Scythe & Spade Blog

Cultivating Mindset Needed for Growth & Success

by Monte Nevitt

At Texas A&M’s TEPAP (The Executive Program for Agricultural Producers) a couple of years ago one of the presenters shared the principle that hog producers need to quit thinking of themselves as pig farmers and to start recognizing their larger more strategic role as a manager of manufacturing plant of a live food based product.

I found the comment to be of interest at the time. In retrospect, however, the thought can withstand a semester’s worth of development and study. This thought came to mind this week while reading an article from the “Masters” by Jim Rohn. At a time when I generally push material, information, emails, and texts away as I work on information overload in attempting deal with the highest priorities in life – this article entitled “The Miracle of Personal Development” is worthy of a pause in our busy schedule to contemplate.

Rohn touches on the shift in mindset that is needed in order for us to become more successful in our business. The thought deals with the critical need to reinvent ourselves and our attitudes in making room for the changes that success brings.

Here are a few of the highlights of Rohn’s article:

• Income rarely exceeds personal development.
• Sometimes income takes a lucky jump, but unless you learn to handle the responsibilities that come with it, it will usually shrink back to the amount you can handle.
• If someone hands you a million dollars, you'd better hurry up and become a millionaire.
• A very rich man once said, "If you took all the money in the world and divided it equally among everybody, it would soon be back in the same pockets it was in before."
• It is hard to keep that which has not been obtained through personal development.
• So here's the great axiom of life: “To have more than you’ve got, become more than what you are.”
• This is where you should focus most of your attention. Otherwise, you just might have to contend with the axiom of not changing, which is: “Unless you change how you are, you’ll always have what you’ve got.”

In short – farmers are among that elite group that stares down the federal government in adapting to evolving regulation and technology – in continually finding ways to provide a return, not just for themselves, but to provide employment, educational opportunities, and quality of life for employees and their children. Farmers are the perpetual optimists who endure weather and tough times to find ways to continue to feed America. In that quest to remain profitable, however, we’re reminded of the need to allow our thinking to evolve to create emotional capacity to deal with future success. There is a very real possibility that our lack of vision costs us far more than periodic setbacks.

Shortage of Phosphorus

by Jeri Engstrom

After years of worrying about running out of oil, water, and arable land, it has come to our attention that that there is a new shortage on the horizon, that of Phosphorus. The mineral phosphate comes from phosphate rock which is consumed at the rate of 17 million tons annually on a global basis. To make matters worse, phosphate is located in only five countries on the planet and only 12 mines in the U.S. Below is a link to a very interesting article to read and get the full story. Arizona State University is doing a great job in researching this story, please check it out at:

Sustainable P Initiative

Blog #27 - 8/20/10

by Chas Bonner

SPECIFIC vs. GENERAL

At times, we become concerned that there are too many blogs that do not pertain specifically to farming or ranching. Rather, they are very general in nature, and don’t apply to a cotton, wheat, or corn farm, or any ranch property. But when thinking further about that, perhaps we are not the ones to tell you how to operate your farm, but can only make suggestions after review.

Therefore, our blogs are and will continue to be more general in nature, and hopefully of interest as they carry many different messages, and different authors. Most important, we believe they are applicable to any and all farm/ranch operators.

Today we will focus on teams and teamwork. Even if just a husband and wife team operating the farm, it is still a team. Furthermore, every farmer has teammates when considering bankers, attorneys or accountants, whether or not he likes those teammates.

Almost by definition, teamwork entails collaboration. If the team leader continually voices his opinion rather than asking for other ideas first, soon most expressions will mimic the team leader. That is human nature. Instead, the leader might first engage others to learn their assessment, and not voice his own until all team members have been heard. Rather than expounding on his ideas, the leader can learn much more by asking questions, seeking clarification, “active listening,” and looking for quantity of ideas instead of quality. Critiquing the ideas will come later. When asking insightful questions, it might be surprising how many fine ideas arise.

We are reminded of that adage: “God gave us two eyes, two ears and one mouth, and hopefully the wisdom to use them in that proportion.”

Blog #26 - 8/13/10

by Chas Bonner

TRENDS & CYCLES

Last March we attended a Northwest Agribusiness Seminar in Washington State. One of the presenters at that seminar was Ejnar Knudsen of Passport Capital. One might ask why a financial analyst from an investment company would be invited to present at an agricultural seminar, but his presentation resonated with the audience. It was about food trends and cycles, and how they would affect financial investments. It made total sense.

This is having a REAL impact upon us----and upon all of you in agriculture.

In any business, cycles are continuous and unavoidable. Most people know about cycles in their own industry, both good and bad. What should be just as obvious are trends, although they are normally less discussed and less understood. What is exciting for all of us in agriculture is that our trend lines look good far into the future, although every agricultural product will have good and bad cycles within that longer-term trend.

Some reasons for the positive trend lines:

• World’s population should increase 50% in the 50 years from 2000 to 2050
• Arable land is decreasing over 20 million acres per year world-wide.
• In 1960 there were 2.8 acres of farmland per person in the U.S.; today it is 1.0 acres.
• The rate of increase of productivity has been slowing.
• Environmental laws/fears will add to the rate of decrease.
• More land around the world is being used for bio-fuel production.
• As populations attain middle class status, caloric intake (food) increases.
• Food is absolutely the last thing man can do without.

Assuming these positive trend lines will hold, our job is to determine the cycles and either capitalize on them, or more important, avoid or ameliorate the bad cycles. At times it is difficult to mitigate bad trends because we are part of an industry and have little market power. However, often we simply refuse to see, refuse to address and therefore fail to minimize damage from bad cycles.

The pendulum always swings too far both ways, and if we anticipate the swings and make the right pre-emptive moves, we can avoid being knocked out. This is why planning is such an important part of the business of Scythe & Spade.

Blog #25 - 8/6/10

by Chas Bonner

CONFLICT

While driving to work, there was about the 5th discussion on the radio about how to fight fair and resolve conflict in a marriage. It was very interesting and even enlightening, but we will not attempt to discuss marriage resolution, knowing what a tough task that is. Instead, we will focus on conflict in one’s business or farm.

Too often conflict is viewed as a negative, but it can be very productive if done well. It forces all of us to re-think a position, to listen to novel ideas, to work through disagreeable issues, and to end in solution.

First, there needs to be a definition of the problem in order to find a solution. Perhaps the “combatants” should first find areas of common agreement, where there is no argument. Then clearly understand both sides of the disagreement through “active” listening to the other, where questions are asked, perhaps notes taken, and a clear demonstration of listening, with ears, eyes, heart and gut. Do NOT pretend to be listening when merely forming counter-arguments. Remain open to persuasion and demonstrate an ability to change your mind.

Finally, we have all been in countless meetings where 99% of the time is spent on problems. Eventually, we must arrive at possible solutions. If parties to the disagreement are truly listening and looking for resolution, the remedies will come. If resolution does not arrive, perhaps agree to put off until another time, talk it over during an informal lunch or dinner, and dig deeply for a conclusion. If still at an impasse, perhaps it is time to bring in a “mediator” who might be in the same organization.

Conflict is never easy, but if all parties have an open mind, it generally adds to better understanding, a better business environment, and a new and better way of doing things.

Blog #24 - 7/23/10

by Chas Bonner

SAFETY IN AMERICA

Today we are bombarded by information that is downright scary, whether it be economic, social, criminal, or other. What seems to be rare is good news, and that will be our focus today.

The July 19 edition of Newsweek magazine carried an article about Business/Recession. It suggested that government has run out of ideas for rebuilding the economy, but that business and consumers are undertaking the job. Despite daily news, jobs are slowly increasing, economic output increasing, home value decline slowing, and consumer spending again rising. Just as important, the economies of the rest of the world, with exception of Europe, are growing even faster than ours.

Corporate America’s balance sheet has never looked stronger, corporate earnings are increasing, and cash flow increasing at an even higher rate. Sadly, corporations are not spending that cash load, primarily because they don’t trust government to hold the line on existing laws and regulations. Business needs and likes consistency; our current administration is about “change.”

For agriculture specifically, there are definite pluses. In the past 5 years, purchases of almonds by China have risen eightfold. Other commodities have similar stories. The middle class in China, India, and all BRIC countries is becoming larger by the day, and middle classes become big consumers. This global growth also creates foreign investors, and safety is a key element in all foreigners’ investment decisions. America is one of the few places on earth where intellectual property is tightly protected, where the rule of law is consistent, and where fears of expropriation are non-existent.

Safety in America bodes well for our farming communities and farm values despite any hiccups that may occur in the short-term.

Blog #23 - 7/16/10

by Chas Bonner

G.M.O. & Agriculture

Genetically modified organisms in agriculture have been a hot button in most societies. It is too bad since most of these genetically modified crops have resulted in tonnage increases, resistance to unwanted pesticides and herbicides, drought resistance, and essentially all kinds of improvement in productivity. If world population estimates of 9BB people by 2050, and declining acreage of arable land throughout the world prove to be true, with restricted ability to increase agricultural productivity, we will be faced with spreading hunger, famine, and perhaps wars over food.

But a little door has just been opened. The European Union, which has banned most GMO foods since 2006, recently proposed relaxation of European Community-wide bans. The proposal calls for country by country decisions. Some European countries like Austria, Scotland and Wales are dead-set against GMO foods while others like Holland want to open the gates wide.

This was also welcome news to the U.S. and the World Trade Organization, both of which have been fighting the E.U. ban for years, threatening trade sanctions.

Apparently, most European farmers, while they welcome the proposed change, are not quite ready to jump on the band wagon. They fear that other regulations will suddenly change again, especially since much of the decision making may be pushed down to E.U. bureaucrats rather than the commissioners themselves. Furthermore, anti-GMO activists have resorted to violence in farming communities over past approvals, causing farmers to be wary of using GMO seeds before the outlook is completely clear.

To open any door, a crack must first be seen.

Blog #22 - 7/2/10

by Chas Bonner

COMPETETIVENESS OF AMERICAN AGRICULTURE

Please excuse what may appear to be a personal “travelogue,” knowing there is a message about agriculture.

For the past 2 weeks, my wife and I were on a river boat cruise from Vienna, Austria to Amsterdam, Holland via the Danube, Main and Rhine Rivers. At first, I was reluctant to go, thinking “this kind of travel is for old folks” (and I am a mere 68). But was I wrong; it could not have been more interesting and enjoyable!

We would cruise sometimes during the day, but normally at night, and while the daily hikes through historic castles, cathedrals, and villages was intriguing, what caught the agriculturist’s eye when cruising during daylight hours were comparisons and contrasts of U.S. to German, and Dutch farming.

Even for the non-farmers, European agriculture was a fascination. Boat travelers were constantly discussing how beautiful and prolific all these farms were, while my thoughts were “No wonder European food is so expensive.”

The high expense of European farming was evident at every turn of the river. Each hectare of arable land is farmed, even 30-40 degree slopes. Most grape vineyards are planted on steep slopes, with the vine rows vertical to the slope rather than horizontal as one might logically think. Those vineyards had all kinds of concrete erosion preventers, and nonetheless a big rainstorm always caused havoc. Wheat, barley and rye were abundant and planted right up to the edge of town or forests. Minimal irrigation systems are in use, but in Holland spending is profuse on pumping water OUT of farmland, with 15-20 inch pipes visible everywhere, all emptying into canals. Finally, what added mostly (in my opinion) to the beauty of European farming was that virtually no houses or other buildings are on the farm; all homes are in the villages where the farmer lives and commutes daily to his farm---via either his tractor or his Mercedes.

We are fortunate in the U.S. that most of our farmland is more extensive and can therefore be farmed less intensively and less expensively. In short, we can be more competitive.

Prevented Plant Acres

by Patina Thompson

Prevented Planting (PP) is an issue that can come up for an insured on a yearly basis, or never at all. PP is defined as “the failure to plant the insured crop with the proper equipment by the final plant date designated in the Special Provisions for the insured crop in the county or by the end of the late planting period.” An insured must have been prevented from planting the insured crop due to an insured cause of loss that is general to the surrounding area and prevents other producers from planting acreage with similar characteristics.

Additional coverage may be purchased to increase the PP guarantee (not available on CAT policies), which are outlined in the Special Provisions of Insurance by crop. An increase of 5% or 10% can be elected before the Sales Closing Date.

As with all crops and claims, in the event a producer is prevented from planting a crop with PP coverage, they must notify their agent within 72 hours. Any PP acres should be clearly noted and reported on the acreage report before the Acreage Reporting Date.

The maximum acres of PP that you are eligible for are determined on a policy, county and crop basis as follows; the maximum number of acres certified or insured acres reported for insurance in 1 of the 4 most recent years – exceptions apply for double-cropped acreage. Regardless of the number of acres determined, PP coverage will not be provided for any acreage that does not constitute the lesser of 20 acres or 20% of the total acreage in the Unit.

Acreage that is prevented from planting due to drought or failure of irrigation water supply is an insurable cause of loss in most situations.

The length of time to work a PP claim can vary and depends on what supporting documents may be needed. Either way, the PP acre election can be beneficial if you are in an area where the quantity of water supplied can vary from year to year. Contact your crop insurance agent for more details.

The Importance of Acreage Reporting

by Patina Thompson

By mid-June, you should already have your crop insurance agent contacting you for your acres on your Spring-planted crops. For each insured crop, an acreage report must be submitted and is essential in determining the amount of insurance and the premium charged to the insured.

It is very important to report all acres, insurable and uninsurable, as well as zero-planted crop acres. The information should also be accurate so the insured can avoid penalties for misreporting.

It’s the insured’s responsibility to timely report the following to their agent;

• All acres planted along with the planting date of those acres
• The insured’s share in the crop and name of person(s) crop sharing, if applicable
• Uninsured acres
• Type or variety of crop
• Farming practice, i.e. irrigated, non-irrigated, organic, etc.

After an acreage report is submitted, a printed Schedule of Insurance will follow. Any corrections to the information should be submitted immediately.

For Arizona, the Spring-planted acreage reporting date for cotton and grain sorghum is July 15th. This coincides with the Farm Service Agency’s (FSA) certification deadline – so be sure and cover both bases by submitting accurate information to both. Your agent can easily use the information provided to FSA to confirm the planted acres.