This week Paul Neiffer has a conversation with Ben Riensche, owner and manager of Blue Diamond Farming Company in Jesup, Iowa.
When Riensche joined his family in the 1990s, he knew he needed to make his own opportunities. He’d watched the family farm, which has been in north central Iowa for 100 years, shift from a diversified farm with several types of crops and critters to a specialized grain production operation.
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After graduating from Iowa State University, Riensche spent a decade in the banking world.
“I had success in a career in finance, he recalls. “I had a very ample income for someone my age. I can’t say I had a briefcase of money like some people thought I did coming from the bank, but I did have the ability to raise capital by borrowing from banks. And I do speak fluent banker from that experience.”
Riensche zeroed in on crop production and looked for ways to expand and grow his operation.
“We did our expansion at the time where precision agriculture came of age, as well as better seed technology. Plus, ethanol came of age. Even a blind squirrel finds a nut every once in a while,” he says.
He started picking up farmland further and further away from his home farm headquarters. This evolution led to him developing the brand of Blue Diamond Farming Company.
“Thirty years ago I bought a used truck and it was decorated with blue diamonds on the side,” Riensche says. “That was the year we started farming over a much wider footprint. We’d actually had a chance to take over some land almost 100 miles from home.”
Since no one could correctly spell Riensche, the elevator employees would just start writing “Blue Diamond” on the tickets. The name stuck.
“It’s not the worst thing to take your family name out of your business,” he says. “When you employ people, they assume if they don’t have your last name, they won’t be important. A lot of important people at our farm don’t have last name. So, our farm name is a good thing.”
As Blue Diamond Farming Company has expanded, Riensche has kept a close eye on his balance sheet and asset portfolio.
“One of the deadly sins I saw farmers always do was pick up too many fixed assets because you can’t buy 1.3 combines,” he says. “I saw an opportunity to use our equipment further down the road on a slightly different weather pattern in a slightly different season than us. Turns out there was some serendipity to it to be able to spread fixed costs and find other places to farm with our equipment while other people use their fixed assets for a few days and parked it in the shed.”
Riensche slowly built his asset base, which he believes is still the strategy to follow today.
“I’m not going to tell anybody a decade or three younger than me that you’ve got to go out and buy a lot of fixed assets right away,” he says. “But I’d certainly want to operate in a way that provided enough cash flow that I can peel some away to make fixed asset investments.”
Today Riensche’s operation includes a son-in-law and will likely involve his children in the future. He wants his kids to go obtain skills and talents from other industries for at least five years before returning to the farm.
“The last thing I need is my kids here repeating my bad habits and mistakes,” he says.
Listen to additional episodes of the Farm CPA Podcast:
Episode 8: Steve Bruere, Peoples Company
Episode 7: Ken McCauley from Kansas
Episode 6: Dick Wittman and Cori Wittman Stitt from Idaho
Episode 5: Roric Paulman from Nebraska
Episode 4: Dave Nelson of Iowa
Episode 3: Jim Wiesemeyer, Pro Farmer
