Farmer deals with volatile market
TULSA, Okla. (AP)--Wheat farmer Jeff Krehbiel scoops handfuls of peanuts-in-the-shell from a bag and puts them in a small wicker basket. He sets it on the edge of the table, next to stacks of glossy brochures advertising the irrigation systems he sells.
Maybe the peanuts will be incentive for a customer at this year's Tulsa Farm Show to linger at Krehbiel's booth. Maybe it will be enough time to shake a hand, get a phone number, make a sale.
But in this economy, those are big maybes.
In the farm belt these days, there aren't too many folks interested in snapping up $80,000 irrigation systems, which he sells as a sideline to farming.
These are dicey times for growers like him, held hostage by a volatile commodities market that saw a bushel of wheat hit $12 and then plummet, and by unpredictable costs for expenses like diesel fuel and fertilizer.
The break-even point on the crop he harvested in June was $6.30 a bushel, and he managed to make a profit, selling as high as $7.50. But on his September crop, break-even could be $7.80 a bushel, and the going rate at the local grain elevator recently closed at $4.15.
"You can talk about all the Wall Street boys losing their money, but it's the same thing on the farm," says Krehbiel, a tall, sturdy man of 45 who wears Wrangler jeans, scuffed brown boots and a Farm Bureau cap that hides a swath of gray hair.
His hands are rough and worn, his eyes tired. A difficult year has taken its toll.
Krehbiel takes a pinch of Skoal and waits.
In a decent economy, he would be thrilled if he could sell two irrigation systems in a three-day show. This year, he'll be happy if he can sell one.
Time is money, and he's already crunching the numbers in his head on what it's costing him to be here: renting space on the exposition floor; electrical hookup; hotel and meals for three nights and fuel for the 170-mile drive from his home in Hydro, Okla.
Twelve-hundred dollars easy, he figures, and not one nibble yet from a customer.
Krehbiel's buddy, Chuck Tolle, strolls up, cup of black coffee in hand.
"Is there anything I can't leave here without?" he asks.
"Maybe," Krehbiel replies.
"I'm back in conservative mode," Tolle admits.
"Me too. I was going to buy a combine, but now I'm plum not in the mood."
The men talk about $1,000-a-ton fertilizer and how Tolle's combine got hit by a freak bolt of lightning during the summer's harvest.
They watch dozens of farmers stroll by. A lot of looking, but not a lot of buying.
The guy in the booth next door is doing welding demonstrations every 10 minutes or so, and that seems to draw the bulk of the crowd on this row.
The two lay odds on when the financial mess might turn around.
"I'm forecasting 2009 is going to be hell," Krehbiel says, spitting into a plastic soda bottle. "It's not going to get better until 2011 or 2012."
"I'm more optimistic, but not by much," Tolle replies.
The conversation moves to Paul Jackson, a wheat and cattle farmer who's walked over to commiserate.
"Paul, how are you planning for '09? Building a bunker?" Krehbiel asks, half-joking.
"Hunkering down, watching my pennies," Jackson says.
Jackson and the others sweated over every pound of chemical they put down this year, worrying if a profit could still be turned. Cutbacks mean more weeds left in Jackson's fields, but he figures the first hard freeze will kill 'em off.
"If you're sitting still, you're not spending money," Jackson laments.
"That's the truth," Krehbiel says.
Two hours down, and it's beginning to smell like lunch and fried everything. The progress report: plenty of small talk, but nobody stopping long enough to deal.
Krehbiel helps himself to a handful of his own peanuts. He unshells them and looks down at his weathered boot laces.
"It was supposed to be such a good year," he says, wiping some bits of shell off his pants.
Farming is in Krehbiel's DNA. His great-grandfather moved to Oklahoma from Kansas, trading a team of horses and a wagon loaded with oats for the 160 acres his father lives on today.
His senior year in college--the last time he wasn't in debt--he bought his first piece of land for $140,000, borrowing the down payment from his great uncle.
Now, he has a 13-year-old daughter who's becoming drawn to the family business. Brittany can quote off the top of her head how many billions of dollars agriculture brought to the state last year. He wants to hand her the reins to the farm one day, but is afraid of pushing too hard and scaring her away.
Krehbiel has tried to grow everything on his 2,800 acres: cotton, sunflowers, black-eyed peas, alfalfa.
Like most farmers, he's come to expect April snow, summer floods and scorching droughts as a cost of doing business.
"If you lose your crop to a drought, you lose it to a drought," Krehbiel reasons. "You can put all the money in the offering plate you want, but it's still out of your hands."
What causes the most distress in his profession, he says, are uncertain economic times like these. Doubt creeps into almost every decision a farmer makes in a recession: When do I order the truck of fertilizer? When do I sell my wheat? Can my combine make it through one more harvest?
Krehbiel looks at his watch: Three hours, and not one person has bothered to ask what he's selling.
Another old acquaintance, Marl Carter, stops by. He's in real estate finance.
"What are you seeing?" Krehbiel asks.
"Right now? Tighter than heck," Carter replies. "Lot of people sitting on their hands."
"These banks can only loan so much money to an individual," Krehbiel says. "I needed a loan this year and I couldn't get it. I knew it was going to be tight, but I've always been able to finagle around it."
He pauses, then shrugs.
"Shoot, I'm kind of glad I didn't get it done," he says.
The day drags on. Krehbiel has taken out a small pocketknife and is picking his fingernails when Chuck Tolle swings by again. He's made a tour of the booths, which sell everything from tractors to animal insemination services.
"I've seen it all," Tolle says with a hint of sarcasm.
"What'd you see?" Krehbiel asks.
"I've seen a lot of stuff I like and a lot of stuff I can wait on," Tolle says.
Krehbiel lifts up his Styrofoam cup of soda as if giving a toast and rattles the ice cubes inside.
"Right there, Chuck, one bushel of wheat. $4.25," he says.
It's mid-afternoon, and an elderly man approaches the booth. He takes a handful of peanuts and scans the brochures, still meticulously arranged on the table.
"How you doin'?" Krehbiel asks, getting up from his chair. A potential customer?
"One day after the next, and I'll be lucky at that," the old man replies.
He hobbles away. No sale, just peanuts.