Pushing with the Pacesetter

October 16, 2018 09:37 AM
 
Grogan Farm Kentucky

Fat-cat speculators waited impatiently on the end of phone lines for a bidding war as lawyers hovered politely at the back of the room. Bankers manned the center aisle and pounded the flesh, while auctioneers primed the pumps of both the eager and the leery. Growers spoke in hushed tones, hopeful the speculators would not snatch the entire haul.

Quietly watching the agricultural tapestry unfold, a 13-year-old Kentucky boy sat beside his farming father and kept a tight grip on a pencil, pad and calculator. When the land auction began, the father whispered direction as the boy scrawled on the paper and tapped digits into the calculator. The boy was not crunching numbers—he was learning to farm.

U.S. agriculture is filled with farmers adept at navigating the cutthroat corridors of farming business—and then there is the visionary Darren Grogan. The western Kentucky grower steers a thriving vertical operation, consistently straddling the seam between land and finance. Efficiency is gospel; innovation is a given; no excuses, least of all for himself. Yet, despite strict adherence to a business-first model, he casts a permanent shadow over 20,000 acres of crops.

Want to find Grogan? Look in the fields. Want to keep up with Grogan? Good luck.

Sausage Kings. On rolling ground of Carlisle County, Grogan, 44, alongside father, Bobby, 72, and brother, Brian, 40, grows 7,500 acres of corn; 6,500 acres of soybeans; and 6,000 acres of wheat (double-cropped with soybeans). North to south, Triple G Farms runs 30 miles up and down the Mississippi River. West to east, the farmland hugs 75' bluffs, never stretching more than 15 miles from the river.

Triple G’s immense size essentially sprang from the confines of a hog pen. In 1972, with a small farm on the side, Bobby took an entrepreneurial swing at a sausage company, which grew to 50 employees filling demand across seven states. In 1996, the big guns came knocking and Bobby sold high to a publicly-held company. With the sale proceeds, Triple G went full-bore into farming, buying low-priced land and keeping a keen eye out for more. They currently own 91% of their acres.

On a typical day, the Grogans arrive at Triple G’s silent farm headquarters in the early morning hours, long before the turn rows spit dust. The trio piles into a single truck and picks up orders of gas station takeaway. Breakfast in hand and coffee at the ready, a 30-minute business meeting begins in a four-wheel drive boardroom.

“We discuss how we’re going to manage for the day, and that’s one of the consistent, overlooked details that makes us successful,” Grogan explains. “It’s an informal meeting that is pretty formal. We start on the same page and have a clear understanding of the tasks at hand.”

Meeting adjourned, Grogan heads for his crops. He personally handles all prescriptions related to precision agriculture, and writes algorithms based on variable-rate application metrics on everything from seed to herbicide to fertilizer. Even on a massive 20,000-acre operation, Grogan is a shadow in his fields.

“I’m not going to hire someone to do what I do. I could pay someone $15 per hour to run a combine instead of me, but I don’t. Why? Because somebody with a vested interest has to set the pace,” he says.

In a constant search for greater efficiency, a high level of management requires an even higher level of calculation. “Everything is in the details. So many people miss this: If you can’t brand your commodity or get a premium, there is one way to survive, and that’s to be more efficient than your peers.”

Grogan doesn’t think a season ahead or even a year down the road, but instead projects in decade-sized chunks. He listens to field recommendations, but holds a marked degree of independence on final calls, says Neil Pierce, regional sales manager at Hutson Inc. “He’s the one accountable and ultimately makes the decisions himself. But he thinks in a big-picture style: If he does x, how does it affect y and z? Seriously, his mind is all about 10 to 20 years in the future.”

Bottomland Blossoms. On an early July day, pulling a train of dust and a work ethic second to none, Grogan is roaring down a turn row to begin a check on a chain of 32 pivots. (He maintains a T-L Irrigation dealership.) Although the pivots are fully automated and remotely monitored, Grogan stays on task, hyper-focused on watching over the precious flow. “We go in early on everything and were an early-adopter of pivots in our area. We’ve got plenty of water, but wells are extremely expensive here.”

Approximately 40% of Triple G’s acreage is irrigated and 40% of its river-bottom ground is tiled. Grogan estimates 25% of the operation’s farmland is in drought risk.

Translation: The Grogan trio foregoes heavy crop insurance coverage, preferring to use it selectively. “We take our investment in what would be crop insurance and put it in irrigation and tile.”

Triple G has almost 100% of acreage in no-till, supported by around 2.5 million feet of drainage tile. The operation was an early adopter of tile. The hazard of spring rains on river bottoms has been replaced with drainage stability and consistency, throwing the door open on double-crop wheat. Once a source of frustration and insecurity, the bottomland has blossomed into some of Triple G’s most productive ground. “Spending the money on a huge tile system is one of the things that makes our farm very profitable, even compared with other strong farms in our area,” he notes.

Only 40 years in the past, Carlisle County was heavily dotted with livestock. Worn by continuous tillage, traditional farmland was subject to heavy erosion. However, the area has quietly become one of the most profitable row crop farming regions in the U.S., according to Grogan. It has been transformed by the power of no-till and bolstered by relatively low land prices.

“No-till has brought us a fairly efficient cost of production,” he describes. “Land prices have consistently been lower than in the Midwest, even though we keep watching our yields climb. In my area, operations are highly capitalized and you’ll see more new equipment than just about anywhere.”

Eye-catching yields shine bright, but Grogan says high numbers can sometimes deceive: “We don’t have the historical yields of black-dirt states, but I’m not concerned about overall yield. I only focus on profit per acre; that’s it. I’m surrounded by some of the best profit-per-acre growers in the country.”

With 1.3 million bushels of storage capacity, Grogan can’t quite store an entire crop. His marketing strategy initially focuses on bushel overflow. For the stored crop, it’s a “hedging, forward sales, anything to maximize” approach. Grogan is a cost-per-bushel devotee and keeps the numbers at hand. “I use a spreadsheet with costs of production figured to cost per bushel. Anticipated, actual or current yields, I know the cost per bushel number at all times no matter what. That’s what drives our grain sales.”

Slaughtered Sheep. As a commercial pilot and flight instructor, Grogan noted increasing demand for agriculture aviation in 2012. Alongside two farming friends to share the risk, Grogan started Precision Ag Aviation. The crop dusting company now sprays 250,000 acres per year.

Whether farming or business, Grogan “sees the trends coming,” according to Keenan Carlisle, 58, operations manager of Precision Ag Aviation. “Darren is only is his early forties, but has the leadership and confidence of a man 20 years older. His ability to make decisions and move forward is remarkable and unusual. He always seems like the first guy to see the future.”

“Just look at what he’s done with no-till as an example,” Carlisle continues. “Other guys have acres of equipment lined up that represent expense. Not Darren. His equipment is limited, and the savings aren’t hard to figure out.”

With a university background in finance economics and accounting, Grogan sits on the board of an ag credit association with $500 million in assets. He is the chairman of the audit committee and the board’s designated financial expert.

Grogan is also heavily involved in a real estate development group and outside investment in the banking industry. In 2016, the Grogans and two partners purchased 3,860 acres of paper mill trees on Wolf Island (across the Mississippi River, but technically still in Kentucky), cleared the ground, and put it in row crop production in a single year.

Always on the hunt for more business opportunities, Grogan uses a cost-benefit probe to search for ways to leverage capital. He picks apart all facets of opportunity, save one: the amount of work.

“I give no consideration to how much work is involved or how daunting the task,” he says. “If we can manage the risk then we’re in. I’d rather make a poor decision instead of no decision. In so many cases, a poor decision leads later to a right decision. Sheep that keep their heads down get slaughtered every time.”

Despite successes from multiple business ventures and the vertical orientation of the operation, all financial roads trace back to Triple G fields, because the heart of Grogan’s income is on the stalk. “I see big farms where farmers think, ‘My time is too valuable for the field.’ Let me be clear: First and foremost what I do is grow crops.”

 


Kentucky Farm Equipment

Thorn in the Flesh. Triple G’s functionality rests entirely on the shoulders of key team players. On a given planting day, hundreds of thousands of dollars exit the operation—a massive expenditure protected by teamwork.

In 2018, Grogan cast an umbrella of authority across all facets of the farm, designating key managers for planting, shop activity, harvest and far more. Rather than field 40 calls a day, Grogan implemented a bit of bureaucracy. He confesses his own past weakness—taking on too much. “Someone told me a long time ago, and I should have listened quicker, ‘Try to do it all yourself and you’ve limited your company.’”

Labor management, admits Grogan, is a constant thorn in the flesh. “Frankly, we can’t find guys that can keep up with us. But we are truly fortunate to have a central group of guys beyond our family that we depend on. They give their best and have earned my trust.”

A major factor in sustained operational success hinges on the ability of the Grogan trio to cast self to the sideline. Simply, Triple G can’t run efficiently without self-sacrifice.

Particularly during harvest, Brian manages the granary. Grace under pressure, he maintains a symphony of weight, spreadsheets, outgoing loads, bin temperature, grain dryers and much more. “Just in handling the dryers, Brian is dealing with serious dollars,” Grogan emphasizes. “A percent one way or another is big money when you’re talking more than 1 million bushels of corn.

“Brian is also a people person and deals better with employees than me. I push and he cools, and he handles people right,” Grogan adds.

Bobby handles marketing decisions and is involved on all operation decisions. “My dad built a huge estate from nothing. He shaped us, and I wouldn’t have my work ethic or business sense without him.”

“You’ll never make more than a living with your hands,” Bobby echoes. “The rest you’ll have to make with your mind.”

Father, Finances, Future. Grogan exercises a dualistic farming nature required of today’s producers. Constantly surrounded by crop fields, he doesn’t hesitate to point toward what he considers the biggest component of agriculture—finance.

From his early teens, Grogan learned the money side of farming from his father. “My dad is the real visionary,” he acknowledges.

With any farming operation, a choice must be made between a family-first or business-first orientation. “We are a business-first operation,” Grogan adds. “Why? Because business-first is how to make sure family-first stays in place.”

Grogan remains a driven farmer but an even harder-driven businessman. “I’m hard to keep up with, but it’s because I care about tomorrow.”

Indeed. Because somebody with a vested interest has to set the pace. 

 

The Grogan Trio of Triple G Farms

Darren Grogan, alongside father, Bobby, and brother, Brian, are partners in Triple G Farms. While their duties
commonly overlap, they have each zeroed in on specific components of the business that align with their strengths.

Darren Grogan, 44, focuses on farm finances and heads day-to-day operations. He analyzes new business opportunities and ways to become more profitable.

Family patriarch, Bobby Grogan, 72, handles marketing decisions, but is involved and consults on all operation decisions.

Brian Grogan, 40, manages the granary and processes around 90,000 bu. of corn per day. He also manages their nine full-time and seven seasonal employees.

 

 

High-Tech Attention to Detail

Technology is king at Triple G Farms. Several agriculture-related companies frequently evaluate new machinery and agronomics prior to commercialization on the Kentucky farm. Since the late 1990s, Darren Grogan has eagerly jumped on early adoption of any and all agriculture technology.

“I’m ready to be the first out of the gate because I always, always believe there is a better way to do things that just hasn’t been discovered yet,” Grogan shares.

Roger Gipson, product agronomist for Corteva Agriscience, works with Grogan on farm trials, performing pre-commercial product testing. “Whether utilizing variable seeding rates, fertility programs, irrigation
management or field mapping, Darren makes sure their farming operation is on the cutting edge of all production-related technologies. He pays careful attention to all production and marketing related aspects across their 20,000-acre operation in order to maintain profitability.”

Grogan gets the most out of every acre by managing not some, but all details from hybrid and variety selection to marketing, Gipson adds. “Young farmers in this tough farming climate should take note.”

 

 

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