Planting Progress 05/25/19

Memorial Day is a traditional goal for completion of planting. Not only is this a harbinger of good yields, a guilt free three day weekend to reflect and recover from another rock picking, fertilizer applying, crop planting blitzkrieg is a great way to kick off summer.

They say no one bats a thousand, (what do they know?) but lacking evidence to the contrary, I will borrow that euphemism to be at peace with our lack of progress.

As of 5/24/19, 100% of corn, 70% of beans and 86% of total acres are planted.

Despite being behind our normal pace, we are well ahead of the national average. We were lucky enough to have a couple 4-5 day windows suitable for field work. There are many locations that have not had a single day to work all month.

In addition to having the opportunity to work in the field, we made the best use of those moments. Every operation set new benchmarks for daily productivity.

The rock crew, led by Alex, juggled skid loader breakdowns and erratic forecasts to cover more acres and harvest more loads of rock than ever. For the first time in 4 years, I never had to assist with a “stuck rock wagon” extraction. This alone can be a half day ordeal.

Ben’s agronomy team stayed comfortably ahead, or behind, depending on the product label timing, but always within tolerance for best application results. This crew earned the “Drama Avoidance” prize for their no non sense, low maintenance, dawn to dusk consistency.

Jim was lucky to have the most experienced and capable Tillage Team in recent memory. With as many as five machines running simultaneously and several going round the clock, we met the goal of staying a day ahead of the planters while meeting specific seed bed preparation standards.

The planting crew of Bert, Donavan, and Andy showed what is possible when technology, operator skill, and thoughtful planning collude to maximize output. They averaged 10-15% more acres per day than our previous best.

High speed planters have been around a few years but I was skeptical of their claimed capabilities.

Skepticism obliterated.

Having put this challenging season in perspective, we can still appreciate the present this Memorial Day.

Like the inspirational message on the rustic wood, wall art sign I purchased for Linda for Mother’s Day says, “Life doesn’t have to be perfect to be wonderful.”

Jim

Irresistable Forces

I do not watch TV much but over the years I have noticed a recurring theme among ads developed around the idea that behavior tends to be age, gender and occupation specific.

Yes we are unique at the individual level. However, there is truth in the generalizations made about Midwesterner’s, Gen X’ers, diesel mechanics, Lutherans, soccer moms, and retirees.

As sample size increases, undeniable patterns emerge.

And I am beginning to act my age.

When I was younger, the path to success seemed like a minefield where every misstep was potentially fatal.

Financing a growing farm with little equity and zero room for error, providing adequate care to livestock living in semi primitive shelter during extreme weather, overcoming a deserved local reputation for expecting too much and pushing too hard, keeping my mischievously predisposed offspring out of prison. My life plan was constantly at risk from bad behavior, poor choices, disorder, and limited resources.

Meanwhile, two generations up the totem, worries seemed to consist of wishing it would stop raining so the lawn could be mowed, wondering if the Twins will make the play offs, and angst over when the Wapsi would get stocked with trout.

I was dismissive of a life lacking hurricane force adversity. How could a person be satisfied with a such a docile existence and what is the adventure in that?

Now, the top chores on my daily project list include tasks like wash bay inspection, car stereo repair appointment, meeting with accountant, and Fitness Club by 4:30, (underlined and exclamation!) Today’s battles seem less epic.

Priorities such as winning the grand child birthday gift competition, deciding what tie goes best with my dark suit at Easter Mass, or getting to Sweet’s in time for mid morning coffee conclave, are not yet dictating my daily routine.

But this appears to be the direction I’m headed.

In keeping with my glass half full outlook, I will file this observation in the “Indicators of a life well lived” folder.

Or maybe after 60 years of life, I decided that other stuff was less important.

Jim

4/1/19 Update

Since taking over the reins at Pinicon two years ago, the new owners have come to realize the added responsibility of ownership also brought a new set of time obligations. This was leading to an agenda dictated by the urgent at the expense of the important.

Fortunately, with four pairs of eyes scrutinizing Pinicon’s daily operations, little goes unnoticed.

After several months of dialog and brainstorming, Leadership decided on a plan to address the deficits, promote and develop existing Team members, and improve the efficiency of the administrative department.

The centerpiece of the new organizational structure started with two promotions.

Alex will become Operations Supervisor while maintaining overall financial oversight as CFO.

Lindsay will become full time accounting specialist, supporting Alex in the financial department.

With Alex allocating 60% of his time to Operations oversight, he will be bringing 30 hours weekly to a position that had been non existent.

Lindsay’s data entry skills, ironically, will give her a productivity advantage over Alex in the short run. In addition, she is taking online accounting classes to strengthen her understanding of accounting concepts.

Post re organization, the finance department will have a 50% increase in FTE. We believe analytics are the next frontier for efficiency gains and we need to bring more resources to our activity analysis.

To fill Lindsay’s shoes in the front office, Morgen Scheer was hired as our new receptionist and data entry person.

It is always exciting to add a new member to the Team. The best hires bring new skills and idea’s for doing the same tasks easier. After only three weeks, we can see Morgen will be good.

The S.A crew is arriving this week which means Alex will be totally immersed in Supervision. It’s sink or swim time!

Most of the equipment is ready and the 2019 Production Plan just needs a few tweeks due to several late season farm additions.

It seems safe to estimate we should get in the field the last half of April, however in the spirit of caution, I put 70% odds on that outcome.

Maybe the gods of fate will appreciate my conservative forecast and reward us with an early start.

Jim

Disagreement is Good

The other night Linda and I started out the weekend at our daughter and son in laws for happy hour.

For the record, neither of my offspring were female.

Feeling ebullient after winning the Biggest Loser competition with his dad and brother, Nick had the swagger to challenge me to a debate on the President’s latest security infrastructure initiative. .

Despite occasionally interrupting each other, raising our voices, making provocative assertions, and becoming mildly frustrated at each others inability to get it, we ended the conversation respectfully, agreeing that the correct answer depends on your point of view.

There are objective realms where determinate reality exists. Rock brakes scissors, water changes state at 100 degrees centigrade, photosynthesis requires sunshine, and the Vikings will never win a Super Bowl.

There are also subjective worlds, where reality equals perception, aka “a mental image.”

When reality becomes a construct of the gears between or ears, results will vary.

Beyonce or Black Sabbath, vegan vs. paleo, christian or agnostic, Patriotic swamp draining mega successful champion for the common man or sleazy self promoting obnoxious over rated phony?

The mental images we create are influenced by life experience, gender, hormones, personality, race, and a multitude of other factors. Perceptions will be as unique and varied as cumulus clouds, or more precisely, people on the planet.

Though we tend to forget, it is well documented that the resilience of life is enhanced by the nearly infinite number of outcomes which can result from the combinations of our DNA.

Physical diversity among the human population is key to our survival. Intellectual diversity is equally important.

So the next time you become annoyed when you encounter a person with a different point of view, imagine how one dimensional, barren, and flavorless life would be if we all drove the same road to work, dressed the same, performed the same task for the same pay, and spent this homogeneous existence with identical thoughts in our heads.

Speaking for myself, I am darn grateful everyone does not think like me.

Jim

Mid Winter Report

Winter has finally arrived in North Iowa and I am almost ashamed to admit I was secretly hoping for the “Polar Vortex of the decade.” This is all my fault.

When brutally cold temps and accumulated snow conspire to turn every day into “Arctic Survival Boot Camp” life in this part of the world can be a struggle. A mild winter should be a thing to celebrate.

Yet, it is the contrast of the seasons that makes living at this latitude special. For me, the joy that comes with that first green grass, blue sky, seventy degree day is born in the depths of winter.

I have also seen sufficient evidence to persuade me the climate is changing. If in the next 50 years, our weather starts to resemble Kansas City more than Rochester, there will be adverse consequences to our farming operation.

Possibly, researchers predicting dire climate change impacts in the near future are catastrophizing. Maybe the rate of global warming will be gradual enough that technology will give us the tools to adapt with out creating widespread disruption and suffering. Or maybe I should adopt the “not my worry” advice of John Maynard Keynes who famously remarked, ” In the long run, we are all dead.”

So it gives me a sense of relief when the National Weather Service predicts 6-9″ of snow and potentially record cold. This is the kind of January I grew up with.

As I head out for my Sunday afternoon, five below zero, snow jog, I will be encouraged by the cold sting on my cheeks, the shiver in my limbs, the crunch of the snow on my boots and the visual clarity of the frigid air.

Old fashioned winters are OK with me.

Jim

Making Every Day Good

It has been said that every day is a good day, if you know what to do with it.

At Pinicon, it is relatively easy to do this nine months a year. From April to November, the feasible and worthwhile project list exceeds the supply of labor. The more difficult decision is recognizing which effort has the most value.

However, in mid January, when the days are short, the ground is frozen, and your ambition wants to go on sabbatical, keeping the entire Team constructively employed can be a challenge.

Fortunately for us, potentially beneficial initiatives are so numerous that improvement is a year round activity. Besides, the guilt we would feel for temporarily “punching out” would be severe. ( Guess my spiritual tradition.) Working on that.

As most of our operators work up to 3000 hours annually, cutting back to four, 9.5 hour days per week is the first step in increasing the value of our time during the winter. By the end of the week we still get 90% of the work done on 80% of the hours.

The existing shop has six separate, distinct work areas plus a wash bay. With coordination, 8-10 men can share this space with out getting in each others way.

Our equipment fleet gets bigger every year. Combines have more capacity, tractors have more power, planters and tillage machines go faster and get wider. Yet we need more of all of it.

My point is not so much the expansion of the fleet but the need for upkeep. Whoilla! We just happen to have the trained full time staff and a facility to accommodate them.

Fourteen years ago when Calvin started, he was sole administrative person with an office. He spent 60% of his time in that role. He was also head tile repairer, fertilizer tender driver, ammonia hauler, and dryer chief.

In 2019, there will be seven personnel with significant administrative duties and dedicated work stations. They have some outside responsibility as well but their primary duties are administration and accounting.

The day is coming when desk jobs outnumber machine operators at Pinicon. We are not there yet but we do have functional space for the current needs with out moving Ben into the corner between the north shelf and guard rail of the mezzanine.

As the volume of on farm storage has grown, it has become impractical to deliver all our grain during the summer. With a minimum of 100K bushels getting shipped every month, there is steady work for a handful of drivers. This essential task helps fill the daily assignment plan with out dictating priorities.

Education and staff development is easily the highest value off season effort. The affect this has on safety, retention, quality control and the bottom line cannot be over stated.

Thursday, January 10th. 18 full time staff in attendance, 1.5 hours of classroom instruction, proprietary Pinicon Farm, Version 4.0 content, followed with shop tour and Q and A. Back to work afterwards with a renewed sense of purpose and professionalism.

It was a good day.

Jim

Celebrating for the Right Reason

The 2018 Pinicon Holiday/Partner Appreciation party was held this weekend. The date was moved up from the first weekend after New Years to get ahead of Holiday season party fatigue, potentially brutal January weather, make Christmas bonus distribution more timely, and celebrate with our South African workers before they return home.

I would like to take credit for seeing all these advantages but it was the HR department that saw this opportunity and made the recommendation back in August. Danni and Lindsay also took the lead in planning the location, menu and invites.

In the past, I was reluctant to commit to having a party until harvest was completed and financial statements prepared. In my mind, being festive and grateful was contingent on profitability. Until the asset and liability totals are updated, knowing how much progress or regress occurred the previous season is a coin flip. Planning a party without this knowledge was presumptuous.

Well Jim, maybe you were seeing it wrong all those years.

Success today and more so in the future, will be a collaborative enterprise. Not only do we require a team of professionals employed by Pinicon as operators, technicians, bookkeepers, compliance specialists, agronomists, and purchasers, there is a network of vendors, service providers, advisors, and peers we rely on to source inputs, build and maintain infrastructure, and develop strategy.

As the challenge to recruit, retain, and sustainably motivate an organization has become more difficult, tangibly communicating gratitude and respect to everyone that plays a role in your business is vital. Relationship investments should not depend on short term price dynamics any more than stewardship of the land should be compromised due to cheap commodities.

And it took a couple of 30ish, female, administrative staff to open my eyes.

Thank goodness for diversity and youth.

So, regardless if Pinicon made money in 2018, we sincerely appreciate everyone that is part of our association of partners. Our company simply could not exist with out the combined contribution of all the people we employ or do business with.

In the next few weeks, we will have time for the financial analysis. Our best guess is that we will make progress. Either way, we remain confident in our long term success because we have an exceptionally talented group of partners with a vested interest in our future.

Jim

Ode to Perseverance

As we wrap up harvest for 2018 and take inventory of our progress, I am reminded that more often than not, it takes years for a particular goal to be reached or a new strategy to demonstrate its value.

The Pinicon “Better Methods Discovery Quest” is littered with exciting idea’s discarded by harmful side effects, pessimism, unrealistic expectations and insufficient resources. Whether they were legitimate dead ends or game changing innovations a couple years beyond our limited problem solving abilities, we’ll never know.  This blog is about two times persistence was rewarded.

In the early days, poor soybean farmers we were. Despite our adoption of the prevailing best practices. We could not make money growing beans.

We experimented with numerous systems in our effort to improve profitability. Different row widths, planter configurations, tillage, varieties, soil amendments, and marketing strategies were tried.

Gradually yields improved but we continued to explore alternative production methods, often times at the risk of going backwards in the short run. When you only get one chance to grow a crop every 12 months, it can take years to recover a large single season setback.

In the last few years, trends became apparent. Row width is over rated. Lower populations outperform higher populations, to a point. There is a strong correlation with high yields and early planting. If soybean production was an Olympic sport, hog manure would be a banned substance.  Drainage, drainage, and did I mention drainage?

Utilizing this experience to fine tune our bean production system, the current emphasis is on timeliness, variety selection, fertility, identification of “never beans” farms, and farm specific tillage.

In 2018, using row width and tillage practices common in the 70’s, we smashed our previous bean yield record. This was accomplished on a larger total bean acreage than we have ever grown. 98% of the crop is in company storage, and 70% is forward sold.

Despite the trade war and burdensome oversupply, this works for us.

In 2014 we decided to hire two H2A workers from South Africa. Finding help locally that was willing to work extended hours during planting and harvest was becoming difficult. Competing with non ag job opportunities on a per hour level was expensive. We would be the first in our area to bring in foreign workers. Local backlash was a real risk.

We knew other farm operations had success with this option but every situation is different. Our expectations for our workers are high. Keeping the machinery going was not the issue. Could we find honest, hard working individuals who took pride in their work and embraced our culture?

Theo and John arrived in early April. It took several months to get them CDL’s, locally orientated, fully furnished houses (H2A rules employer provides housing) and personality conflicts resolved.

After the first year we determined it would take a season to get the typical H2A employee trained into our way of doing things. If we could get them to return a second year they would have the experience and local knowledge to be qualified for our Team.

In 2015 we doubled down and brought in five H2A workers. Turn over among this group was over 50%. By the end of 2015, only one of our original 2014 hires remained.

If this was going to be a sustainable strategy, reducing the drop out rate was essential for developing the skilled, quality workers who could meet our standards.

Fast forward to 2018. (already?) Our South African contingent of Gerhard, Deon, Dirk, Jaco, and J.D. are collectively the best class of H2A workers to date. Their productivity, job skills, and judgement rank them on the first team of Pinicon employees.

To paraphrase my opening statement, even good idea’s will probably take longer to reach fruition than you expect. In the absence of dogged determination, many successful remedies will never be realized.

Ironically, this truism comes with a caveat. While perseverance has been an essential aspect of our drive for improvement, we have also become quicker to recognize when to cut our losses.

Success in business requires finding that balance.

 

Jim

Will We Ever have Another Drought?

I did it. I am daring the Masters of the Universe. Blame me when the rivers and wells go dry, vegetation turns to tinder, and the ensuing Dust Bowl envelops the Corn Belt.

But do not hold your breath waiting.

Look up the Iowa Annual Weather Summary for the years 2013-17. State Climatologist Harry Hilaker compiles temperature and precipitation records for each county. Based on his data,  Mitchell and Howard Counties averaged 7″ more precipitation than normal for this five year period.  2017 was the driest year with rainfall matching the long term average of 35.”  2016 was the wettest with 17.5″ above normal or 52.5″.

As weather calamities go, drought has the celebrity. It is the 13% possibility of a drought in any given year that causes the typical growing season rally. I am always puzzled at farmers and traders willingness to bet on an event with such low probability.

The reality is more damaged is caused by too much rain. National yields are highest following growing seasons with abundant rainfall. However, here in North Iowa, it is the chronic and persistent impacts of erosion, nutrient loss, and reduced yield from excess moisture that collectively do the most harm.

Not one to play the “hapless victim card”, I look at these trends and ask, what can we do to mitigate the effects of too much water, preserve the soil, and achieve yields needed to stay profitable?

Quite a bit, actually.

If there was ever a question regarding the value of 40′ lateral tile spacing, in our minds, this debate is over. Compared to farms with 80′ spacing, we are seeing a 5-10% yield advantage, depending on the soils. Additionally, the improved speed with which the soil recovers has operational benefits allowing us to get back in the field sooner after heavy rainfall events.

With a few exceptions, we have stopped applying NH3 in the fall. Instead we are split applying urea either just before planting or immediately after planting, and again pre tassel or late June. We observed that with more rain and warmer weather, ammonia was being leached from the soil and was not available when the plant needed it. For many years the practice of applying nitrogen as ammonia in the fall worked well. This was our preferred method. No longer.

For corn fields going to beans the next season, we now use a vertical tillage tool in the fall followed by a soil finisher in the spring for seedbed preparation. Our experience with no till in our heavy, wet soils led us to conclude tillage was needed to get the best yields. The vertical till/soil finisher systems achieves nearly identical residue cover and erosion reduction with out the weed control, compaction, and trash management challenges that come with no till.

Every year we install more waterways, surface water diversions, headland berms, and other structures to slow down and reduce the flow of surface water on our farms. By experimenting with different structure designs over the years, we have developed an assortment of strategies for minimizing surface water damage. In situations where the frequency and volume of surface water has reached a level requiring intervention, we can usually come up with a cost effective solution that handles the water and maintains the farmability of the land.

These are a few examples of how we are adapting to the changing climate. We expect recent rainfall patterns to continue so we are making the necessary land improvements and system adjustments to maintain our farms productivity.

Speaking of rain, it looks like the most recent two week wet spell has run its course. We are close to one third done with harvest. Combine, tillage, and fertilizer operations should all be running by the weekend.

The Team has performed very well so far. No major mental errors or bad luck. The Honey Crisp apples in our carefully assembled sack lunches have been a treat!

Only six weeks till Thanksgiving. We might be having our turkey dinner in the field.

Would you like a side of bee’s wings with your dressing Ben?

Jim

How We Got Here

Pinicon had the 2018 Pre Harvest planning meeting last week. As you can imagine, the format has evolved over the last twenty years.

The first gathering had eight in attendance, all white, male and born within 50 miles of McIntire. I would have scribbled a page or two on my yellow legal paper, listing goals and broad strategies. Get the crop harvested before the snow flies. Don’t fall asleep on your 36 hour shift and run the combine through the fence. Odds favor a bad ending if you loose control of a 500 bushel wagon at 25 mph because the hitch pin bounced out. Basic, common sense stuff that get’s fuzzy under extreme duress.

The 2018 version was presented in Power Point on a 50″ flat screen to a diverse, multi national group of attendees. Danni, our “Senior Content Producer” built the presentation from the final 23 page document Bert dictated to Lindsay. With Bert’s direction, Lindsay assembled the Harvest Plan booklet which is distributed to leadership..

From the table of contents to the Fall Farm Improvement list, it is a comprehensive over view of fields, expected production, logistics, storage locations, Team assignments, fertilizer application, tillage operations, and strategy.

The “Harvest Plan” has become embraced as the blueprint for a safe, coordinated, efficient and profitable last chapter in our production cycle.

If only I could find a way to institutionalize environmentally considerate office thermostat set points and incinerator trash separation, I could die a happy man.

As always, excitement for harvest is high. It will be the second crop for the new ownership Team. Even though there are numerous short term threats which will make achieving profitability difficult (rising interest rates, tariffs, chronic over supply, prices below the cost of production), Bert, Ben, and Alex are gaining confidence in our model.

Past emphasis on land improvements, judicious growth, lean methods, diversification, and building trust with our partners taken together provide that incremental boost that allows us to keep our heads above water.

The next few months will pass in a blink. I will do my best to keep you informed of our progress.

With steady leadership and friendly karma on our side, I expect to be able to report completion of an accident free and abundant harvest by Thanksgiving Day.

Seriously, your interest and support make a difference. We appreciate it!

 

Jim