Success and growing pains, three young gun farmers discussed the formulas of their achievement at Top Producer Summit in Nashville, Tenn., on Feb. 15. Matt Splitter, Kansas; Matt Sims, Illinois; and Tony Schwarck, Iowa—all past Tomorrow’s Top Producer Horizon Award winners—described their strengths and struggles as innovative growers.
Pivotal Moment
Matt Splitter began farming solo in 2010, on 1,200 acres with a single part-time employee in the bull’s-eye of central Kansas and presently produces grain and cattle on 12,000 acres, alongside six fulltime employees.
Splitter cites 2015-2016 as a fulcrum moment of his operation’s success, despite a near-brush with bankruptcy. “I had to swallow my pride and start listening and taking advice. We took a step back and analyzed our cost of production, and not just per acre, but per bushel and per unit of operation, right down to the decimal point. That’s when we became certain about what was making money and what wasn’t.”
In approximately 2012, Matt Sims bought 200 acres, and now farms 6,000 acres of corn and soybeans in east-central Illinois and west-central Indiana, beside five fulltime employees. A major plank of Sim’s success is recognition of when to walk: “I’ve learned to never be afraid to walk away if a farm is not profitable. In the last five years, I’ve rented twice as many acres as I farm.”
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Tony Schwarck is a third-generation Riceville, Iowa farmer, with an operation split between row crops and a cow-calf operation. In 2010, Schwarck began searching for a means of diversification that would fit his operation and geography. “My wife Erica and I asked, ‘What resources do we have?’ Our biggest was corn. So how could we add value? We’ve got ethanol plants and distiller’s grains all around us—the answer was cattle.”
Schwarck was shocked by how fast his cattle production grew: In 2012, he was not feeding a single animal; in 2017-2018, he had 2,500 head of cattle. “Certainly, we had growing issues to work around and financial stumbles, but we stuck with it.”
Pocketbook
What financial advice do the three farmers offer to other young producers?
“Be open and honest with your lender,” Schwark says. “Do exactly what you say you will do. Under-promise and overperform. If you show a bank a number, you better deliver. Establish a track record of consistent delivery, and then you build trust. No doubt, getting there is tough, but have a plan and stick to it.”
“The biggest thing on trying to figure out when to grow is the question over working capital,” Sims explains. “You always are playing catchup. You can’t wait on cash to be there because the opportunity will be gone. Early in my career, I was willing to take a risk that I wouldn’t take now. I’m more cautious now to make sure I have cash on-hand to withstand a downturn.
“One thing we do that opened our eyes was to make a complete financial statement that provided a clear picture of where we were,” Splitter adds. “After we did that once, it made it easier the next time. We have a live balance sheet today and at any point, we know our exact position.”
