View From The Top: Q & A with Rod Osthus CEO, RC Thomas Company

January 25, 2017 02:35 AM

You train ag sales reps all over the world. What are some of the most important things you teach them about working with farmers?
I teach them to start delivering real value to farmers and stop just trying to save them money. As smart and sophisticated as today’s farmers are, they need help overcoming the two biggest threats to their profitability—input costs and market prices. 

Farmers are being given the wrong advice. They’re being told they need to lower costs to save themselves into prosperity. That strategy isn’t working. Instead, it’s taking away the farmer’s ability to achieve exceptional yields. But exceptional yields are their only solution to overcoming the two greatest threats. 

Company: The RC Thomas Company started in 1994 and is the No. 1 seed sales consulting firm 
in North America. It has offices in Olivia, Minn. and West Lafayette, Ind.

Education: Bachelor’s degree from South Dakota State University.

What managers must read: I read the MIT Tech Review, Harvard Business Review, Strategy in Business and Scientific American.

Business leader you admire the most: Steve Jobs and Jack Welch did significant things.  

Favorite leadership quote: Archilochus said, “We never rise to the level of our hopes. We fall to the level of our training.” That’s really what we focus on. The other one is by Albert Einstein: “The thinking that has brought me to where I am has caused some problems that thinking at this level can no longer solve.”

Aren’t ag suppliers offering farmers the latest products and services they need for success? 
Those aren’t the secrets to profitability. Genetic advances increase yields only an average of about 1% per year. Farmers can’t stay in business at that rate. In addition, technologies don’t increase yields, they protect the yield potential that already exists. For farmers to get the yields they need, they must change how they think, and they need help to do it.

What do you mean when you say better yields require a change in how farmers think?
Albert Einstein said that you can’t both fight a war and keep a war from starting at the same time. You either keep it from starting, or you focus on winning. Farmers are trying to cut costs and increase yields at the same time. It doesn’t work. Raising yields to the levels needed today requires farmers to focus solely on raising yields. That requires a change in thinking.

Can you give some examples?
The past growing season was an example of farmers getting the wrong advice. Many areas had a lot of wet weather. The first thing many growers did was to plant their crops in less-than-favorable conditions. They continue to believe their optimum planting window is only a few days long. 

But in most areas of the country, the planting window is really at least 35 to 50 days in length. Early planting itself can only give farmers small yield increases. What farmers really need are significant yield increases every year, from 15% to 40% each year, and that comes only when planting conditions are right, regardless of what the calendar says. 

The No. 1 factor to producing a top crop each year is the condition of the soil at planting, and many farmers violate that every year.

Farmers are also getting the wrong advice when it comes to plant populations. We don’t use plant populations to pursue top yields anymore. That’s old 20th century thinking. We use a concept called bushels per thousand plants. That is, how many bushels are being produced by every 1,000 plants in the field? 

If the average farmer surveys his plant population 10 days after planting, he would find only about 75% to 80% of the plants will give him full production. They’re the tallest ones in the row. 

The remaining 20% to 25% are what I call runt pigs. They are plants that will never catch up and produce to their full potential no matter how much you care for them or feed them. 

Farmers shouldn’t consider increasing plant populations until their corn population, for example, is producing 8 bu. per thousand plants. That means a plant population of 36,000 should be giving the farmer 288 bu. per acre.

What else do farmers need to do?
First, they need to get out of what I call the Ag Cycle, which is the mindset of doing what they’ve always done at the same time they’ve always done it. 

They must stop delaying the planning process for next year’s crop until after harvest or later. It’s costing them big dollars. Second, they need to stop beating up their suppliers and find the ones who can truly help them grow their businesses. It’s impossible for farmers to keep up with all of the changes by themselves.

What do you see as the future for farmers taking over their parents’ operations?
The future is bright for those who stop doing things exactly the way their dads and grandfathers did. The best legacy plan fathers can pass on to their sons or daughters is not about transitioning assets but about offering them a new way of thinking about planning how to maximize production while working together with a team of trusted advisers.  

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