Above a photo of a darling toddler sporting bib overalls and riding his toy tractor, the headline in the March 1997  Prairie Farmer reads, “Will Carson find a way to farm?”

Fast-forward to 2018. The answer is yes — a resounding yes — for Carson Hank, who today farms with his parents, Jeff and Trisha Hank, near Aledo, Ill. And he’s raising his own son, Vaughn, on the farm.

“Farming’s always been my passion,” says Carson, who graduated from Lake Land College in 2015. “I never really thought about anything different.”

The Hanks began working Carson into the operation on a salary basis for the first two years. A year ago, he bought a house and 150 acres, and trades labor for equipment with his dad. They run a few cows with the same labor-feed trade. Father and son own their hog buildings, each feeding out 4,800 head a year, and Carson receives a salary for his work in the hog operation.

He credits his local banker (and a beginning farmer loan from the Farm Service Agency with a 2.5% interest rate and a 90% guarantee) for helping him buy a farm at his age.

“It took some guts for my banker to say, ‘This guy is 21 and wants to borrow a million dollars with no equity.’ He’s really good to work with, and he understands everything,” Carson says.

But the hogs get the credit for making everything cash-flow. The Hanks feed pigs on contract with Joy, Ill., farmers Dennis and Davis Biddle. It’s an attractive income stream for lenders, and the fertilizer availability cuts down on input expenses — better for the balance sheet. Contract hog production is a fast-growing segment of Illinois agriculture, adding income and diversifying risk as families bring in another generation.

Indeed, Carson says there are 15 hog barns going up in Mercer County in the next few months.

What’s a lender want?

There’s good reason for that, says Steve Witges, an Effingham-based regional vice president with Farm Credit Illinois. “It’s a very successful way to bring a young farmer back home,” he says of families who use livestock to diversify income streams. In livestock feeding, you have to be realistic about costs, death loss and losing efficiencies, or they’ll chew up profits.

Overall, Witges is a fan of off-farm income or livestock diversification for young farmers. And he says the best young farmers he knows are realistic about what they’re capable of doing. They get help with marketing and financials, and they know how to communicate and work well with those people to be successful. 

“Uncertainty and the unknowns are the two big lender fears,” Witges says. “The challenge to young farmers is to reduce those as much as you can.”

How do you do that? Have a good handle on financials. For a young farmer, that doesn’t mean every number is perfect; instead, know how important a good balance sheet is, understand working capital, and use it to manage your farm.

“That gives us confidence as a lender. It makes me think they understand risk and they’re listening to what we’re saying,” Witges says.

High on opportunity

Paul Stoddard, University of Illinois agribusiness professor, says young farmers have to remember the No. 1 goal: “Be here to play the game next year.” Stoddard sees several opportunities for young farmers in 2018:

• Custom application. Think sidedress anhydrous, which farmers hesitate to do because of the narrow window and because they don’t like to do it. Stoddard says that’s an opportunity for a young farmer with an anhydrous applicator, adding that he has students who put on ammonia 20 hours a day for two weeks in June.

• Retirement. Many older operators didn’t retire during the “golden window of 2007-13.” Now they’ve had several bad years in a row and may retire soon or in the next year or two. “Say you want to retire at 75 and you’re 73. There’s nothing on the horizon to indicate recovery,” Stoddard points out.

• Tech skills. With an aging farm population comes the opportunity to market your technology skills, and an edge for someone who can do it effectively.

• Machinery buy. Stoddard says low used-machinery prices could present opportunity for a young farmer who’s kept some powder dry. Good used prices combined with custom work could equal opportunity in the equipment market.

• Seed treatment. More farmers are buying untreated seed and treating it with exactly what they want. With seed treatment machines running around $20,000, Stoddard says you can treat your own and other people’s, with some skill and training.

• Variable lease. Volatility can be your friend in negotiating with landowners, particularly in moving to variable leases that allow landowners to absorb more income in a windfall. It also may help alleviate fears about lowering cash rent, if they know they can capture some upside potential in a market rally.

• Pay forward. Work on your landlord relationships now, Stoddard says. If you have a better-than-expected year, mail your landlord another 10 bucks an acre. “A big part of farming is relationships, and you have to work on those relationships,” he says. “They need to understand when you’re doing well and when you’re doing poorly.”

As a professor, Stoddard often works with students who want to farm, and he consistently tells them to go work somewhere else for five, 10, 15 years. “Then go back, when your parents are thinking about retiring.”

Overall, he has fewer students going home to farm these days, especially compared to 2007-13.

“The lesson for anybody of any age? Manage as if you expect the bad times to return pretty quick,” he advises. “I don’t know any old farmer who says, ‘I wish I’d been less conservative.’”

Intergenerational operations, like the Hank family, thrive on both wisdom born of experience, and on ambition and youthful enthusiasm.

Ask Carson Hank what he’d like to do next and you get a sense of that very go-get-’em spirit every young farmer embodies.

He doesn’t miss a beat: “I’d like to start renting some ground. I’d like to buy another farm. I’d like to put up another hog building. I’d like to do everything, really.

“But my banker might laugh at me when I ask for more money.”

Farm Credit: Friends to young farmers

Farm Credit Illinois is kicking off a young and beginning farmer incentive program in February called Fresh Roots. Young farmers under 40 or beginning farmers up to 10 years are eligible for lower interest rates, relaxed credit standards and subsidies for FSA fees. Farm Credit is also offering learning incentives: $2,000 for attending workshops on balance sheets, crop insurance, marketing and more. Find out more at farmcreditil.com.