A friend of mine who farms a mile or so down the road from our farm bought a new planter, and he is suggesting that I should sell my planter and hire him to plant all my corn as well as his. We both grow about 1,000 acres of corn and about 800 acres of soybeans. We both have newer no-till drills for our beans. I’m wondering if this is a good idea, especially after the spring we just had. It was hard enough planting 1,000 acres of corn with all that rain; it would be twice as difficult planting 2,000 acres. He told me his planter is bigger than mine and does more acres faster. He did get his corn planted before I got mine in. I would like to work with him, but I have some concerns. What are your thoughts?
Doug Hodorff: If you were to work with your neighbor, I would make sure your concerns were addressed. When considering working with your neighbor on planting, take into consideration that planting is one of the few times you will have control of what is happening. Is the planting procedure done according to your expectations? After the seed is planted, Mother Nature has full control of the weather. If you needed a major upgrade on your planter, it maybe something to consider. Easing into a working relationship with your neighbor could be a better option. Maybe land that your neighbor works is ready before yours. I would work together on a trial basis before I would commit to selling equipment that you may have to replace if not satisfied.
Sam Miller: This is a great question and not an easy one to answer because it has both financial and non-financial impacts. If you sell your planter, you can reduce debt or improve your equity position, but you are turning fixed costs into a variable cost for custom planting expense. Peace of mind is at stake given the recent difficult planting season where two planters could cover ground faster. Some of the technology on new planters does increase speed at which you can plant, and it may be possible to cover twice as many acres in the same amount of time. Research the ability of your neighbors’ planter to be able to efficiently cover both his and your ground, determine the cost of custom planting, and then review your own financial situation as to whether you have excess equipment. After reviewing the financial impacts, you’ll have to decide if you can manage hiring your planting or if you’ll need the control over this task. Your banker, Extension ag agent or farm technical college trainer can assist you with this analysis.
Katie Wantoch: I would agree with you, and I also have some concerns. Your question does not indicate why your neighbor is suggesting you sell your planter. If you are considering reducing your outstanding debt, then selling your planter may be an option. I suggest you consider the costs your neighbor would charge you to plant your crops and compare those to the costs of continuing to own a planter. Timing is always a challenge with farming. Sometimes it can be difficult to decide what to do first when you have a limited window in which to complete tasks. Your neighbor may not get to your farm exactly when you want or during the best time for your crop planting window. Also, you will not have complete control over the quality of the work done. Ownership may be the least expensive choice in the long run. If you financed the planter, you may have needed a loan that may have a short repayment period. This could be causing a cash-flow problem right now. Are you able to refinance this loan for a longer payment period to ease cash flow? If you decided to sell your planter, is there an option to rent a planter from a local dealership if your neighbor is unable to plant your crops? Consider these questions before making your decision.
Adding robotic milkers
My two sons and I farm in southeastern Wisconsin. We have 400 cows. It’s hard to find help, and we pay our help a lot of money. Our milking parlor is past its prime and needs to be updated with new equipment. I’m wondering if it would be smarter to invest in robotic milkers. No matter what we do, we aren’t changing anything until the price for milk rises above $18 — hopefully next year. Please advise.
Doug Hodorff: Assuming your sons provide labor at your dairy, half of your workforce is family. Four hundred cows divided by 70 cows per employee is rounded up to six employees. As you look at robotic milking, be careful on figuring replacing labor with technology. You will need different labor requirements with robotic milking. You will need a labor unit to keep robotic milkers functioning and labor taking care of animals. I have seen an overestimated labor savings when going to robots. The one issue I have heard is being on call all hours of the day to keep robots functioning. Once you make the decision to move to robotic milking, you are committed to them long term. I have heard success stories and some disappointed ones. Make sure you do a fair evaluation of this technology.
Sam Miller: There are many dairy farmers facing the same question: Should I automate or continue to seek ever-scarcer labor? Fortunately, many automated robotic milking systems have been installed in the past decade, so there are ample resources and examples to assist with your decision. While labor may be the initial driving force, there is a significant trade-off between labor and capital investment should you go down this road. The biggest change in the switch to robotic milking is the management of cows, process and data compared to the people side. Beginning the planning process now should provide time to complete your homework before you need to make a decision. Work with a qualified Dairy Business Consultant to complete an analysis for your dairy. Good luck evaluating your options for the future.
Katie Wantoch: With technology constantly improving, the installation of robotic milkers is an option to consider. Dairy farming does have a future; however, the one-size-fits-all approach should not be applied when determining if your farm operation will be profitable with this new technology. First, you mention that you have two sons who work with you. Have you asked them what they envision for their future? You may not be the best person to ask this question and receive honest feedback from them. Be sure to reach out to a consultant, Extension agent or facilitator for assistance. If your sons don’t foresee milking cows in their future, then you need to step back and consider other options. If they are interested in continuing to dairy farm, I suggest you work on financial projections for this business expansion based on current milk prices. If you are able to cash-flow the purchase of new milking equipment at today’s prices, then you should be able to make financial progress when milk prices reach $18. Dairy farmers have become efficient at producing a high-quality product. They need to become financially sound in their business operation to continue seeing farm profits.
Agrivision panel: Doug Hodorff, Fond du Lac County dairy farmer; Sam Miller, managing director, group head of agricultural banking, BMO Harris Bank; and Katie Wantoch, Dunn County Extension ag agent specializing in economic development. If you have questions you would like the panel to answer, send them to: Wisconsin Agriculturist, P.O. Box 236, Brandon, WI 53919; or email firstname.lastname@example.org.