Top Producer Seminar breaks all records
The annual Top Producer Seminar shattered all of its previous records for both attendance and sponsorship. The three-day event held in Chicago attracted 877 of the nation’s largest producers, representing a total of 4.3 million acres in 25 states and two Canadian provinces. Including speakers, representatives of the event’s 28 sponsors and staff, total attendance was more than 1,200.
Young farmers 35 and under kicked off the event with the Tomorrow’s Top Producer program, and the week was capped with the Top Producer of the Year award banquet.
This year’s seminar theme, "Farming in the Fast Lane," featured more than 40 educational sessions to help producers hone their financial, marketing and management skills and deal with today’s volatile farm economy.
The excerpts on the following pages are highlights from this year’s exciting event. Mark your calendar now for the next Top Producer Seminar, Jan. 30 through Feb. 1, 2013.
Premier sponsors of the 2012 Top Producer Seminar were: AgriGold; AgriLogic/The Assure Group; Agrium; Agrotain; Apache Sprayers; Asgrow/DeKalb; BASF; Bayer CropScience; Cargill; Challenger; Dow AgroSciences brands Enlist, Instinct, Mycogen and SureStart; Firestone; Pioneer Hi-Bred; Rabo AgriFinance; SFP; Syngenta; and Top Third Ag Marketing. Co-sponsors were: Advance Trading; Farmers Feeding the World; Integris; Kennedy and Coe; Michelin; Novozymes; Soybean Premiums; and Water Street Solutions.
Potato Farmer Wins Top Producer of the Year
Top Producer chose three finalists for their entrepreneurship and excellence in the business of farming for its annual Top Producer of the Year award, presented by Challenger and co-sponsored by Asgrow/DeKalb, Bayer CropScience and SFP. The exclusive honor for top producers in agriculture was given in Chicago on Feb. 2.
Gregg Halverson of Black Gold Farms, based in North Dakota, won the 2012 award. Halverson’s grandfather planted his first potatoes in 1928 on what is now the family farm near Forest River, N.D. His idea was to sell seed to other growers in the emerging potato business in the Red River Valley. Twenty years later, Gregg’s father converted the business to a table-stock operation. In 1959, the family grew its first potatoes for the potato chip trade and the french-fried potato market.
Today, under Gregg’s leadership, Black Gold Farms is the largest fresh-crop producer of chip potatoes in the U.S.
The company farms more than 20,000 acres with 11 individual farms in 11 states, from Texas to Florida and up into Indiana and Missouri. The company mostly grows potatoes for chips, but also produces table-stock potatoes, sweet potatoes and peanuts.
Halverson has taken a successful operation that was passed on to him and grown it to become even more successful. His hard-work ethic continues in his three children, who are actively involved in the business: John is the vice president of operations; Eric is the vice president of technology and will eventually take over as CEO; and Leah is the marketing specialist for Black Gold Farms.
You can read more about Halverson in an upcoming issue of Top Producer magazine.
The Economic Wild Cards in Play
When trying to make economic predictions, you have to plan for the unknown. "Every year is filled with surprises," said Vince Malanga of LaSalle Economics, who headlined the Wednesday afternoon general session titled "What Is Ahead for Agriculture in 2012?" He said that the three wild cards in 2012 will be:
Oil prices: "Demand around the world is slowing down," he said. He expects oil prices to stay around current levels. But oil prices can always fluctuate, since oil comes from unstable parts of the world.
Election year: Because there is an incumbent running for re-election, you have to be ready for surprises to help him protect his electability, Malanga said.
Stock market: "The stock market is a great barometer of public opinion," he said. If history is any guide, he added, when you have a good first week of January in the stock market, the month of January is a good month, which was the case this year. Additionally, historical analysis shows that if January is up in the stock market, the year tends to be good overall.
With these uncertainties, Malanga predicts 2012 will be the year of paralysis. "The global deleveraging process that began in 2008 is still with us. That process has been highlighted by spotty and lethargic growth in the U.S."
He predicts, with all these factors in play, a global GDP rate of 2.5% at best. Malanga said the upshot of this situation is that inflation can continue to be pushed out further into the future.
The U.S. has become much more competitive on a global basis, he added, because:
- productivity has been strong;
- wage growth has been very tepid, which is making U.S. labor costs more competitive on a global basis; and,
- the exchange rate has been moving in favor of the U.S.
When the U.S. becomes more competitive, Malanga said, more goods will be produced in the U.S. again, as opposed to the kind of outsourcing that has been so rampant during the past several years.
No Certainty that Farm Bill Will Pass This Year
Speakers in the policy panel discussion were far from certain that a new farm bill will be passed this year.
Michael Dykes, director of global affairs for Monsanto, believes getting a farm bill passed this year will be difficult. For one thing, Congress is facing a very short session of fewer than 100 days. And with "open" rules in the House of Representatives that do not limit the number of amendments that can be offered by any member, the debate could go on for some time.
"It’s not at all clear that what you have coming out of the House Ag Committee will be the bill you get coming out the other end of the House debate," he said.
"I’m not optimistic we will have a farm bill this year, but I hope I’m wrong," added Wayne Myers, director of ag programs for Kennedy and Coe. "A farm bill will allow you to do your business planning. In any event, you still need to work your strategic plan for your farm, and if there is a farm bill, work to maximize benefits."
Jim Wiesemeyer, vice president of farm and trade policy for Informa Economics, said there is a chance the new farm bill will get done this year because Congress will want to show it can pass legislation prior to the November elections. And because of the dismal federal budget outlook
in 2013, getting the farm bill done could mean fewer cuts now rather than later.
"I believe a farm bill could get done. For that to happen, look for the Senate to have its markup completed by Memorial Day and the House to complete its debate by the July 4 recess," he said. If all of this falls into place, he added, Congress will have time to finish after the Nov. 6 elections. But if any of these deadlines are missed, the 2012 farm bill will become the 2013 farm bill.
Electronic Trading for Farmers
Trading is no longer an exclusive club with limited access, said Tommy Grisafi, president and CEO of Indiana Grain Company and a 20-year veteran trader who specializes in commodities. The days of trading commodities only in the grain pits at the Chicago Board of Trade are long gone.
"You can do what I do, today, if you take advantage of the latest tools and technologies," Grisafi said.
Farmers can start trading electronically for about $5,000, he added. Here’s what you need to get set up:
- Make sure you have a good phone, preferably an iPhone.
- Get a computer with two screens. "We have a friend who makes our computers," Grisafi said. He buys his computers from a company called Trading Computers.
- Pick up a broadband card. "I bought a router box for $300, and I just plug the different cards in as I need them. I can drive across the country and always have Internet access because of my broadband cards," he said.
- If you do start trading, do not get rid of your broker, Grisafi said. You need someone to execute the trade.
"Often, the most opportune time for you to market your crop is when you are out working in the field. So if you want to market your own grain, fine. But I personally think you need a good broker, a professional. You have execution risk when you click yourself and make the trade," he says.
Grisafi cautioned that electronic trading is not for everyone, but farmers who want to can do it for a nominal startup cost and from their own home.
Strengthen Your Financial Statements
Taking out a farm loan is not a simple transaction these days. Peter Martin, finance consultant at Kennedy and Coe, said your banker needs to know the risks in lending to you and how to mitigate those risks. "One of the biggest mistakes you can make as a borrower is walking into your bank, dropping off your statements, then leaving," he said.
So what are bankers looking for? Martin said your records should be readable; accurate; timely; complete and global; accrual versus cash; borrower prepared; and CPA compiled, reviewed and audited.
"You want to make sure your lender can pick up your statement and instantly understand your operation—liabilities and income," he said.
Always be timely with paperwork you owe your banker. "It never ceases to amaze me how much people frustrate their bankers by not getting their papers to them in a timely fashion," Martin said.