Path Home Shows 2014 Show Archive October 2014 Show 1440 Oklahoma’s Young Farmers and Ranchers

Oklahoma’s Young Farmers and Ranchers

Two young farmers and businessmen speak out about life down on the farm.
Oklahoma’s Young Farmers and Ranchers

Oklahoma’s Young Farmers and Ranchers

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Show Details

Show 1440: Oklahoma’s Young Farmers and Ranchers
Air Date: October 5, 2014

 

Transcript

Rob McClendon: Well, joining me now is Mason Bolay and Marty Williams who are part of Oklahoma Farm Bureau’s Young Farmers and Ranchers program. Well, first of all, thank you both for being here.

Thank you, Rob.

Rob: If I can, I’d like to share some statistics with you I got from USDA. The average size of a farm is 414 acres across the U.S., and the average farm has a cow herd of about 44 cows, very small for Oklahoma standards. Now, if you figure in that the average acre sells for about $2,000 and the average beef cow sells for about a thousand dollars, when you add all that up, that’s right at a million dollars and that doesn’t even include the cost of equipment. Now my question to both of you is, when you’re talking about that much money, over a million dollars just to start in a business, how do you do it as a young farmer?

Mason Bolay: It’s difficult. Being in the banking industry and the farming industry I can understand both, that when someone comes in and says I want to get started farming, and by the way here’s the list of equipment and the things I want to buy, you have to start small and grow. Things that grow slower tend to grow a little better.

Marty Williams: I was very fortunate. I was very focused when I got out of college, and I went back to the farm and kind of started building some assets with my father. And so the key to my success in building my farm was to borrow when you can the expensive assets. Renting ground to start with is always cheaper than buying. And slowly building a herd, a cow herd, and such as that. But yeah, the capital investment that it takes is really prohibitive sometimes for a lot of young people getting into farming.

Rob: Yeah. Now you mentioned both of your families. Another figure, 35 percent of Oklahoma farmers are over the age of 65 which means they’re getting close, if they are not already thinking about retirement. Do we need more young farmers?

Marty: I am of the opinion that yes, we definitely need more young farmers. I’m in an area, north central Oklahoma, Noble County, where there have been very few young farmers that have come back to the farm, mainly because of the large farms that were already in place, so the availability of land and the things that you mentioned all the older gentlemen were already more established, well-versed and could rent the ground or buy it and afford to. We definitely need to get more young farmers because I am in a position where I’ve become established and grown. But I’m kind of maxing out what I can do as an individual and even with employees. You can only cover so many acres efficiently and effectively enough and good enough to produce quality crops. And so there needs to be more of us on board and more of us out there to support the amount of acres that are available to farm.

Mason: That’s right exactly. We can’t – it’s just like in any business. Whenever you have people retiring, you have to have someone replace them. Even with technology and the amount of acres that we can cover, everyone has a limit, whether that limits you personally, the amount of employees you have, at home. And basically echoing what Marty said, that yes, we do have to have more young guys coming back and getting involved in agriculture.

Rob: Now we’ve seen much of a rural renaissance in, across the U.S., in rural America with record high commodity prices, but also at the same time, record high land values in part because of that record high commodity prices. Kind of a double-edged sword?

Mason: It can be. Record high land prices, record high grain prices normally equal record high inputs. There’s, the margins are better, but they’re still slim. I mean, there are times right now we’re selling fat cattle for what, we’re buying light weight cattle for what we used to sell fat cattle for. And those kind of numbers, there’s a lot more money at stake. You know, operating lines of credit are growing and, but we’re still operating on the same amount of acres. So, example, rather than a hundred dollars worth of input cost, it’s now costing $200. You’re doubling what it costs, and your margins are still the same.

Marty: The best way to do that, look at economy as scale. If you can take your fixed, your fixed expenses and spread them out over more acres or something like that, that’s the quickest way to become more efficient and be more profitable. But, yeah, it is really tough.

Rob: I want to touch on something that you mentioned and that was about technology in farming. Once again, kind of a double-edged sword. One person like you can do something that it took 10 people to do 50 years ago. What does that mean when it comes to our rural communities with maybe not needing as many people down on the farm to do the job?

Marty: That’s one of the things that has happened. And also you’ll notice that there are a lot of older gentlemen, older farmers that are staying in it longer because of the technology. You know you sit a gentleman on a tractor with auto steer and GPS when he was 70 years old. Looking over his back all the time to make sure he was staying in the right spot in the field, it was hard on him. But now he can look ahead with confidence and set on a tractor longer. So technology has made a difference in what I can do in one day, definitely cover a lot more acres. And new advances in chemicals and computers and fertilizers and the way that we apply those have really helped speed up a lot of the process and how many acres we can cover in a day.

Mason: That’s right, we, you know the technology we buy is expensive but with variable rate, even you know soil testing, those are things that were maybe in the past overlooked. You look at over, you know, GPS, you know, spread fertilizer all day and we ran some numbers on if you’re overlapping 2 feet, we could pay for a whole new auto steer system with the acres we were covering. You know that’s an expensive cost upfront, but with our younger generation coming back to the farm, and we can pencil that out and show Grandpa or show Dad that hey, we need this, and we can save that amount of money by not wasting the fertilizer. And it’s essentially good for everyone, which when we use less, that means that we don’t have any overlap running off into streams, creeks, lakes that essentially end up in the food chain.

Rob: Certainly. Give us some idea of just the cost of some of the equipment we’re talking about here.

Mason: The equipment can vary. You know, today, you, there’s a lot of equipment out there, and a quick search on a tractorhouse or fastline will show you that there are thousands, hundreds of thousands of pieces of equipment, and it all varies. Like Marty said, the economy of scale is how big are you and how can you, or how small are you and what can you afford to spread out over those acres? You know you can look at a new combine with a header you know at a half-million dollars. But, you know, in our operation that’s not cost-effective. So we look at a used combine and go a different route with that. So there’s literally combines from $20,000 all the way up to a half-million.

Marty: In my operation, you know, we’re able to justify a $200,000 combine, a harvester or a $250, $300,000 sprayer and fertilizer applicator. But we can’t justify a $200, $300,000 tractor, which, they’re available. So, so we downgrade because they get a lot less acres now in the no-tillage system that we’re in. And we focus more on, you know, our $100,000 planter is much more important to us and, it can be pulled by a $30,000 tractor.

Rob: Before you came here, I was looking at a survey that your own organization did about the things that young farmers are concerned about. And No. 1 was red tape, and No. 2 was the availability of land. What else are you concerned about?

Mason: There’s a whole long list. I would say health care. You know, we’re just like everyone else, farmers out there. Fortunately in my job we offer that as a benefit.

Rob: Your job as a banker?

Mason: Yes, that’s correct, and so that’s one of my limiting factors of going back. Health care is so expensive, and the cost of it to pay per month to have a family because we all know everybody needs a doctor. And that would be one of my limiting factors.

Marty: The red tape and the bureaucracy of the individuals making our laws on Capitol Hill that dictate our farm bills and such. We have some great people up there, but there are very many of them that are so far removed from the farm, it scares me. They don’t understand what’s going on, just – they’re making decisions for what I do on a farm. I’m not trying to make a decision for what they’re going to do in a high rise building in New York. And so that’s a broad statement, I guess, and kind of radical, but it does concern me. The other thing that concerns me, I am concerned about health care. My family, I have to provide insurance for myself, I’m self-employed and you’re looking at a thousand dollars a month just for a small family to have health insurance. And that’s very tough. I’ve got employees that I can’t offer health insurance to because it would costs me a lot, and they’re having a tough time paying for that even at what we feel like are good wages that we can give them, so that, that really scares me. The availability of land doesn’t really bother me that much because I feel like there’s a time when all of that is going to shift from the older generation to the younger generation. There’s going to be a few good operators, that are probably in their 40s and 50s now that may miss out on that land shift. But the land’s available, I feel like.

Rob: And Mason, how do you work, having a daytime job at the bank and then farming at night?

Mason: Like Marty said, there’s always something to do. In our family we say, if you can’t find anything to do then you’re not looking hard enough. I mean, there’s always bearings that need checked, fence that needs fixed, and so I typically start, you know, in the morning, we get up around 6:30 and go feed cattle, come back, change clothes, go to the bank, work at the bank. And then in the afternoon, I go back out to the farm and stay. And that was one thing, I also, like Marty, married someone who was not from a farming background but enjoyed the idea and maybe didn’t quite fully understand it. I don’t know that anyone can really grasp what we go through as a farm family until you actually get out there. There’s some things that – I say the best part about our job is farming with family and the worst part about our job is farming with family. You know, I farm with my dad and my brother and his brother and my grandpa. And we all have, you know, Sunday lunch, Christmas dinner, but we’re also all business partners. And that can be really stressful on a family, and I don’t know that my wife really understood that. The same with the time commitment. You know, there’s grain that needs to be harvested and cattle that need to be checked and that essentially affects our bottom line, that if we don’t go and take care of those animals or don’t go take care of those crops at timely, even if it’s on the weekend whenever the rest of our friends are going on vacation or going to the movies, going to the ballgames, you know, we’re, we’ve got to go take care of our, our business. And a good story on that is, when my wife and I were dating, her family asked, they said, “Well, don’t you ever take a day off?” And she said, “Take a day off? They work on Christmas.” And so we, you know, there’s just times there that the farm calls.

Marty: It’s tough to schedule a vacation. You know you mentioned that. We schedule our vacations around rain. If it rains one night, we’re ready to go. We don’t make hotel reservations. We go on vacation. One thing that’s different between Mason and I, I was a horrible employee. I tried to work outside of the farm for a, six months. And I had a hard time going to work at 8 and shutting off everything. I’m not saying you shut it off, but it’s hard to shut off and work another job, and you’re worried about what is happening on the farm and your assets out there and what is going on. So I admire Mason. He’s able to get up, go to work, shut it off for five, six hours, eight hours, and then go back to it. And that would be tough. That’s why I chose to get out of that and stick with the farm.

Rob: Well, gentlemen, I certainly appreciate what you do. And I appreciate both your insights. Thank you so much.

Thank you; you bet.