Harvest brings unusual rural prosperity

By Larry Dreiling

This fall has been a reason to celebrate at many farms and ranches throughout the area.

Crop and cattle prices are high; some prices are at record levels. Many producers have seen large crops and high cattle prices, which has created prosperity not seen in recent years.

This is particularly true on the western High Plains. Seven to 10 years of drought have given way to a good year. In urban America, the media there has been touting this year as a reason to cut farm payments in the 2007 farm bill.

Producers, on the other hand, have been reminding the big city media--if they show up at their door asking to see a big new tractor in their sheds--of one very simple fact.

It's just one year.

Jon Holzfaster, chairman of the Nebraska Corn Board, and his father Ralph are two such producers who have had a reporter from some place other than their favorite agricultural publication come visit them.

In an August story, The Wall Street Journal reported how residents of their area, Keith County, Neb., were not freely spending the receipts from high farm gate prices on lavish homes or expensive jewelry, but were paring down debt and saving for when the boom phase eventually again relents to bust.

"I would have liked to have them take a different slant," Jon Holzfaster said. "Really, we are just on the top end of a cycle. There's a lot of healing going on around here. A lot of equity is being rebuilt."

The Holzfasters said they are spending money on new windows and siding on the family's homestead, which is about the only thing close to being considered a personal item.

"It's 81 years old and we've really never done anything to it," Ralph Holzfaster said. "I was born in that house in the early 1930s."

"I guess Dad could have bought Mom a $25,000 tennis bracelet, but no, he's fixing up the house. People have different priorities where we live," Jon Holzfaster said.

Adding to the likelihood the prosperity may linger is the construction of an ethanol plant at Madrid, Neb., in Perkins County about 20 miles from the Holzfaster's farm.

"There are a lot of good things happening around here, with six plants across the area," Ralph Holzfaster said. "Besides Madrid there's one at Wallace, two at Imperial, one at Wauneta and one at Brule. They won't be competition with each other. There's a lot of synergy in the business."

There's not only synergy between communities, Jon Holzfaster said, but between producers and non-producer experts who have keyed on plant construction.

"The support we have had and excitement we've seen from the non-production area is fantastic," Jon Holzfaster said. "It's not a farmer's forte to be in a boardroom. We knew we needed to have people who can bring more than just money to the table. We needed to have a well-rounded group of people, including people from Omaha to help us. They have really been able to help us understand what we need to do to make it all work."

Back at the farm, the Holzfasters complete the ethanol cycle by putting up wet distillers grain to feed cattle in their small feedyard.

"We buy calves in the fall then fatten them up and sell them. We get rid of them by June and July," Ralph Holzfaster said.

The Holzfaster's crop operation consists of several irrigation pivots of corn and wheat, with dryland wheat at the corners. The wheat was harvested earlier this summer. This year, the family planted corn behind corn along with some alfalfa and cane as a limited rotation crop.

"We've got the alfalfa down. We have the cane swathed. We picked some high moisture corn and, as soon as we have the wheat drilled, we'll start up on the dry corn," Jon Holzfaster said as he repeated his list of things completed this fall and work yet to do.

"We didn't do any beans this year, because if we did we'd have some beans waiting in the field. Corn on corn here is common. The neighbors are up to their elbows in cutting beans. I'm glad I don't have that this year, with the exception of the price. It's been a great year for everything."

Traditionally, the Holzfasters said they have grown two to six circles of popcorn each year. They didn't this year, but look to resume production of that crop next year. They also want to raise their first crop of hard white wheat.

"In the last few years, we've been gravitating toward more corn and the thing that gets modified is your rotations. As we have pulled away from the bean-corn rotation we've lost the clean acres to grow popcorn on," Jon Holzfaster said.

"Now we'll step back in it. We'll plant white wheat. Fortunately, with the price of wheat, you don't have to sacrifice that irrigated production to get into a beans-corn-wheat rotation."

Considering the many strictly dryland wheat producers in his area, Jon Holzfaster said he commends them for their patience through the drought.

"It's just been tough for them all these years, even to hold onto the land," he said. "They've been making just enough money to pay the taxes and that's about it, so I'm sure they're happy about this harvest."

As chair of the NCB, Jon Holzfaster recently traveled to Asia to participate in a trade mission with Gov. Dave Heineman. Visiting China, Hong Kong, Macao, Japan and Taiwan, the highlight for Holzfaster was the signing of a letter of intent with the Taiwanese Feed Industry Association worth $150 million to $200 million for Nebraska corn producers.

It was also announced during the mission that Wei Mon Co. of Taiwan was extending its commitment through 2008 to purchase corn-based plastic resin from Nature Works. The resin, known as PLA, is produced in Blair, Neb. The governor's office valued the deal at $8 million.

"It was a very busy trip that was extremely well organized," Jon Holzfaster said. "Working with the nations, particularly Taiwan, was very professional and focused. Some countries have different layers of bureaucracy, but there they work very much on face-to-face contact. And the deals we work out are based on that kinship between Nebraska and Taiwan."

Jon Holzfaster said there were lots of questions on U.S. agriculture and he tried to answer them as best he could.

"There were questions relating to corn production and agriculture in general at every stop," he explained. "The agriculture delegation was there to answer them and to put a face on Nebraska agriculture, which is very important."

Meetings also were held with different import entities in each country as a way for both sides to better understand trade expectations.

"It is important to understand how importers perceive U.S. commodities and how we might better address their perceptions in order to market our products to them," Holzfaster said.

This was the first foreign trip he was able to make with Heineman and Jon Holzfaster said he was proud to represent NCB and, in turn, the U.S. Grains Council. Other producers included cattlemen representing Nebraska Cattlemen and the U.S. Meat Export Federation and Nebraska Wheat Board member Pat Nelson, representing U.S. Wheat Associates.

"A lot of these trips fall at the wrong time of year. The timing on this one was just right," Jon Holzfaster said. "Personally, it was great to spend time with the Governor, (Nebraska Secretary of Agriculture) Greg Ibach, and (Nebraska Director of Economic Development) Richard Baier.

"This shows how traveling with the governor is different. We were over there when Sen. Chuck Hagel announced he wasn't going to run for re-election and we knew almost right away. I soon realized I was more in tune with Nebraska on this trip than I usually am when I'm away on business, because the governor is always connected to back home. He's in an 'always on' mode."

It is this information-based lifestyle that intrigues both father and son as to where agriculture is headed.

"This is what I guess makes these city reporters interested in places like this but we surprise them," Ralph Holzfaster said. "We don't fit the mold they expect. In Nebraska, this is conservative country. Yet we elect Democrats sometimes. They said 15 years ago that everything in agriculture technology and ways of making a profit have been invented. That's certainly not true.

"When you get older you realize you're not any smarter, it's just that you've been there and done that--seen it happen. There have been all sorts of revolutions in agriculture in my lifetime, from flood to pivot irrigation and from discs to rod weeders to no-till. When you consider that, it must be exciting for kids in ag colleges today."

Still, it's all about enjoying this prosperous fall while preparing for the uncertainties of the future that are a part of production agriculture.

"If they think farmers are great about spending money, we are. We pour money back into our operations," Jon Holzfaster said.

"There is old machinery to be replaced. We are getting ready for the next dip in the cycle. Now if things are sustained for a while, great. For now, everyone around here is making proper investments for the future that can make their businesses profitable when prices are lower."

Larry Dreiling can be reached by phone at 785-628-1117 or by e-mail at ldreiling@aol.com.

10/22/07
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Date: 10/18/07

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