relationships with landlords, bankers and suppliers," Falkenstein says. "He respects the fact that he cannot be successful without them."
Another former lender of Stamp’s, Jeff Harts, also applauds his networking prowess.
"Mike’s ability and insight to create a network of professional associates has and will continue to bring him success," he says. "Installing irrigation on rented farms showed landlords his commitment to partnering and creating mutual value. Additionally, installing irrigation to reduce yield risk and the long-term leases made his lenders more confident and receptive to Mike’s goals and ambitions to continue the growth in his operation."
Yet for someone whose farm has grown exponentially throughout his career, Stamp can be quite laissez-faire about his approach.
"If we grow, great," he says. "If we don’t, great. We don’t need to grow, but we will if we see opportunities."
A little luck doesn’t hurt, either, Stamp adds. "The best plans with the wrong luck still get smoked," he says.
Stamp Farms At a Glance
It’s too early to tell if their children
will grow up to be farmers, but Mike
and Melissa Stamp want to build
a farm worth passing down.
Family: Mike and his wife, Melissa, have two children, Karleigh, 3, and Brock, 1. Melissa is a critical asset, multi-tasking as office manager, community relations liaison, advertising/PR coordinator and more.
Ag Education: The Stamps are firm believers in the value of agriculture education in the community. They both volunteer at the local 4-H chapter and at the Van Buren County Fair. Melissa also volunteers through the Ag in the Classroom program. "Many children don’t realize their food doesn’t come from a grocery store," she says. "I think a lot of their parents might not actually realize it either, so this can be a good educational opportunity for the entire family."
Technology: Mike also believes in on-farm technology. All of his acres receive variable-rate planting and fertilizer applications. Some of his acres are set aside as test plots so his agronomists can test factors such as nitrogen application timing, plant population and fungicide applications. This allows them to make the best production recommendations. Some of the newer technologies Mike is trying this year include telematics/fleet management and remotely controlling his center pivots.
Finance: Mike explains: "We have outgrown many banks in a short period of time. It has been a struggle to find financial institutions that understand this rapid growth. Through the use of outside accountants and reviewed financial statements, I’ve worked to solidify our financials and understand our costs to better communicate and work with larger banking institutions."
In less than a decade, this 37-year-old Michigan farmer grew his operation from a single semi to 40,000 acres.
Who will be the next Top Producer of the Year?
It could be you! The 2013 contest is now open. For more information, visit www.TopProducerOnline.com.