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AG Mag A look ahead Southwest Iowa

What the area agriculture community will be talking about this year: n Planting and prices n The 2018 farm bill n Local solar farm and wind farm projects A Publication of Shaw Media

Spring 2018

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2 Spring 2018


Index The 2018 forecast

AG Mag Southwest Iowa

Publisher Rich Paulsen

What does the coming season have in store for local farmers? Much of the same, experts say.

Advertising Director Craig Mittag Managing Editor Scott Vicker Magazine Editor & Page Design Jeff Rogers Reporters & Photographers Tyra Audlehelm Kaleb Carter Denise Caskey Alex Felker Caleb Nelson Bailey Poolman Rachel Rodgers Jeff Rogers Scott Vicker Published by Creston News Advertiser 503 W. Adams St. Creston, IA 50801 641-782-2141

COVER STORY PAGE 7

Articles and advertisements are the property of Creston News Advertiser. No portion of the Southwest Iowa Ag Mag may be reproduced without the written consent of the publisher. Ad content is not the responsibility of Creston News Advertiser. The information in this magazine is believed to be accurate; however, Creston News Advertiser cannot and does not guarantee its accuracy. Creston News Advertiser cannot and will not be held liable for the quality or performance of goods and services provided by advertisers listed in any portion of this magazine.

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A look at the new sheep and hog barn at the Union County Fairgrounds.

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Solar farm in Adams County leads the region’s renewable energy push.

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BACK ON THE ROAD AGAIN Soon, it will be planting season; experts forecast ‘broken record’ year of high yields, low prices BY SCOTT VICKER AND RACHEL RODGERS For Southwest Iowa Ag Mag

B

arring big changes in production and demand, farmers are likely to see high yields and low market prices continuing into the 2018 season. That follows a trend of record-high yields for corn and soybeans but lean margin years from depressed prices.

The United States Department of Agriculture estimates that 2017 corn yields in Iowa were 202 bushels per acre, the second time Iowa’s average corn for grain yield has gone above the 200 bushels per acre mark, and the soybean crop yielded 58.5 bushels per acre. At 10 million acres planted, Iowa saw the most planted acres to soybeans since 2006. CONTINUED ON 84

AG Mag

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4CONTINUED FROM 7 Corn and soybean prices are projected to be relatively similar to the past 3 years and lower than the 2007 through 2014 period when the projected price averaged $4.93 per bushel. Planning numbers for farmers remain in the mid-$9 range for soybeans and mid-$3 range for corn, and fall delivery bids are near $3.60 per bushel for corn and $9.60 per bushel for soybeans. Many area farmers see the trend of strong harvest numbers but lower commodity prices continuing into 2018, unless something drastic happens. “There’s just an overflow of corn,” said Stan Knox of Clearfield. “More corn in the bin always means lower prices. Supply and demand is what it all boils down to.” Tom Sackett of Ringgold County cited better technology as one reason for record harvests or near-record harvests in recent years. “The technology and the variety of the seed we have now are so much better than anything we used to have. It makes it easier to put together a good crop package,” Sackett said. “If it rains at all, it can be a decent crop. If it doesn’t rain any, we’re in trouble. We saw that this year in our county. The variance in yields from the north side of our county and the south side of the county was quite a bit different

8 Spring 2018

Historical yields (in millions of bushels) Corn Year Iowa Nation 1997.....................138............... 126.7 1998.....................145............... 134.4 1999.....................149............... 133.8 2000.....................144............... 136.9 2001.....................146............... 138.2 2002.....................163............... 129.3 2003.....................157............... 142.2 2004.....................181............... 160.4 2005.....................173............... 147.9 2006.....................166............... 149.1 2007.....................171............... 150.7 2008.....................171............... 153.3 2009.....................181............... 164.4 2010.....................165............... 152.6 2011.....................172............... 146.8 2012.....................137............... 123.1 2013.....................164............... 158.1 2014.....................178.................. 171 2015.....................192............... 168.4 2016.....................203............... 174.6 2017.....................202............... 176.6 because of the water.” Even though the southwest and south central portions of the state are experiencing a relatively dry winter to this point of the season, experts don’t see it as a detriment to the 2018 planting and growing season. Rains after the early part of March could prove to be crucial for the 2018

Soybeans Year Iowa Nation 1997.......................46................. 38.9 1998.......................48................. 38.9 1999....................44.5................. 36.6 2000....................43.5................. 38.1 2001.......................44................. 39.6 2002.......................48.................... 38 2003....................32.5................. 33.9 2004.......................49................. 42.2 2005....................52.5.................... 43 2006....................50.5................. 42.9 2007.......................52................. 41.7 2008....................46.5................. 39.7 2009.......................51.................... 44 2010.......................51................. 43.5 2011....................51.5.................... 42 2012.......................45.................... 40 2013....................45.5.................... 44 2014.......................51................. 47.5 2015....................56.5.................... 48 2016....................60.5................. 52.1 2017....................56.5................. 49.1 planting and growing season. “Once [thawing] happens, we want to see some rain coming, especially early on to get that moisture in the ground sooner before usual planting time comes up,” said Harry Hillaker, state climatologist. CONTINUED ON 94


4CONTINUED FROM 8 “It will put people at ease to get more moisture in the ground. Right now, it’s just a waiting game because not much improvement is going to happen at this time of the year.” Lee Schulz, an agriculture economist at Iowa State University, said many issues surrounding crop markets the past few years are likely to repeat this year. “Large crop supplies have been produced globally,” he said. “Crop demands have reached record levels, but crop stocks continue to build.” In Iowa, corn stocks totaled 2.38 billion bushels, down 1 percent from 2016, and soybean stocks totaled 487 million bushels, up 6 percent. Farmers have been able to break even or turn a small profit during the trend, though it’s critical farmers are prepared for another lean year by cutting costs and improving efficiency. “The projected prices in recent years are somewhat of a ‘broken record’ in that

the outlook is very similar in each year since 2015,” Schnitkey said. “Given that trend yields are received, Lee Schulz projected prices are at levels that, at best, reflect marginal profitably on many farms.” Putting in early and bulk seed orders could help with costs as seed prices continue to rise. Neither Knox nor Sackett sees themselves doing anything much different in 2018 compared to prior years. Knox, however, is cautiously optimistic things can be better, if only slightly, in 2018. “The cold spell we had through Christmas should have helped out on killing some of the pests that hibernate in the ground over the winter. So I don’t think there will be as much insect problems as there usually is,” he said. “If we have a dry summer, the corn and soybean prices will maybe upsurge a little bit, but not anything great.”

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FARMERS FORUM

With Scott Vicker of Southwest Iowa Ag Mag

What’s the biggest decision you have to make in planning for the upcoming planting season? Stan Knox, Taylor County “Just to shop around and find your best prices and go from there. There’s a difference in prices of the seed and just cut an expense where you can, whether it be seed, fuel or fertilizer.” Stan What’s the outcome of Knox that decision? “Hopefully for the betterment of the bottom line of production costs.”

Tim Dunphy, Union County “The biggest decision I have to make is probably marketing. You can always grow more, but agriculture, as a whole, if we grow more, we’re digging the hole deeper. We need to be as efficient as possible on Tim Dunphy every acre to maximize profitability on every acre. Unfortunately, for more row crop producers,

we really don’t have a lot of control on the market. Just doing my due diligence and knowing the break even and making sales every opportunity I can above my break even.” What’s the outcome of that decision? “Above break even pricing. Which, by the way, we are not at currently.”

Tom Sackett, Ringgold County “It all depends, between fertility and chemical you use and seed, those are your top three. Getting the equipment ready is very minor. I’m sure fertility and seed and chemicals are the top three. Tom “Inputs have actually gone Sackett down just a little, not much. Anhydrous and fertilizer was down a little this year and seed cost, too. It needs to be compared to what you’re getting per bushel now. Rent probably needs to come down, as well.”

Don Hunerdosse, Warren County “Biggest decision is, and I don’t usually do this a lot, but we’ve been price shopping for the best possible input costs – seed, fertilizers, chemicals. Just trying to be a little more economical. I’ve worked a lot on that Don Hunerdosse this year. I have spent more time on that this year than I normally do. We typically plant a DeKalb corn and DeKalb corn is more expensive, and this year we’re working on trying to trim our production costs.” What’s the outcome of that decision? “Well, that decision is a help. The outcome, I think, is better marketing. We’ve got to take advantage of knowing what our costs are and knowing that we can sell for a profit at a certain price. If corn got to $3.50, if that’s our magic number where we can make a profit, maybe we should be a little more aggressive in marketing. I think we all have been reluctant in making big sales in the past. If you can lock in a profit or lock in at least your production cost, it may be beneficial.”

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12 Spring 2018


HERE COMES THE SUN! S

BY DENISE CASKEY For Southwest Iowa Ag Mag

outhwest Iowa Rural Energy Co-op has a new solar farm. The farm, located outside of Corning along High-

way 34 in Adams County, has 7,128 panels on a little more than 10 acres. The site, which was scheduled to go online the week of Jan. 29, is expected to produce about

Our

Region adds solar power to energy portfolio

2 megawatts of power, which should be enough to supply 300 to 400 homes, said Kerry Koonce, spokeswoman for Central Iowa Power Cooperative (CIPCO). CONTINUED ON 144

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4CONTINUED FROM 13 The cost of building the solar farm was relatively low, Koonce said, because panels were purchased in bulk and, because crews had their assembly down to a science, it took very little time and labor to put them together. It’s too early to tell whether this new addition to the energy portfolio will save consumers money. The cost of distributing the energy and maintaining the system continues to rise, but because CIPCO is able to provide the co-ops with energy at a lower rate, consumers should not expect to see an increase in their power bill in the foreseeable future. CIPCO would eventually like to see a decrease in consumer rates, Koonce said. “We’re not seeing a bunch of savings yet because you have to pay for the technology,” he said. “But we’re not raising rates. CIPCO is a generation and transmission provider, and we provide the energy to Southwest Iowa REC, and we haven’t raised

Denise Caskey/Southwest Iowa Ag Mag

Solar panels from the Southwest Solar Farm spread out over the horizon west of Corning. The farm is a little more than 10 acres and will produce nearly 2 megawatts of energy – enough to provide power for 300 to 400 homes in the region. The farm, which was expected to go online the last week of January, is maintained by Central Iowa Power Cooperative. rates. In fact, we lowered rates last year a little bit.” With the recent tariff President Donald Trump has placed on solar panels, Koonce said, any plans for future additional solar farms would come down to cost. “We need to see what it does to the prices,” she said. “We don’t have any additional sites that are planned at the moment, but we would need to look at the pricing because our members want renewable

energy, and we want to give them that, but at the same time, we have to balance it across costs and make sure we’re not adding a cost to the system that increases rates.” Currently, 95 percent of CIPCO’s energy needs are produced in Iowa, and more than 60 percent of that power comes from emission-free resources such as solar and wind, as well as hydroelectric and nuclear. On the wind energy front,

Randy Caviness, senior manager of community wind projects, said the 13 community owned wind turbines in the region are providing 83 million kilowatt hours of power and can serve the energy needs for roughly 8,000 homes. “Our local REC, Southwest Iowa REC, uses about 100 million [kilowatts] a year,” Caviness said. “Our little 13 turbines will raise 80 percent of what one of the electric coops sell in a year. That being said, we can’t supply their power all the time because sometimes the wind isn’t blowing and sometimes we supply twice what they need.” The power produced by these 13 community turbines isn’t the only thing that stays here. “It brings an awful lot of money back to the community,” Caviness said. “It gives people here a chance to own their own production, and keep the tax credits and all the money local, which is millions of dollars a year. We kind of think that’s been a pretty big deal for us.”

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14 Spring 2018


Jorgensen wins coveted Danforth Award BY CALEB NELSON For Southwest Iowa Ag Mag

N

orthwest Missouri State University freshman Hannah Jorgensen was pleased to receive the most prestigous award of the day Nov. 5 when she accepted the Danforth Award as part of the 4-H Awards Day at the Warren Cultural Center. A 2017 Nodaway Valley graduate, Jorgensen is on the tail end of her 4-H career, which has included her leadership in the Adair County Youth Council as well as the Summit Stars 4-H Club. Jorgensen attended Adair-Casey High School for three years before transfering to NV, where she was heavily involved in several activities. Jorgensen’s 4-H involvePhoto submitted ment began when she was in Hannah Jorgensen, a former third grade. Adair County 4-H member, “My mom was a leader received the Danforth Award before that, and my brothat her county’s 4-H Awards ers were in 4-H, so I’ve been Day, the highest award one tagging along since day one,” can garner in that county. Jorgensen said, noting her mother, Jeanette, has still being a younger member to been a club leader for many the older kids stepping in years. “This is my last year and helping, our club is a and it’s kind of sad, but it’s very young club,” she said. been a good 10 years.” “Getting that opportunity Growing up on a farm, to lead those younger kids Jorgensen became involved so they have the opportuin many of the agricultural nities I had [were growing aspects of 4-H, including moments].” raising cattle. Between that Another one of Jorgensen’s and the record keeping 4-H highest achievements came encourages, Jorgensen feels when she received a project she’s been well-prepared to award at the state level that take next steps in life. included a rigorous entry 4-H even helped in applyand interview process. ing for scholarships – listing Jorgensen studies agriactivities comes easy. cultural science and has an “It’s super easy to look back agricultural communications in my record book to see minor at Northwest. what I did this year, and what “I did those for three years, I did that year,” Jorgensen and that resume writing said. helped for now, when I’m “The people who work in resume writing for internthe Extension office have ships in college,” Jorgensen been such a huge help, said. “I don’t think I’d be able and the way that the club to do any of the things I do system works, going from now without 4-H.”

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AG Mag

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READY FOR THE SHOWS A LOOK AT THE NEWLY CONSTRUCTED SHEEP AND HOG BARN AT THE UNION COUNTY FAIRGROUNDS

Scott Vicker/Southwest Iowa Ag Mag

LEFT: The new sheep and hog barn at the Union County Fairgrounds blends into the snowy ground in February at the fairgrounds in Afton. The new building will also include a show arena and restroom facility. RIGHT: All that remains of building supplies at the Union County Fairgrounds is this pile of wood palettes and gutters covered in snow. The “Building on Tradition” campaign raised more than $1.5 million to construct a new cattle barn and new hog and sheep barn. Kaleb Carter/Southwest Iowa Ag Mag

The area where the show arena once stood at the Union County Fairgrounds sat leveled off, ready for construction to begin on the new 110-feet by 240-feet hog and sheep barn in August 2017. The exterior of the structure was recently completed, while completion of the building, which also features a restroom facility, is expected to be done by July. 16 Spring 2018


Bailey Poolman/Southwest Iowa Ag Mag

The interior of the old show arena at the Union County Fairgrounds in May 2016 looked like this. Now, the show arena will be in the new 110-feet by 160-feet open-sided cattle barn, which features removable stalls and a dirt floor, surrounded by concrete.

Scott Vicker/Southwest Iowa Ag Mag

The new hog and sheep barn, right, and new cattle barn, in background, sit in close proximity to the north grandstand of the rodeo show arena, left, at the Union County Fairgrounds in Afton. The two new buildings were constructed as part of the $1.5 million “Building on Tradition� campaign.

Bailey Poolman/Southwest Iowa Ag Mag

The peeling paint on an animal building at the Union County Fairgrounds in Afton in February 2016 shows part of the reason Union County Fair Board members planned to upgrade the buildings. Another factor was the number of youths participating in various fair activities.

Scott Vicker/Southwest Iowa Ag Mag

Snow blows into the interior of the brand new 110feet by 160-feet cattle barn at the Union County Fairgrounds in Afton. The new structure features a dirt floor surrounded by concrete and will have removable stalls to house the cattle. It will also serve as a riding arena for horses. RIGHT: The exterior of this animal barn at Union County Fairgrounds in Afton in May 2016 shows the wear and tear it has been through over the years. This barn was one of several torn down at the fairgrounds and recently replaced by a new, larger structure.

Bailey Poolman/Southwest Iowa Ag Mag

AG Mag

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Where would we bee? Honeybees are important to all of us, especially to this family

H

BY TYRA AUDLEHELM For Southwest Iowa Ag Mag

ow important is the honeybee? Without them, most plants couldn’t reproduce. Which would make scarce the fields that feed livestocks and, eventually, you. And they’re vitally important to the Taylor family that harvests the sweetest treat byproduct. But more on the Taylors in a second. First, back to the honeybee. To collect the pollen, honeybees travel from one species of plant to another, one species at a time, gathering nectar and collecting pollen from that certain species. That results in cross-pollination, which roughly threefourths of all plants rely on to reproduce. For the vegetable gardener, honeybees can increase production in just the first year. Starting a fruit orchard? Honeybees can help it grow like crazy. CONTINUED ON 194 Rob Taylor lifts a frame covered with honeybees out of the hive. The Taylor family collects honey, bottles and seals it, then ships it to their two selling locations, Honey Hill Events Center and Mayberry’s Coffee House, both in Osceola.

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4CONTINUED FROM 18 They don’t just help pretty flowers to continue to bloom, they help food to grow and reproduce. The more healthy food options that are available the better, and the more honeybees that are buzzing around, the more healthy food there will be. Honeybees are even essential for the meat industry. Meat-producing animals like sheep, hogs and cattle eat food that needs to be pollinated, such as alfalfa and other legumes. “Without pollinators, these food sources would take a dramatic hit, and feeding all of the meat-producing animals would be greatly affected,” Clarke County Conservation Board Director Scott Kent said. It takes honeybees to be able to put a full meal on the table. Rob Taylor and his family are making sure these pollinators are all across south central Iowa. The Taylor family owns the Iowa Honey Company in West Des Moines and Honey Hills Events Center in Osceola. They have seven beehives at Honey Hill Events Center, 12 hives on a family farm on H-45, 12 hives in Grimes, and two hives at their home in West Des Moines. “We wanted to show our boys how to

Photos contributed

The Taylors, (from left) Christi, Ben, Will and Rob, pose for a family photo in their bee suits. start a company and connect with agriculture,” Taylor said. The family collects honey, bottles and seals it, then ships it to their two selling locations, Honey Hill Events Center and Mayberry’s Coffee House, both in

Osceola. It takes a team to extract honey from all those hives. “Our family is our team,” Taylor said. CONTINUED ON 204

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4CONTINUED FROM 19 The family leaves enough honey in the honeycomb for the bees to get through the winter, and will extract the excess by spinning it out, a process which saves the honeycomb so the bees don’t have to rebuild it. After the honey has set for a while, they run it through mesh screens to filter it, then it sets for another 24 to 48 hours before they bottle it by hand and seal it with wax. Last year, the Taylors collected anywhere from 70 to 150 pounds of honey per hive. Honey is a sweet treat with health benefits of its own. It’s a great sugar substitute. Since honey is sweeter than cane sugar, it takes less of it to sweeten drinks and desserts. It’s good for diabetics, as it is processed in the body differently than cane sugar. It can even help people with allergies. “The rule of thumb is one teaspoon to one tablespoon of honey from your local area a day can help to build up immunity to allergens around you,” Taylor said. Honey is the sweetest treat, because it’s produced by honeybees that help all the other food Iowans enjoy to reproduce and flourish.

Photo submitted

Rob and Christi Taylor smile with gallons of bottled honey at their home in West Des Moines. They have beehives in various locations throughout south central Iowa, including at Honey Hills Events Center in Osceola.

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AG Mag

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High-stakes negotiations Buckle up, it’s farm bill time: Insurance safety nets for farmers a priority for local lawmakers

R

BY ALEX FELKER AND JEFF ROGERS For Southwest Iowa Ag Mag

ay Gaesser had the latest scoop on on the farm bill for Creston Kiwanis Club members during a late January meeting. The news wasn’t particularly optimistic. “There ... most likely won’t be any increase in funding [for farmers],” Gaesser, a Corning farmer and candidate for Iowa secretary agriculture told Kiwanians. “We’re just trying to hold our own in the farm bill. ... But we just heard from the USDA that they’re going to share some of their ideas for the farm bill soon.” The farm bill might be to agriculture what the Super Bowl is to football, the Daytona 500 to auto racing. It’s a massive, wide-ranging bill that impacts almost every aspect of agriculture and affects the ways farmers locally and nationally go about their business. A new farm bill must be passed every 5 years, and it’s that time again. The current bill expires in September. CONTINUED ON 234

Photo illustration by Alex T. Paschal/Southwest Iowa Ag Mag

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4CONTINUED FROM 22 But legislative work on the next farm bill began 3 years ago. It never really ends. The House Agriculture Commitee, for example, had 117 hearings on the bill’s issues between 2015 and 2017. Iowa is well represented in those discussions. Senators Chuck Grassley and Joni Ernst each are on the Senate Committee of Agriculture, Nutrition and Forestry, which will craft the Senate’s version of the bill. Gaesser, who was chairman of the American Soybean Association when the 2014 farm bill was passed and remains on the organization’s advisory council, listed what he considers to be important aspects of the next farm bill. “It’s really about helping young farmers get going, trying to improve the Supplemental Nutrition Assistance Program (SNAP), [and] improving markets,” Gaesser said. “We need to expand our markets – that strong dollar is good for a lot of people, but it’s not good for exports. So, all those market access programs that are being funded – we’re trying to improve those as well.” Increasing funding for rural Internet also is a priority, Gaesser said. It was part of the agriculture department’s recommendations to the House and Senate. “And I share that same concern, allow-

Alex Felker/Southwest Iowa Ag Mag

Ray Gaessar speaks to the Creston Kiwanis Club on Jan. 30 at the Windrow restaurant in Creston. Gaessar had announced his candidacy for Iowa secretary of agriculture 12 days earlier. ing us to be interconnected,” Gaesser said. “So that we can live out in rural areas and still have a job that is efficient.” Rural internet is part of the farm bill. So, too, is foreign trade. In fact, there are 12 “titles” covered by the legislation.

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It’s massive, remember? Price and income supports for farmers on commodities such as corn, soybeans and dairy are one of the most debated portions of the bill. CONTINUED ON 244

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4CONTINUED FROM 23 So, too, is crop insurance, which provides premium subsidies to farmers and subsidies to private crop insurance companies that provide federal crop insurance to farmers. And the credit title covers federal loan programs designed to help farmers access financial credit – direct loans, loan guarantees and other tools – they need to grow and sustain their farming operations. But the farm bill also covers conservation, trade, nutrition, rural development, research, forestry, energy, specialty crops, horticulture and outreach programs for the socially disadvantaged. In fact, spending on SNAP is a big part of the farm bill. It’s a lot of money. The 2014 farm bill projected spending on SNAP to be between $80 billion and $75 billion for each of the 5 years of the legislation. That spending has actually been a bit lower – between $78 billion in 2014 and a projected $68 billion this year – because SNAP participation has dropped along with the unemployment rate. The USDA’s Economic Research Service, using date from the Congressional Budget Office, projects spending on the 2014 farm bill to cost about $489 billion. (It’s worth noting that farm policy constitutes only 0.26 percent of the federal budget.) About 10 percent of those farm bill costs

go to crop insurance. That safety net is something farmers, and lawmakers who represent agricultural communities, are hoping to at least preserve, if not boost, in the next farm bill. Steve Steve Crittenden, senior Crittenden vice president for First National Bank in Creston, explains how the farm bill affects farmers’ banking practices. “What it does is it gives our farmers somewhat of a safety net in their production and prices,” he said, “which then allows the bank to have a little more surety about what we may be able to put into our cash flows.” Crittenden said the farm bill also helps farmers with crop insurance premiums – an important measure for farmers to protect themselves against production and price losses. “It isn’t a tool that’s going to make a farmer more or less successful,” Crittenden said. “It’s just a tool to help take out the real valleys in the prices. It helps to put somewhat of a floor on things.” That safety net may be more critical to farmers locally and nationally now than at any time in recent years. Farmers and ranchers have seen net farm income drop 45 percent over the past 3 years, according to the USDA Economic Research Service. Overall, the ERS forecasts a 50 per-

cent drop in net farm income since 2013. That drop impacts everyone, not just farmers. It leads to fewer equipment purchases, higher food prices, reductions in the use of cutting edge technology, and more. Farmers and the advocacy groups that support them say it is more important now than ever to push back against efforts to cut funding to risk management tools. Secretary of Agriculture Sonny Perdue, in a blog in January on the committee’s website, said that maintaining crop insurance is a priority. “We are talking about having a safety net that’s not so high that there’s no risk, but not so low that it’s so dangerous people can’t farm again,” he said. “So, that’s the challenge of the ag committee and Congress to write that farm bill.” Once the House and Senate committees each pass their own bills, they go to the full House and Senate. The expectation is those votes will occur in June or July. Those bills will be different, perhaps vastly so. Which means a conference committee of members of both houses will combine the bills into one that will be voted on by the full Congress, then approved by the president. If all goes well. If a bill is not passed and signed by the fall, Congress can approve extension periods for the existing bill until a new one is finalized.

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Increasing farm efficiency during challenging times Editor’s note: This is the first in a series of columns by Mike Moffitt that will appear in upcoming editions of Southwest Iowa Ag Mag. t’s no secret that for many producers the past few years have been challenging. The days of $7 corn and $15 beans are more than five years in the rearview mirror, and it takes a sharper pencil these days to be profitable and maintain a viable farming operation. Farm efficiency can be obtained in many different ways. A good farm tax expert can be extremely valuable. Some farmers focus on being better marketers. Others key in on reducing costs of inputs and understanding government programs. Using new technologies can help an operator bet-

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ter understand how resources are being used. Working with a banker to effectively manage capital is very important to other operators. Few farmers, however, have the time or resources necessary to study all of the areas where efficiencies can be gained. But in these times of lower margins, it’s worth taking a look at areas you might have ignored over the past few years, or strategies that you may need to take a second look at.

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4CONTINUED FROM 25

Tax strategies In 1935, United States Court of Appeals for the Second Circuit Judge Learned Hand said, “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.” The U.S. tax code offers numerous opportunities for those in agriculture to use legal means to reduce their taxes. Karen Havens, a CPA in Greenfield, Iowa, who caters to farm clients, believes you can be creative while being ethical and legal. “Farming has progressed to where business knowledge is essential, from choosing the right business structure to accurate records, tax planning, asset acquisition, cash flows and dealing with lenders. Farmers need to be aware of various tax strategies available to choose strategies that might benefit his particular circumstances, such as retirement funding, employees with employee health benefits, the Domestic Production Deduction, estate or succession planning, as well as other ideas. Finding knowledgeable professionals to help navigate the maze of options is critical.” Other strategies that can serve dou-

ble-duty as both cost-reducers and taxsavers for specific situations include establishing your own captive insurance companies for property casualty coverage, creating conservation easements through land trusts to potentially generate both income tax credits and deductions, and for farmers close to retirement starting cash balance plans to create deductions, postpone taxes and fund retirement. These strategies are not new and not exclusive to agriculture but will most likely grow in popularity as some farmers get closer to retirement and the average farm operation continues to grow.

In summary According to futurist Jim Carroll (jimcarroll.com) estimates are that the world population will increase nearly 50 percent to almost 9 billion by 2050. As a result, he predicts a great future for agriculture. To meet the demand, he predicts everyone in agriculture will need to be more efficient. Producers will have to continue to focus on smarter, better, more efficient strategies in order to stay competitive and thrive. To do that, they’ll need to seek out professionals in many disciplines to keep them up to date on trends and strategies that can help them stay efficient, improve their profitability and achieve their long-

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term goals. Mike Moffitt is a Chartered Financial Consultant and founder of Cornerstone Financial Group with offices in West Des Moines, Iowa, and Creston, Iowa. Using his strategic partner network of professionals in accounting, legal and other key disciplines, he works closely with farmers and ag business owners on strategies that seek to help them grow their business and/or prepare for retirement. He can be reached at 641782-5577. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Advantage Investment Management, a registered investment advisor. Cornerstone Financial Group and Advantage Investment Management are separate entities from LPL Financial. Other companies and their services mentioned in this article are not affiliated with LPL Financial and Cornerstone Financial Group. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. There is no assurance that the techniques and strategies discussed are suitable for all individuals or will yield positive outcomes.

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rea farmers received a free education on grain marketing during a seminar Jan. 18 at Southwestern Community College’s Creston campus. The workshop, titled “Winning the Game” and delivered by Iowa Farm Bureau Federation and Iowa State University Extension, presented a variety of marketing strategies for farmers as they prepare for the upcoming growing season. It was sponsored by Gavilon Grain and First National Bank. “We’ve had good success with this workshop across Iowa this year,” said Ed

Kordick, commodity services manager at Iowa Farm Bureau. “This workshop has a lot of value, especially with the margin problems we’re having in crop agriculture in Iowa today.” Dean Michaelson, manager at Gavilon Grain in Creston, said his company agreed to sponsor the free public event because the past few years there have been fewer days to profitably market their grain.   “I think this workshop gives the farmers a game plan and tools to use to help them make the decision when to sell,” Michaelson said. CONTINUED ON 284

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Photos by Alex Felker/Southwest Iowa Ag Mag

Chad Hart, associate professor of economics at Iowa State University, speaks to a sizeable crowd at the free public seminar sponsored by Gavilon Grain and First National Bank. 4CONTINUED FROM 27 The workshop, which was well attended, was presented by Kordick and Chad Hart, Associate Professor of Economics at Iowa State University. It was broken up into four primary sections, each with a variety of focuses. The first was titled “Explore the key elements of a pre-harvest marketing plan,” in which the two speakers discussed what all goes into planning for sale time. “So I want to get your heads around the 2018 crop that is not yet planted,” Kordick said. “We’re starting to think ahead now – it’s January, and it’s a good time to start to make a marketing plan for that crop. What do we want out of the market? What’s our timing goals? That sort of thing.” Next, the two speakers outlined the benefits of having a pre-harvest mar-

Ed Kordick, commodity services manager at Iowa Farm Bureau, speaks during a pre-planting marketing seminar at Southwestern Community College’s campus in Creston. keting plan in a segment titled “Is there value in pre-harvest marketing?” The answer, according to the experts, is a resounding yes. Studies have shown that “having a plan pays.” “A marketing plan is proactive,” Kordick said. “It’s done before you get involved in

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the emotions of the market – before you start to think about what someone says about what the market’s going to do. It’s not reactive. And it’s not overactive.” After these two presentations, attendees were invited to play a “game” using a provided worksheet, in which they attempted to do as well as they could in a hypothetical sale situation. After the game, attendees were encouraged to outline the basics of their own potential plan, in a final segment titled “Develop your own marketing plan.” In the concluding wrapup, the presenters outlined the key points of “Winning the Game.” Kordick stressed that seasonal patterns support having a preharvest plan, that setting pricing targets and decision dates is an important initial step, and finally the necessity of simple, low-cost tools to price grain early in the plan.

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Do you have wet spots in your fields that need tile? Contact Gerald Kinyon and Sons Construction 1431 Uban Ave, Creston IA (Home)

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641-221-0061

1000 Jeffreys Drive, Osceola, Iowa (641) 342-2175 • 101 North Main, Osceola, Iowa (641) 342-2191 801 East Main, Lamoni, Iowa (641) 784-3120 Member 809 N John Wayne Drive, Winterset, Iowa (515) 462-5090 Equal Housing Toll Free: 888-342-3738 • www.americanstatebank.com FDIC Lender SM-CP0292500226

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4CONTINUED FROM 29 Sorensen quickly became a regular leader at the county fair in his time for rate of gain, showing Hereford or Hereford influenced cattle. He said he learned much from the many commitments 4-H demaded of him at that young age. His magazine business would take off much better than some anticipated. The first few issues were printed by the Adair County Free Press. Later, they were printed in Creston by the News Advertiser. Eventually, after several other stops around Iowa, and a few in Minnesota, Livestock Plus rolls off the press every month in Fullerton, Missouri. Sorensen remembers those days of printing in Greenfield and Creston well. He says they printed 2 1/2 tons of the publication. “We were printing 2 1/2 tons of Livestock Pluses in Creston, loading them in Creston, bringing them to Greenfield, then we would pack all those papers in that office and label it one at a time, package them and bundle them into zip codes, re-bag them, haul them all back out to the truck, to the post office, then into the post office to mail,” he said. “I figure I handled 2 1/2 tons of books at least five times before they hit the mail. Now, we hit the button, and kerbang,

Caleb Nelson/Southwest Iowa Ag Mag

Mike Sorensen of Greenfield shows off some of his back copies of Livestock Plus, a magazine for the livestock industry that traces its beginning back to 1995 in an office he had just off the square in the Adair County seat.

kerbang, it gets mailed out.” Sorensen’s daughter, Heidi Rohrig, was an ag business student at Northwest Missouri State University in those early days. It wasn’t until later that Livestock Plus would evolve into looking like a glossy magazine. At first, it looked like a small newspaper. In January of this

year, the publication put out its biggest edition to date with 164 pages. In the beginning, it printed about 2,000 magazines a month. Now, more than 15,000 copies are printed monthly. “What would happen [in those days] is the grandparernts, great-grandparents and friends would all get together and we’d bulk mail them and take them to the post office a little at a time,” Rohrig said. “It was fun because everybody chipped in.” Sorensen and his wife, Dixie, will celebrate 46 years of marriage this year. They have three adult children and seven grandchildren. Rohrig is a sales representative with Livestock Plus. Ray “Bubba”, their son, is at the center of the Freedom Rock project, which aims to have a uniquely painted rock in all 99 counties in Iowa and all 50 states before it is complete. Their other daughter, Mandi Eisbach, is assistant manager at HIM and works as a medical coder at Adair County Health Systems. “I’ve traveled this dad gum world, and I think we covered 204 sales in one year’s time,” Sorensen said. “That means that I or one of my staff is at a sale two-thirds of the year. “We hope we’ve made some kind of an impact on somebody. We have our own little cattle operation here, too, and are selling cattle out of here trying to make that work also.”

Advertiser Index ADAIR COUNTY MUTUAL INSURANCE .....22 FARMER’S NATIONAL ..............................18 OSCEOLA FARM & HOME.........................21 AGRIVISION EQUIPMENT GROUP .............12 FARMERS ALL RISK.................................27 PREFERRED PROPERTIES OF IOWA.........25 ALADDIN MANAGEMENT .........................23 FINANCIAL MARKETING SOLUTIONS......13 SNYDER PLUMBING.................................29 AMERICAN STATE BANK..........................29 FIRST NATIONAL BANK ...........................20 SOUTHWESTERN COMM COLLEGE ..........23 B & K COMM AGRI LTD ............................25 FREEDOM CREEK PRAIRIE LLC .................2 STALKER CHEVROLET INC .......................32 BIG BOYZ TOYZ ..........................................5 GERALD KINYON CONSTR LLC ................29 STATE FARM INS/JOHNSTON ..................25 CITY STATE BANK ....................................19 GLENDENNING MOTOR CO ......................10 TAYGOLD COOPERATIVE ..........................29 CLARKE COUNTY STATE BANK ................27 GRACELAND UNIVERSITY ..........................3 THOMAS QUALITY FARMS.......................27 CRESTON AUTOMOTIVE .............................6 GREAT WESTERN BANK...........................25 TYLER INSURANCE SERVICES ................21 CRESTON CHAMBER OF COMMERCE ........9 HIGHWAY LUMBER ..................................24 UNITED FARMERS COOPERATIVE ............11 CRESTON LIVESTOCK AUCTION INC ........24 HUNSICKER & ASSOCIATES.....................26 VETTER EQUIPMENT CO .........................31 CROP PRODUCTION SERVICES ................15 IOWA REALTY/OSCEOLA..........................26 WENZIG CONSTRUCTION CO ...................28 DELTA METALS ..........................................4 IOWA STATE SAVINGS BANK ...................22 WILBUR ELLIS ........................................14 F & M BODY SHOP ...................................20 JP AUTO SUPPLY .....................................28 FARMER’S BANK .......................................9 LAMONI LIVESTOCK AUCTION INC ..........27 30 Spring 2018


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%

FINANCING*

At the Case IH Spring Sales Event, you’ll find new Farmall®, Maxxum® and Puma® series tractors – along with our complete line of hay tools – at a special rate. But hurry, because like spring, this deal will be here and gone before you know it. Stop in or visit us online at caseih.com/spring3.

* For commercial use only. Customer participation subject to credit qualification and approval by CNH Industrial Capital America LLC or CNH Industrial Capital Canada Ltd. See your participating Case IH dealer for details and eligibility requirements. Down payment may be required. Offer valid through May 31, 2018. Not all customers or applicants may qualify for this rate or term. CNH Industrial Capital America LLC or CNH Industrial Capital Canada Ltd. standard terms and conditions will apply. Taxes, freight, set-up, delivery, additional options or attachments not included in price. Program subject to change or cancellation without notice.

See Your Local Vetter Equipment Location for More Information 1020 S 12th St

2503 Hwy 2 E

9983 Hwy 92

1703 W South St

1308 W Ferguson Rd

712-542-5147

641-872-2000

515-961-2541

641-464-3268

712-246-1187

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www.vetterquip.com

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