2011 Indiana Farm Management Profiles

Purdue Extension CES-370 20112011 IndianaIndiana FarmFarm Tuesday, June 28, 2011

1 Unger Farms 6610 S. County Rd. 350 W. Carlisle, IN 47838 ManagementManagement ProfilesProfiles 2 Melon Acres 5388 E. Gauger Rd. Oaktown, IN 47561 3 Indiana Prairie Farmer Master Farmer Banquet 41 Southwest Purdue Ag Center CR 350 W 4259 N. Purdue Rd. Vincennes, IN 47591 Wednesday, June 29, 2011

4 T.S. Boyd Grain 1957 E. 200 N. 58 Washington, IN 47501 5 Carnahan & Sons Carlisle 9809 E. Wheatland Rd. Vincennes, IN 47591 6 Villwock Farms 11600 N. Freelandville Rd. Edwardsport, IN 47528 Sullivan County Knox County 67 2 Freelandville 58

E. Gauger Road Oaktown 6 Freelandville Road Carnahan & Sons ▲

Edwardsport 41 Shipping Street T.S. Boyd Grain ▲

N. Purdue Road 150 Bicknell

3 57 67 550 CR 200 N Knox County Daviess County 4 Wheatland Road 5 Washington CR 200 E CR 350 E 50 150

Vincennes Melon Acres ▲ 57

Villwock Farms ▲

Purdue Agriculture

It is the policy of the Purdue University Cooperative Extension Service that all persons have equal opportunity and access to Sullivan, Knox, and its educational programs, services, activities, and facilities without regard to race, religion, color, sex, age, national origin or ancestry, marital status, parental status, sexual orientation, disability or status as a veteran. Daviess Counties Purdue University is an Affirmative Action institution. This material may be available in alternative formats. 1-888-EXT-INFO Del Unger Farms ▲ http://www.the-education-store.com Contents

Indiana Farm Management Tour Schedule ...... 2

What Can You Learn from Our Tour Hosts? ...... 3

Farm Management Profiles & Authors

Del Unger Farms ...... 5 Bruce Erickson

Melon Acres ...... 9 Angela Gloy

T. S. Boyd Grain ...... 14 Chris Hurt

Carnahan & Sons ...... 18 Craig Dobbins

Villwock Farms ...... 22 Angela Gloy

Acknowledgements ...... 26

Indiana Farm Management Tour Daviess, Knox, and Sullivan Counties June 28 and June 29, 2011 (All times are Eastern Daylight Time [EDT].)

Tuesday June 28, 2011

1) Del Unger Farms – The farm management tour starts with lunch at 12:00 p.m. at Del Unger Farms. An interview with the Unger family will start at 1:00 p.m. The interview will be followed at 1:30 p.m. by three mini-tours on maximizing planter performance for uniform plant spacing and emergence, fine-tuning nutrient needs with plant tissue testing and foliar fertilization/on- farm testing, and enhancing land owner/tenant relationships through leasing options.

2) Melon Acres – The visit to Melon Acres starts at 3:00 p.m. with the family interview in the watermelon packing shed. Mini-tours will start at 3:30 p.m. and will rotate around the packing sheds. At the end of the mini-tours of the packing facilities, interested participants can also choose to travel in their own cars to the new high tunnel production facility. The high tunnel facility is about a one-mile drive from the packing sheds. Participants should allow an additional 30-45 minutes to complete this optional tour.

3) Indiana Prairie Farmer Master Farmer Banquet, Vincennes University − John Deere Building, Southwest Purdue Ag Center –The reception and tours of the new building start at 5:00 p.m., followed by the banquet and awards program. You must have preregistered to attend this event.

Wednesday June 29, 2011

4) T. S. Boyd Grain – The tour starts at 8:00 a.m. with the family interview. Come a few minutes early, and enjoy a free donut. Mini-tours will start at 8:30 a.m. on high yield continuous corn production technologies and on machinery trading strategies.

5) Carnahan & Sons – The visit to the farm starts at 10:00 a.m. with the family interview. Mini- tours on the farm’s quarter horse venture and on the farm’s prescription farming practices will follow starting at 10:30 a.m.

6) Villwock Farms – The tour of Villwock Farms starts with lunch at 12:00 p.m. Lunch will be followed at approximately 12:45 p.m. by an agricultural market outlook update by Dr. Chris Hurt, Purdue Extension Marketing Specialist. The Villwock Farm’s interview will begin at approximately 1:30 p.m. After the family interview, participants will be offered the opportunity to drive in their own cars a short distance to Villwock Farm’s new grain drying and storage facility for a guided tour. One focus of this tour will be a discussion of energy management in grain drying and handling facilitated by Purdue Extension Specialist Chad Martin.

2 What Can You Learn from Our Tour Hosts?

Five family farm businesses with their own unique management practices welcome you to their farms. Read the profiles in this publication, listen to the general interviews, and then see if you can answer the following questions. As you answer them, think about how you might use some of the host farmers’ ideas on management to improve the performance of your own business.

Del Unger Farms

1. What new technologies do the Ungers expect to adopt in the next few years? 2. How do the Ungers define return on investment in terms of how the inputs in their farming operation? 3. What are the keys to successfully managing higher value crops such as seed corn and vegetables? 4. What recommendations do the Ungers have for farmers who want to more intensively manage their crop nutrients? 5. What are the advantages and disadvantages of the Ungers’ land-holding and operational entities?

Melon Acres

1. What technologies are used in the produce packing lines at Melon Acres? Why are the produce packing lines considered a source of competitive advantage by the Melon Acres’ management team? 2. Melon Acres has recently invested in high tunnel facilities for vegetable production. To what extent does this investment represent a major new strategic direction for the farm business, and why did the farm choose to make this investment? 3. How have recent changes in the regulation of food safety in the U.S. affected the management strategies of Melon Acres? 4. What are the challenges to effectively managing a large seasonal labor force, and how has Mellon Acres addressed these challenges? 5. Melon Acres has three young managers (Autumn, Jacob, and Whitney). How did Mike and Vicki Horrall manage to achieve their goal of bringing their three children into the family farm business? 6. How does Melon Acres go about identifying and developing new marketing opportunities?

T. S. Boyd Grain

1. Why do the Boyds consider their machinery trading strategy a source of competitive advantage, and what is that strategy? 2. What are the benefits of diversification into specialized cropping enterprises such as earlage and popcorn, and what are the benefits of having diverse lines of business activity, such as farming, trucking, and operating grain elevators?

3 3. Why do the Boyds believe that modern farms almost have to get bigger in order to drive down costs? 4. What is the family’s plan for involving succeeding generations of the family in ownership and management of the family business while keeping the family business together? 5. Why do the Boyds consider relationship management one of their twelve keys to success? 6. What type of organizational structure has the Boyd family established to achieve effective management control of such a diverse set of business activities? 7. Why is turkey litter a preferred source of supplemental fertilizer for this farm operation, and what is required to effectively incorporate turkey litter into the farm’s nutrient management program? 8. What are the keys to successfully managing long-term high-yield continuous corn production?

Carnahan & Sons

1. What is an enclosed riding arena and stable doing on this Indiana grain farm? 2. What are the Carnahans’ keys to managing a successful business? 3. What are the characteristics of the incremental growth strategy used by the Carnahans? 4. What items do the Carnahans monitor in order to ensure proper business performance? 5. What has been the Carnahans’ experience with energy companies?

Villwock Farms

1. What steps would Don and Joyce Villwock recommend farmers take to protect their own interests if faced with an eminent domain proceeding? 2. Why does the Villwock Farms management team believe the Myers-Briggs Type Indicator has improved their management styles and communication practices? 3. Given the chance to start over and design a farmstead and a grain facility from scratch, what factors should you consider? 4. What is Purdue Extension’s grain drying energy assessment program, and what benefits can it provide for your farm? 5. What steps should you consider to prepare to transfer the family farm business to a nonfamily successor? 6. How can you have a full-time off-farm career and effectively own and operate a commercial farm business? 7. Don Villwock believes there are three critical economic principles driving commodity production. What are those three principles, and why have they led Villwock Farms to focus on producing value-added crops? 8. What are the top management and production concerns that Don and Joyce Villwock see for the next generation?

4 Del Unger Farms

The Ungers, who operate Del Unger Farms current operations and the adoption of more near Carlisle, Indiana, succeed by applying modern, more intense production intensity to every aspect of their personal technologies. and professional life. Their corn, wheat, double-crop corn, double-crop soybeans, Farm History seed soybeans, sweet corn, and green beans The farm operation is jointly owned and are grown with a high output production managed by Tammi and Del Unger, full approach that includes site-specific partners in every sense of the word. This management with variable rate applications, union began when Del and Tammi met at foliar nutrient and fungicide applications, Purdue as freshmen Ag Econ students. By and irrigation scheduling. By maximizing their junior year they had purchased their output, they aim to minimize costs on a unit first land together and had started farming of production basis. They also operate a down the road from Del’s folks. Tammi cow-calf operation and enjoy supplying grew up in Parke County, coming from a 4-Hers with some of their most promising family with agricultural roots as well. They offspring. decided to formalize their personal and business union the following year, marrying Management Philosophy in 1984. While those were not flush times With the Ungers, it’s go big or go home, to for farming, according to Del, “we at least use an often overused phrase. That didn’t lose our shirts those first couple of philosophy resounds throughout the Ungers’ years.” personal and professional attributes—in how the farm is operated, the livestock is tended, Tammi and Del have passed along their the crops managed, and the family interacts. passion for farming to their two children, And that approach seems to be working Adair and Lance, who got an early start at well. farming. The two siblings rented some land together when they were 11 and 12 years “We are high input, and hopefully that old, respectively, using the folk’s equipment translates to high output. To be successful, but otherwise taking on the risk. “It was you have to be willing to invest in a future their own money, and win or lose, they were that’s not always certain,” said Del, going to deal with the consequences,” said namesake of the operation. “We’re not into Tammi about this first venture. It ended up spending money for the sake of spending in the black, and both went on to graduate money; we constantly look at places where from Purdue in Ag Econ like their folks, we can invest and get a return on that Adair in 2009 and Lance 2010. investment.” Land Resources and Utilization The ability to push more production through The Ungers feel blessed that they’ve been a business’ fixed asset base is the essence of entrusted to farm some very productive land. the intensification strategy. A more intensely The soils in their area are dominated by run operation spreads fixed costs over loams, sandy loams, and fine sands, which greater output, lowering the overall cost of are sometimes low in water-holding production. This strategy can be executed capacity. But plentiful irrigation water is through more intense management of

5 available through much of the area, so a management of the farm business, as well as good portion of Unger cropland is irrigated. to accomplish other important business objectives. To capitalize on this productive potential the Ungers grow a mix of specialty crops—seed N utrient Management soybeans and seed corn, green beans, sweet Nutrient management for their crops is an corn. The vegetable production is through important focus for the Ungers. They fully Razorback Farms, which is based in appreciate the amount of nutrients that are Arkansas. Their acres are rounded out with consumed and removed by productive crops commodity corn, soybeans, wheat, double- and adjust their fertilizer programs crop soybeans, and double-crop corn. accordingly. But they are also farming soils that are sometimes lighter in texture that They do operate some rolling land, too, a don’t hold the volume of nutrients that few miles north of their farm’s operational heavier soils do. That’s why, along with grid base, and that provides the foundation for sampling and nutrient removal tracking, they their cow-calf operation. The Ungers’ 60 to utilize in-season plant tissue sampling as a 70-cow herd originated with Del’s folks and way to double-check plant nutrient status. their years of work and improvement, and the best offspring are sold to 4-Hers and as Plant tissue testing is not a common practice show calves. on most Indiana farms, but the Ungers depend on it. According to Del, “there is Business Entity Structure nothing necessarily simple or Their operation is organized into five major straightforward, or one best plan for nutrient entities, with a mix of ownership, assets, and management. That’s why we use a variety of functionality that are orchestrated together tools, and we constantly monitor and adjust for the betterment of the whole and to to best understand and adjust for crop facilitate the continuation of the farm past nutrient needs.” Del and Tammi’s involvement. The entities include: When in-season tissue sampling identifies a • Del Unger Farms, which stems from need, foliar nutrient applications can be part Tammi and Del’s original investment of of the mix in tweaking nutrient plans, land and equipment whether that is in corn, soybeans, or wheat. • Those applications can sometimes include U-1 Unger Farms, focused on livestock, sulfur, magnesium, zinc, and boron— haying equipment, and the land sometimes applied at sidedress time with supporting the cow-calf herd nitrogen or sometimes applied with the • Unger Farms Trucking, the transportation center pivot irrigation. The in-season foliar arm of the farm that owns the trucks and applications are not a replacement for trailers keeping soil nutrients in good order. • Unger Farms Grain, a three-way “If there’s one thing people might criticize partnership of Del, Tammi, and Lance me about on the farm tour, it is that I’m not • Lance Unger Farms a low cost producer on a per-acre basis,” said Del. “And I know that’s something that This multiple entity structure was many would say is important when you are established to expedite the involvement of producing commodities like we are—corn, the next generation in the ownership and

6 soybeans, and wheat. You hear a lot about variable rate fertilizer applications. They how being a low-cost producer is a key to utilize RTK guidance. success. But I will compare my per bushel costs to anyone’s.” The Ungers take an intense approach to planting as well. They feel strongly that the Any economist knows that part of the precise placement of seeds at planting pays formula in keeping per unit costs low is to off with uniformly spaced plants that grow keep throughput high. “With our favorably up more evenly, enhancing yields. They are long growing season here, productive soils, fastidious about the operation of their own and plentiful irrigation water down just 60 planters. Their interest in planter feet or so, we feel an obligation to take enhancements and fine tuning planters led to advantage of that,” said Del. an opportunity to offer products and services to neighboring farmers. Adair manages a That’s why production technology is taken Precision Planting dealership based at the very seriously by the Ungers. To help ensure Unger farm that is owned by her and her that the technology they adopt and the husband, Adam Everhart, a district sales practices that they follow are paying the manager for Specialty Hybrids. Adair and bills, the Ungers are in constant evaluation Adam also own and operate Everhart Cattle. mode—doing on-farm testing to evaluate existing and potential crop management Double-Crop Corn practices. While a variety of crops pay the bills on the farm, the Ungers seem to especially love “We need to know what works and doesn’t their corn crops. One of the more unusual work and cannot afford to be making practices is their use of corn as a double- assumptions,” said Del. Field comparisons crop after wheat. “The wheat comes off mid- are designed, and yield information is June, and we get the corn planted right back collected and compared. “We work closely in. With the planter I can more than keep up with our agronomist, Betsy Bower, to help with the wheat harvest, so I’m pushing the us determine the right mix of crop inputs to harvesting crew,” said Del. With a fair get the desired results.” Betsy is the Ceres amount of corn after corn irrigated in Solutions agronomist who works with crop bottomland fields, they feel they’re good retailers and producers in central and candidates for foliar fungicide applications southwestern Indiana and into Illinois. to control corn leaf diseases.

Precision Farming Practices Management Information System Precision farming practices are a spatial With 5 business entities, 17 landowners, intensification of management and have several crops, and a livestock operation, long been a part of the Unger crop bookkeeping, payroll, invoicing, and taxes management plan. Grid soil sampling has might seem a challenge. Tammi keeps it all been done since the mid-1990s, when GPS straight and also serves as the communi- technology first became commonly cations and organizational hub. “Managing available. Yield monitors tied to GPS are the books is something that is probably best used to measure crop yields and form the in the hands of one primary person—there’s basis of crop nutrient removal maps. The no second guessing if it has been completed combination of grid soil sampling and site- or not, and I keep the collective memory for specific nutrient removal is utilized for their the whole organization,” added Tammi.

7 Landowner Relations or buildings, or even help with the Relationships with landowners are bookwork. “Maybe we’re just that tight or something that the Ungers value highly. perhaps we want to maintain our own “We benefit from many long-term control of the outcome, I don’t know, but it relationships with landowners, and we seems like doing these things internally believe in taking care of that leased land as works best for us,” comments Del. They much as the land we own,” said Del. “Just as own their own pesticide and fertilizer with any inter-personal relationship, it is a application equipment and feel that works two-way street. It is my responsibility to get best for them internally as well. “With our to know my landowners and to understand mix of crops and with the unpredictability of what is important to them for their land.” the weather, we need to go when we need to go. Doing our own construction projects Del adds that some landowners are very also allows us to justify our employees year- interested in production practices and what around, too.” they are doing on their acres, and it is more of a business approach. That may not work The Ungers are especially grateful for the with other landowners, who value that the full and part-time laborers who help them Ungers have taken the time to get to know through their operation. It’s all hands on them personally. “Keeping fences clean of deck when tasks need completing, but the trees and mowing roadsides may be a big taskmasters include Darren McCammon, deal for some farm owners, and if you don’t who has provided 41 years of dependable open yourself up to them they may not know service, and Damon Golish, an 11-year that,” said Del. employee.

Do It Right by Doing It In-House The Ungers like to do their work mostly in- house, and hesitate to bring in outsiders to custom apply pesticides, construct their bins

8 Melon Acres

Prior to the advent of Melon Acres in an earlier harvest, resulting in better prices 1976, there were just tomatoes grown near and greater profitability. In 1983, Abner Bicknell, Indiana. Abner Horrall, and his achieved his goal as Mike and Mitch late wife Frieda, and sons Mike and Mitch joined the operation as equal partners. started out trucking the lion’s share of their lone product to Indianapolis. Over Melon Acres has expanded relatively time, there’s been considerable diver- quickly both in terms of scale and scope. sification and expansion such that today Today, the business is located in Oaktown Melon Acres is the state’s largest produce just a few miles from where Abner grew grower raising an assortment of fruits and the first truckload of tomatoes. Motivated vegetables on 1,000 acres supplemented in large part by the goal of bringing by another 1,500 acres of primarily cash grandchildren into the farm business, the grains. Business growth has been growth pattern has been not wholly successful enough to enable welcoming a different from Abner and Frieda’s 3rd generation into management positions. approach, but the methods of growth have varied. Expansion and Innovation The story goes that following his day shift Growth during the 1990s was dominated at the Prestolite Battery factory in by mechanization and a change from the Vincennes, Abner would sleep just long traditional markets of entrepreneurs in enough to leave time for him to deliver a pickup trucks, 10-wheelers, and semis truckload of tomatoes to Indianapolis carrying bulk-loaded produce to marketing before returning to his responsibilities at to large grocery store chains purchasing Prestolite. Frieda and sons Mike and Mitch multiple semi-loads each week of cooled helped with production efforts as their fruit in bins or cartons. Expansion during school days allowed. the 2000s involved a new product, asparagus, and even greater mechanization In 1976, Abner and Frieda took a huge that allowed Melon Acres to save on labor gamble, purchasing Snyder Orchards just while increasing the consistency of its north of Oaktown, Indiana to create Melon products. Today, as Abner’s grand- Acres. That first season, the farm children, Autumn, Jacob, and Whitney, produced apples, cantaloupe, tomatoes, become a part of Melon Acres, expansion and watermelon on 75 acres as Abner is being driven by increasing the continued to work full-time at Prestolite. diversification of both products and With the goal of creating an operation marketing techniques while increasing large enough to keep his 2 sons involved efficiencies within the present operation. in the farm with them, Abner traveled to other growing areas of the U.S. to study Today, Melon Acres’ 2,500 acres of methods for growing cantaloupe and production ground is allocated as follows: watermelon. During the next several years, 250 acres to cantaloupe, 390 acres to expansion was predominantly the result of watermelon, 140 acres to sweet corn, 40 2 factors: increasing acreage of cantaloupe acres to cucumbers, 180 acres to and watermelon, and using cultivation asparagus, and the remaining 1,500 acres methods that provided the operation with to seed corn, green beans, corn, wheat,

9 milo, and soybeans. In addition, 3.5 acres Regarding cash crops grown, all ground of high-tunnel covers were installed planted to seed corn is managed to take recently to grow a variety of tomatoes and full advantage of irrigation, in addition to peppers, primarily for retail sale. Most of being coordinated with seed dealers. their ground has sandy soils and is Melon Acres harvests their own cash crops irrigated. They operate on a 3-year crop and does custom harvesting for Pioneer rotation with Mike, son Jake, and cousin Hybrids on other farms. GPS systems used and farm manager, Tom Horrall, to prepare for transplanting produce crops determining the annual field schedule. In and to plant row crops increase plant terms of produce production, multiple density and, thereby, increase profitability. sweet corn varieties are used, allowing Melon Acres to stay in the market longer. Marketing 101 In order to market this kind of production All of the produce is hand-picked, but volume, the Horralls work backwards, once harvested, packing lines are highly starting with market demand automated. Melon Acres’ first grading and characteristics and growth opportunities. packing line was added in 1996, and since How are new markets identified then the Horralls have turned to innovative specifically? Each year in the off-season, technologies that give them first-mover the family sits down and explores market advantages in their markets and allow opportunities, evaluating potential success them to pursue continued growth. Forced in terms of what their farm business does air cooling technology was introduced in well, market risk, demand, market 1991 and later expanded in 1994. For potential, etc. The emphasis on value- cantaloupes, forced air cooling meant that added products only heightens the need for they could pull the heat out of the melons focusing on end-user characteristics. quickly and, at the same time, increase sugar content. In 2009, purchase of a The majority of produce grown is hydro-cooler offered similar benefits to marketed through wholesale channels, sweet corn and asparagus: bins of produce finding its way to grocers and are run through cold water that washes and restaurateurs in the region. There is now cools the produce simultaneously, then the interest from Seasons 52, a restaurant produce is transferred to the forced air chain moving into Indiana, to purchase cooler. locally grown fresh produce from Melon Acres through Indianapolis Fruit. In 2001, they were the first grower in the state to use a watermelon weight-sizer, From a supplier’s perspective, Melon thereby insuring product size consistency. Acres is an attractive candidate for 2 years later, they installed the first sourcing produce because they can supply computerized asparagus sorter and sizer in larger volumes than many other produce the Eastern United States. Today, suppliers and minimize a buyer/vendor’s asparagus is packaged and banded in one- administrative overhead cost. Outside of pound bundles, with the system wholesale operations, Melon Acres automatically programmed to measure the currently operates 2 farm stands in length and width of each asparagus spear. Oaktown and Terre Haute. A possible 3rd farm stand is being considered for the Bloomington area.

10 A smaller, but more novel outlet is Melon serves 3 primary purposes. First, many of Acres’ e-store. On the melonacres.com their existing vendors have demanded 3rd- website, customers may click on the “shop party audits. Second, as has been Melon on-line” button to purchase fresh Acres’ practice from its inception, it asparagus at their getfreshasparagus.com offered a means of staying ahead of the website in 3, 6, 12, and 27 pound competition. Third, consistent with the increments. On-line purchases are incremental approach to Melon Acres’ delivered to the customer’s door by FedEx growth, starting into the process early has in 1 to 3 days. On-line sales have been allowed Melon Acres the opportunity to available for 5 years, with most of the spread the substantial expense of sales attributed to in-state chefs wanting compliance with industry and govern- fresh product. However, by the end of the mental food safety requirements over more 2011 harvest season, Melon Acres had growing seasons. Consequently, one of the shipped to nearly all states, with the biggest benefits to Melon Acres is that obvious exceptions of Alaska and Hawaii. they are better positioned as anticipated Melon Acres employs a website new food safety regulations come into administrator who oversees sales orders existence. and manages price fluctuations in shipping rates. Valuing the Employee Melon Acres is highly dependent on their Generally, few resources are spent on seasonal laborers. Because all produce is promotion. Melon Acres supports local hand-harvested, approximately 250 community events via sponsorship but seasonal workers are needed each year. retail operations rely heavily on long- Previously, Melon Acres coordinated their standing, repeat customers. As of this year, own seasonal labor supply, but they now a new office facility adjacent to the truck contract with U.S. Department of Labor scales will be dedicated to marketing and (USDL)-licensed crew leaders who, in sales operations of the produce crops. turn, assume responsibility for supplying labor teams. There are 2 separate crew One of the most critical production- leaders. The first supplies labor for the marketing links concerns food safety. watermelon harvest, and the other supplies Having completed training at the labor for the harvesting and packing of the University of Georgia in Athens to other produce crops. In addition, there are become HACCP (Hazardous Analysis a minimum of 26-27 employees needed to Critical Control Point) certified, daughter run packing shed operations. Autumn Horrall is Melon Acres’ food safety manager, coordinating the The volume of laborers needed annually business’s annual 3rd-party audit. invites a high degree of oversight from the USDL. Melon Acres works closely with a Development and documentation of representative to ensure compliance with protocol associated with production and The Migrant and Seasonal Agricultural packing procedures and facilities, Worker Protection Act (MSPA) that sanitation, pest-control, and employee establishes employment standards with food safety practices are among FDA’s respect to wages, housing, transportation, concerns. From Melon Acres’ perspective, disclosures, and recordkeeping. The passing annual PrimusLab 3rd-party audits MSPA is described in USDL Fact Sheet

11 #49, which is available on-line at: departure to start his own venture, Mike http://www.dol.gov/whd/mspa/index.htm. and Vicki prioritized the need for a formal Office manager Lucinda Rodrick, now in succession plan. The financial feasibility her 19th year with Melon Acres, notes that question precipitated much of the farm if not compliant, the penalty is likely to business’s pre-succession plan growth and increase as business sales increase. The expansion. By the time middle child, very nature of the penalty for a large Jacob, was in high school, the succession operation like Melon Acres incentivizes plan had been complete—technically 3 migrant labor training, which Lucinda has years in advance of when their oldest, completed. Autumn, formally came back as part- owner. Mike credits a team approach that Their seasonal laborers led the Horralls to draws on the expertise of attorney, build 2 housing facilities to accommodate accountant, and lender among others in laborers working the April to September developing their succession plan. harvest season. Hacienda 1, built in 1992, is a dormitory-style building with no Management Fundamentals kitchen facilities available for individual The scope and scale of Melon Acres’ use. To remedy this situation, the Horralls business operations hints at the hire a chef each year, offering meals for management team’s ability to leverage 3 those interested. Hacienda 2, completed in key management skills. First, Mike Horrall 2003, offers a more apartment-style set-up uses strategic planning as a management whereby cohabitants can prepare their own guide. How the farm approaches new meals. marketing opportunities, technological investment, human resource management, The crew leaders, while responsible for and succession planning are all evidence ensuring enough labor, assume the of a calculated plan. The frequency of off- responsibility of paying individual season meetings is as important as Mike’s laborers from funds paid to them by Melon habit of developing meeting agendas that Acres. Such an arrangement means that include goal planning. As with many experienced and reliable crew leaders are young farmers, Mike and Vicki invested especially valuable, and the Horralls’ goal heavily in their farm business in the early is to work collaboratively with all stages. Not only are there obvious benefits employees to facilitate a positive work to the business’s bottom line, but from a environment. Outside of the labor crews management perspective, Mike is role- coordinated through Department of Labor modeling a forward-looking management licensed crew leaders, Melon Acres strategy to the next generation of estimates they process approximately 100 managers. W-2 returns annually. Second, the Horrall family uses a team A 3rd Generation Comes Back approach to help with the full range of to the Farm business issues encountered. The Mike and Vicki Horrall’s ability to bring succession plan alone necessitated a all three children (Autumn, 24; Jacob, 23; complete team of business advisors to Whitney, 21) into the business inside a 5- ensure the Horralls achieved their planning year window was preceded by years of goals. Family members note that Mike’s planning. Following brother Mitch’s assertiveness at growing the farm business

12 mirrors what he saw in Abner’s efforts to What’s next for Melon Acres? The build on farm capacity for the benefit of possible answers to that question include a the next generation. third retail farmstand, as mentioned earlier, or possibly a brewery/restaurant to Third, the Horralls place a premium on showcase some of their locally grown family harmony. The potential risk of produce. Whatever it is, though, is likely working with one’s family is tempered by to have grown out of a strategic planning frequent communication and involvement session in the off-season. It’s also likely to in strategic discussions. By establishing exemplify two of the Horrals’ important individual areas of expertise for incoming management principles. First, it highlights owners, Mike and Vicki have created a the value of starting with an end-user highly team-oriented approach to their market opportunity and working to meet family business. that demand. Second, the Horrals family- oriented team approach to strategic The family-oriented approach, though, is planning provides valuable management extended to include all of Melon Acres’ lessons for the incoming generation that is employees, signaling the owners’ watching carefully for the know-how and appreciation for employee contribution flexibility to manage the next growth and towards improving the business. Mike, development phase. particularly, is well known among his employees for teasing them good- naturedly, asking their opinions, and thanking them for a good day’s work. The goal of creating a positive work environment is nurtured by treating employees with fairness and respect.

13 T. S. Boyd Grain

T.S. Boyd Grain is a 7,500 acre operation warehousing services. They also operate a that includes production of continuous grain elevator at their home facility and corn, popcorn, wheat, double-crop the Plainville Elevator, which they soybeans, single-crop soybeans, and purchased in 1995. Tom says, “I got earlage. With 2,500 owned acres and started in the grain and trucking business 5,000 rented, they have 4,700 acres in in the early years by simply hauling my continuous corn with yields of 200+ own grain and seeing the opportunities.” bushels per acre. In addition, they own and manage a 100+ truck freight-and- While Tom’s parents decided it was best warehouse business and 2 grain elevators. to split the farm business between their Theirs is an outstanding example of a two sons back in 1978, Tom and Marsha family farm that has grown due to hard have decided it is best to keep their work, superior management skills, and farming, trucking, and elevator businesses strong personal relationships within their together in a 3-way ownership among family, their businesses, and their Tom and Marsha and their two children community. It is a tribute that Purdue’s and spouses. You will enjoy learning more Farm Management Tour is returning for a about T.S. Boyd Grain and their various 3rd time. businesses at: http://www.boydgrain.com/.

Family and Business Overview Farm Business In 1947 Tom Boyd’s parents (Robert and The Boyds’ farm acreage consists of 4,700 Lavern) came to the farm that is now the acres of continuous corn, 1,500 acres of home base of Boyd Grain. Tom finished popcorn, 1,000 acres of wheat plus school in 1968 and started farming with double-crop soybeans, and 300 acres of his parents. By 1978, Tom’s parents, Tom, single-crop soybeans. and a brother had grown the size of the farm to 1,700 acres. At that time Tom’s Boyd Grain has been raising continuous parents decided to split the farm between corn for over 20 years. They have a variety the 2 boys. From that base of about 850 of soils across their land base, and the very acres in 1978, Boyd Grain has grown to best soils are well adapted for continuous 7,500 acres, with 2,500 owned and 5,000 corn. They are averaging 200+ bushels per rented acres. Tom’s brother Steve has acre. These high yields require high-yield developed a successful farming business technology, including high levels of as well. nutrients. Given the large amount of corn residue, they cut or shred stalks into small Today, Tom and his wife Marsha are pieces in the fall, get fertilizer down and joined in the business by their two children then make one-pass tillage, and plant early Trent and Libby. Trent, the farm manager, in the spring. is married to Kim, and Libby is married to Logan Graber, who serves as the They believe high yields are directly operations manager for the trucking related to high plant populations, so they business. In addition to the farm, the plant at the high end of the seed company Boyds have built a large trucking business recommendations. They are considering that includes over 100 trucks and provides how they will be able to continue to

14 increase plant populations in the future, Machinery perhaps by moving to 20″ rows or by twin Tom, Trent, and Logan see their row planting. machinery trading strategy as one of their competitive advantages because they have Where possible they like to use turkey new machinery with large capacity to manure from nearby turkey houses. With quickly complete planting and harvest regard to turkey manure Trent warns, activities. They have been trading for 2 “You better have lots of time and lots of new Case IH combines each year. The specialized equipment, and this makes it Case IH harvesters work well with the costly.” They like to chisel plow to food grade popcorn, and the dealer has incorporate the litter and reduce odor. Soil regular customers that take their 1-year old sampling is on 2.5 acre grids. They have units. moved from a 3-year sampling rotation down to 2 years to more closely monitor Tom says, “We trade for 2 new Case IH soil pH. combines every year, and we let the dealer decide if he also wants to trade out new Sandy soils and rolling ground are better Quad Trac tillage tractors as well.” That adapted for wheat and double-crop does not mean the Boyds let the dealer soybeans. Wheat yields average about 60 make the decision; rather they offer the bushels per acre and double-crop soybeans dealer a dollar level on trade difference at 40 bushels. This same land is used for which they will include up to 5 new popcorn. The mix of soils is to their tractors if the dealer can find buyers for advantage. “Some soils work earlier, and their 1-year old models. All equipment for some it is better to work later,” says uses precision guidance systems. Tom. They plant with 2 John Deere 24 row This year they are raising 1,500 acres of planters and Deere planter tractors that are popcorn under contract with Weaver traded on 2-year intervals. Their sprayer Popcorn Company in Van Buren, Indiana. and air seeder for drilling soybeans and Boyds have a special flexible working wheat are also made by Deere. The Boyds relationship with Weaver where Weaver like to work with multiple dealers, uses between 1,000 and 2,000 acres a year. including 2 different Deere dealers and This gives Weaver flexibility in their Case IH dealer. This gives them establishing the exact acreage they need. better access in securing service, parts, and Popcorn yields have averaged about 5,000 trades, and “helping keep multiple dealers pounds per acre over the past three years. in business is healthy for competition in the long-run,” says Tom. Popcorn requires special treatment both to protect the quality of the seed coat and Land Arrangements because it is food grade. Combines and With 5,000 acres rented, they rent an trucks must be cleaned before being used average of about 200 acres from each of for popcorn, and Roundup Ready their landlords. However, that varies technology cannot be used. Popcorn is considerably. Tom and Trent form special contracted in January, and pricing can be relationships with their landlords. Trent made based on the December corn futures. says, “Our landlords are just like family, and we always treat them that way.” A few

15 of their landlords are non-farming land silage since it does not include the entire investors, so the Boyds help them find and stalk. One advantage for the Boyds is that buy land and work out long-term they harvest the earlage earlier than their arrangements to farm that land. regular field corn, which helps to spread out equipment and labor use. Second, they Trent adds, “We do a lot to help supply one truck load every other day to landowners improve their land. We will the dairy, and this helps to utilize one of put in tile, take out fence rows, tear down the Boyds semis. The Boyds also custom abandoned buildings, and generally help plant 500 acres for this dairy. add value to the properties. Often if the land owner will pay the basic costs, we Relationships Are What Matter will contribute the machinery and labor to When asked the most important key to finish the job in exchange for long-term success, Tom quickly says “It’s the leasing arrangements.” In this way both dedication of our employees.” While there landlord and tenant share the costs of are many keys to their successful business, improvement, but can each receive long- relationships play a very special role. You term benefits as well. Their rental see that in the way they think about their arrangements are mostly cash rent, with landlords as partners in the business of some share rental arrangements. farming. It shows in the relationships with employees who bring their talents to the Unfortunately, the new I-69 Extension business, a number who have been from Evansville to Indianapolis is going dedicated to making the business succeed right through their land. So, the family for 20, 30, or more years. went through negotiations with the state of Indiana for about 200 acres that was But those close relationships also are in affected by the planned route. They settled play with their lender, with their CPA, and with the state in March of 2010, just with their technical advisors, including before land prices began to shoot upward their seed advisor, their agronomist, and in the late summer and fall. As the old chemical representatives. Tom says, “It is saying goes, timing is everything, and, a complex world. You cannot know all of when they tried to repurchase replacement the information yourself, but have to rely land in their neighborhood, they were on individuals that have the knowledge. unable to do so. In the end they purchased Then it is our task to manage that replacement land that was about 20 miles information to a successful end.” Tom and away in the next county. Tom says, “Not Marsha also place a high value on the only did we end up with our largest field most important relationships and that is cut diagonally by the highway, but also within their family and their faith. lost 200 acres in our back yard that is now many miles away.” Keys to Success 1. When God gives you good weather… Another interesting arrangement is “You have to GO!” growing 600-800 acres of earlage for a 2. When God gives you good weather … large dairy about 60 miles away. Earlage “its 7am to Midnight, or more.” is the corn, corn cob, husks, and a small portion of the stalk they ensile in a bunker 3. Spot problems early. Don’t let anything silo. As such, it is more valuable than corn you can control delay the corn planter.

16 4. Reliable equipment gives you a “making Daviess County a better place to competitive edge. live.” They are strong supporters of 5. Be involved in your kid’s lives. Get the Daviess County 4-H and are active members in the Antioch Christian Church. kids involved in the business. Make a place for them if they want to join the Tom and Marsha’s contributions and business. support of local schools, civic clubs, and 6. You have to have DRIVE to be churches are broadly acknowledged. The successful. Boyds may be the number one fans of the 7. Never accept “Can’t Do It”….Push- Washington Hatchets, the sports nickname Push-Push…Until it’s done. for Washington High School. And why not, since the Hatchets have won the 8. Often you have to rely on your faith, but Indiana State Boys High School it is always important to have a banker that Basketball Championship 7 times, the has “faith in you.” most recent being 2011. Tom has 9. In modern farming you almost have to acknowledged this amazing record by get bigger to drive costs lower. painting a tribute on the side of one of his 10. If you are good at business, income tax truck vans listing those championship liability grows, and you better get bigger years. For you Hoosier basketball fans, the years are 1930, 1941, and 1942 with a to manage the tax bite. single state champion and 2005, 2008, 11. If you have diversified businesses you 2010, and 2011 with class 3A state titles. will almost always have one that makes money in any given year. A statement from the 1989 Purdue Farm 12. Relationships are what count. Form Tour provides a nice summary about their deep and genuine relationships with those farm. “Businesses like the Boyds’ don’t just happen, they result from a tremendous who are important to you and those who amount of hard work, planning, good are vital to your business. management, and a willingness to take risk.” Community Relationships Their focus on relationship building And, an overall tribute from their extends to their community as well. In community, “The Boyds have a ‘can do’ 1990 Tom was recognized as a Master attitude on their farm that carries over to Farmer of the Year by Indiana Prairie their community. They feel this Farmer. Tom and Marsha are recipients of community has given them so much and the Indiana's Friends Award from the are determined to give back to the Purdue University Cooperative Extension community in equal measure. They help Service. Recently, the local Chamber of make Daviess County a great place to run Commerce honored Tom with the Hagel a business and raise a family.” Award for outstanding contributions to

17 Carnahan & Sons

Change is a key feature of the Carnahan a “sub-chapter S” corporation. It should farm. In some cases the change can be also be mentioned that along the way Ross easily observed, such as the addition or developed a successful quarter horse deletion of an enterprise, the purchase of business. an implement, or the tiling of a field. The lonely concrete stave silo standing close to Production the farmstead represents changes of this Today production is focused on corn and type. Other changes are not easily soybeans. The division between corn and observed. Changes like production soybeans is approximately 40% corn and processes, crop nutrient prescriptions, or 60% soybeans. They adopted no-till the type of business organization will go production in 1996. This helps minimize undetected, but still contribute to machinery investments and labor efficiency and the bottom line. requirements. Dennis indicates that prior to adopting no-till they had a whole fleet Farm History of tractors. Today the 4,000 acre farm is The Carnahan farm was started by Ross operated with 4 tractors, 24-row corn and Dennis’ parents, Lowell and Ruth planter, 40′ air-drill with 10″ row spacing, Carnahan, in 1937 with 200 rented acres 2 combines, a sprayer, grain cart, disk, and and a dairy herd. The farm headquarters field cultivator. There is also a back hoe moved to the current location in 1958. and bush-hog. Ross joined the business in 1961, farming in partnership with Lowell. The initial New technology developments are grain system construction was completed important in making a decision to replace in 1973. In 1975, Dennis joined the machinery. The price of technology, the business. In 1977, the business was residual value of the trade-in item, and reorganized as a corporation under the projected cash flows are also important in name of W. Lowell Carnahan & Sons, Inc. making a replacement decision. Tax savings were a strong motivation for the change in business organization. Changes to the wheat enterprise also illustrate the types of changes that occur The farm steadily grew in size, primarily on the farm. Historically, wheat has been a through land purchases rather than rental. significant enterprise in the business. The Their largest land purchase, one million farm is located in a region of the state dollars, occurred in 1990. The debt from where wheat and double-crop soybeans are this purchase was retired in 2004. Storage routinely raised. Dennis indicates that in and drying capacity underwent a major most years wheat + soybeans are often expansion in 1998. Willow Valley Farms, their best per-acre net income producer. a partnership between Ross and Dennis, Because of commodity prices, no wheat was created in 2000. was planted in the fall of 2009, the first time in their memory. In fall 2010, the Recently, planning has focused on getting improved price prospects caused the John, the next generation, incorporated Carnahans to return to the wheat enterprise into the business. The farm corporation with the planting of 400 acres. While this has also shifted from a “C” corporation to is fewer acres than usual for the

18 Carnahans, they fully expect to add was adopted in 2009. The corn seeding double-crop soybeans after mid-June rate will vary about 3,000 kernels per acre. wheat harvest. There is only a minimal cost savings in seed corn. Genetically enhanced crops are used in production. Corn has several traits, and Harvest typically starts with soybeans. soybeans are Round-Up™ Ready. Ross Getting the soybeans harvested is a high indicates they are always experimenting priority. During harvest, two combines are with something. They are not the first to used with a single auger wagon. Trucks adopt a new idea or technology, but they are used to haul from fields to the bin site. are early adopters. They like to try new When each load is delivered to the bin site, ideas to see how they perform and then the field the load is from, test weight, move forward from there. moisture, time of day, and which truck was used is recorded. They currently utilize auto-steer, swath control, and variable rate application of Marketing inputs in their production process. The Ross is responsible for grain marketing. first GPS receiver was used in the sprayer. He got his start when one day his father They adopted AutoTrac™ steering in told him that it was his job to market a bin 2006, and it is now used in spraying, of corn. Evidently he did alright because planting, fertilizer application, and harvest. he has been doing it since that experience.

Anhydrous ammonia and other fertilizers The core of their market plan is built are applied using variable rate technology. around 2 philosophies. The first is that Yield maps are not used in making they calculate their cost of production. decisions about application rates. Rather While there is some variation in this rates are adjusted by soil type and yield number depending on yield, it provides potential. When applying nitrogen, there them with more confidence when pricing are 5 to 6 different rates used. Dennis the crop. Second, they don’t look back and estimates that the technology package they think about what might have been. If they are using for fertilizer application saves priced part of the crop and then the market them about 12%. Fields are sampled every moved higher, they don’t spend time other year to monitor P, K, micro- second guessing themselves. They nutrients, and pH. The Carnahans watch recognize that once the first contract is the pH closely. They indicate that the pH filled the next contract will provide a needs to be right so that other things work bigger profit. correctly. Grain produced in excess of the 220,000 Prescription planting for soybeans was bushels of on-farm storage capacity is sold adopted in 2000. Part of this process for fall delivery. They use forward includes variable rate seeding. For contracts to price this grain prior to soybeans, the seeding rate is increased on harvest. When making pricing decisions, the lower productivity soils and reduced Ross uses his close relationships with on the higher productivity soils. They people in the grain industry to increase his estimate they have a soybean seed savings awareness of the possible price trend. For of 8%-10%. Prescription planting for corn

19 the Carnahans, these relationships serve as mapping since 2002 and Dennis has built their marketing service. numerous crop budgets using Excel©.

Inputs are obtained from local dealers. They are able to get spring planting and They view their input suppliers as trusted spraying completed without hiring production consultants. The Carnahans additional labor. In the fall, they hire strive to be fairly loyal customers and additional part-time labor. To attract and develop long-term relationships with retain these employees, they strive to dealers. They feel that the dealers have provide a pleasant work environment and sought to provide them with sound provide competitive compensation. production advice and keep them informed of changes in supply and prices. The The process of training employees is timing of input purchase is based on the typically accomplished by having the new terms being offered for early purchase and employee shadow a more experienced early payment. Because of the good employee. It is recognized that some relationship with input suppliers, these employees will require more direct items are delivered as they are needed, supervision than others. The business reducing the investment in on-farm operates with a decentralized management storage. system built on trust. So for the more experienced employees, an agreement is Human Resources reached setting a target for a result or goal Ross, Dennis, and John serve as the and the details about how this goal is primary labor force for the business. In achieved is left to the individual. addition to each providing general labor Coordination during the day is maintained for the business, each has his area of using cell phones. specialization. With John’s joining the business in 2009, Ross serves as corporate president, the Carnahans have begun the process of manager of the corn enterprise, and grain developing the next generation of marketer. Dennis is the secretary-treasurer management. Since John grew up on the of the corporation, bookkeeper and farm, he had some familiarity with the financial manager, and manager of the business, but he has discovered there is a soybean enterprise. John is the manager of lot that he does not know. Part of his pesticide operations and fleet maintenance. learning process involves giving John Or as John describes it, “I get to spend a responsibility and decision-making lot of time in the cab of a sprayer in the authority for parts of the business. This is spring and summer and in the cab of a helping him to develop management skills truck during the winter.” Pat, Dennis’ in these areas. Just like other new spouse, is a 25% owner of the business employees, part of the education process is and CEO, (Chief Encouragement Officer). shadowing Ross and Dennis and asking lots of questions. Dennis likes to know where things stand. As a result, they adopted their first As a part of developing their transition computer for bookkeeping in 1984. Since plan, the form of business organization then there have been several upgrades. was reviewed. The Carnahans explored They have been using yield monitors and several different alternatives with

20 accountants and lawyers; many of these Inc. is “to maintain an adequate standard involved the use of multiple business of living for each partner, to adopt entities. At this time, they have decided advancements in technology, and to that simple is better and plan to continue prepare for future opportunities.” to operate with only the corporation and partnership. Everyone recognizes the Business Strengths succession plan is critical to the future The strengths of the business include the success of the business, so the partners’ respect and trust in one another, development and performance of this plan the ownership of a significant farmland will be carefully monitored. base, and the appropriate use of technology. As the Carnahans look to the Management Philosophy future, they intend to build on these One task every small business owner faces strengths using incremental growth. is defining success. While business profits Adding John to the business has brought and business growth are often important, new energy and management skills to the in many cases these are not the items that business. They also think that they are define success but rather are a means for well-positioned to add additional acres to achieving success. This is the case with the business when the appropriate the Carnahans. opportunity arises. Given the uncertainty of the current business environment, From a family perspective, success is threats to the business can arise. To make defined as allowing for the personal and sure that business performance is meeting professional growth of each person. or exceeding the success standards the Another aspect of success is providing for Carnahans have set, they monitor the per quality time together at work and in unit cost of production, year-end leisure. From a business perspective, profitability, partners’ salaries, and the success is having a growing business that status of the transition plan. adapts to the needs of the owners. Future Plans The Carnahans have identified 6 keys to The Carnahans plan to continue pursuing managing a successful business. These business growth using their strategy of are: incremental growth. They expect to 1. Enjoy what you do. remain focused on traditional Indiana 2. Know your per unit cost of production. commodities, but they are watching for 3. Be optimistic. diversification opportunities. Each 4. Surround yourself with pleasant and member of the management team will pay talented people. attention to the details associated with 5. Acknowledge your dependence on the their area of responsibility. Business blessings of God. planning will include being prepared for 6. Know your limitations and keep a “long the unexpected. The management view” of goals. organization will continue to focus on helping members of the management team Mission Statement succeed and empowering them to make With this view of success and keys to decisions while enjoying their work. successful management, it is not surprising that the mission of Carnahan and Sons,

21 Villwock Farms

Aside from the standard ups and downs in relocate. But in 2006 Duke Energy entered any given year generated by dynamic, into discussions with Don and Joyce to buy competitive markets and policy impacts, the their farm, shop, grain system, and storage Villwocks have also endured the highs and buildings. The public utility had eminent lows of relocating their farmstead. In some domain in acquiring land for a new power respects, the opportunity to design a plant. The Villwocks began a crash course farmstead from scratch holds appeal, on what that involves and how to proceed. because new facilities with customized Discussions with Duke Energy took nearly 2 features can be very enticing. In other years, but by the same token, it took nearly respects, there are non-monetary costs, such as long for Don and Joyce to find their next as a farmer having to leave the only ground farmstead location. Finally, they were able he’s ever lived on and knows intimately acre to purchase a new farm in 2007. by acre. In the case of Villwock Farms, the Villwock family knows both sides of losing Probably most distressed about moving the the family farm to the threat of eminent farmstead was 88-year-old Carl. To help domain. offset the impending change, Carl worked to find small ways to see pieces of his farm From Here to There endure. One such example was Carl’s Having just graduated from Purdue, Don donation of several trees from the farm for returned home to farm with his father Carl use in building the covered bridge at the and mother Virginia in 1972. For some farm State Fairgrounds in Indianapolis. Though families, this might have been an ideal the effort required jumping through several situation. Carl’s experience with low administrative hoops, Carl managed to see commodity prices and yearly struggles to that his farmstead trees were used in the achieve financial success, however, left him bridge construction. In addition, Don and wanting greater financial security for Don. Joyce chose to relocate theirs and Carl’s Despite Carl’s off-farm career goals for homes on the new farm site rather than build Don, the two farmed “together but separate” new ones. Today, the ground previously for the next 12 years until Carl retired in farmed by Carl and Don is the new site of 1984. Duke Energy’s Edwardsport, Indiana power plant. Don and Joyce married in 1973, and their strategy in the early years was to farm rented Standard Operating Procedure ground because Carl was hesitant to co-sign Day-to-day operations at Villwock Farms for additional land purchases. In hindsight, are managed by farm manager Jason Don credits his father’s cautionary approach Misiniec. Jason also markets grain for select with helping him dodge the 1980s farm landlords and oversees management of 3 crisis that forced so many farmers to default full-time employees. They are Danny on land debts. Abrams, Scott Williams, and Larry Schultz. Joyce Villwock handles the bookkeeping, After 100 years of farming the same ground and Don readily admits he’s more and having achieved Hoosier Homestead comfortable with overseeing management Farm status (1907-2007), the Villwocks and strategizing about the big picture versus never considered they’d be forced to fixing machinery. While all decisions are

22 made collaboratively, Don’s current role as example: white corn must be dried down in Indiana Farm Bureau President doesn’t lend the field to 22% versus starting harvest at itself well to managing daily operations, 28% and using their dryer, which means a even though Don takes his vacation to help delayed corn harvest. It also means choosing plant and harvest. To this end, Jason, Don, soybean variety maturity groups so bean and Joyce have found a system that harvest can get underway before corn. capitalizes on their respective skills and business strengths. Second example: seed soybeans have to be very clean, requiring extra time and labor to This recognition of complementary skills sanitize bins, trucks, grain carts, and goes beyond a superficial level. One of the combines. This is critical to achieving especially interesting management pieces at maximum premiums and future contracts. Villwock Farms is the fact that Don, Joyce, and Jason have all participated in the Third example: there is no Round-up Meyers-Briggs Type Indicator (MBTI), Ready® version of white corn available, so which helps identify how individuals extra precautions are required with chemical perceive their environment and subsequently usage and border isolation. Non GMO white make decisions. At the management level, corn commands a premium over BT white all 3 agree that it has helped them improve varieties, so strict identity preserved their management styles and communication protocols need to be followed in the harvest, practices. Jason also said that, “together with storage and handling process. Don says his previous farm management experience, it end users play a critical role in their has helped me grow into a better manager of production practices. other workers.” Recognizing individual learning styles and tendencies means the To assist with these types of production management team can be more effective at concerns, Villwock Farms also employs the communicating and implementing business services of a certified crop consultant, Gene practices. Flaningam, who assists with soil testing, herbicide and fungicide application The Villwocks and the Misiniecs farm decisions, and scouting crops, among other approximately 3,900 tillable acres. Some of tasks. In addition, Villwock Farms uses this is rented jointly, some individually, and turkey litter as a soil nutrient, though this some is owned by each family. All of the too involves additional equipment, more farm ground can be found in one of four labor, and Flaningam’s advice. counties: Knox, Daviess, Greene, or Sullivan. Villwock Farms grows only value- A separate grain storage facility is located added products, allowing them to capture a near-by on 7 acres. Confronting a nearly slightly higher margin over commodity $90,000 expense to install a three-phase crops. Specific crops grown include food electrical power supply at the farmstead site, grade white corn, seed beans, and seed Don and Joyce instead purchased a near-by wheat, and in the past they have grown 7-acre tract on which to build grain storage popcorn. facilities, closer to a three-phase line. What initially appeared to be problematic has The trade-off to a slightly higher profit since been determined to have some margin is the additional labor and time cost benefits. One such perceived benefit of a associated with value-added grains. First separate location is the marketability of the

23 assets as a stand-alone facility should based on feedback from others offering Villwock Farms choose to sell at a future advice on the pros and cons of alternative date. A second potential benefit is the ability designs. Ripco, Ltd., a grain design/build to minimize truck traffic around Don and firm, played a key role in designing the Joyce’s home in the future, if Villwock grain system. Farms is transferred to Jason as is currently planned. The grain storage site will also be Second, Don believes there are 3 critical the home of their proposed fuel, fertilizer, economic principles driving commodity and chemical storage building. production. Those principles include: (1) selling at a higher market price, which Much the way Don, Joyce, and Jason use a speaks to Villwock Farms’ production of crop consultant for production feedback, value-added grain products, (2) being a low- they turn to other team members, including cost supplier, some of which they have Purdue University experts and marketing achieved through adoption of no-till consultants, to help with other management methods, and (3) increasing yields, which is activities. Specifically, Purdue’s Grain more likely given their team approach Energy Audit Program, managed by Chad involving a certified crop consultant and Martin, offers assessment and recommend- Jason’s relentless quest for higher yields. ations for tracking and minimizing energy usage by grain storage systems. Likewise, Third, Don notes that the management the management team leverages marketing strategy is the same regardless of grain price know-how with help from AgriSource grain levels. That is, Villwock Farms is focused marketing consultants. on margin management, centering on the input-output cost relationship rather than the Managing for Success per bushel price received from their buyers. When asked to identify key management practices that help make Villwock Farms Fourth, Don operates on the principle that successful, Don identified 4 principles that one should “do the best you can at what guide his and Joyce’s farm business. First, you’re doing and people will notice” —a taking a team approach to better manage the strategy he thinks has helped attract landlord farm business is tradition at Villwock attention. The Villwocks and Misiniecs have Farms. The Villwocks have built a strong contracts for 16 rental farms, and these relationship over many years with their landlords all play a critical role in their certified public accountant, David Frette, success. Don, Joyce, and Jason acknowledge and rely on his advice when making major that almost all of the ground they farm for decisions. Their machinery dealers, lenders, others has come at the landlord’s invitation. and attorney also play key roles in They try to keep a positive outlook if rental evaluating business investments. And Don ground is lost for some reason, believing notes that he’s long turned to his fellow that “another and often better opportunity farmers and producer groups, Purdue will come along.” University and Vincennes University, and the private sector for assistance. Don and Looking Ahead Joyce switched to no-till over 20 years ago, In looking ahead, the Villwocks are hopeful following discussions with other farmers they can successfully manage a non-family who had successfully transitioned. Likewise, transfer to Jason and Heather, along with the new shop and grain storage system were their children, Jacob and Lexie. Several

24 factors motivate the transfer plan, including experienced with close family members. an interest in keeping the farm in operation More specifically, Don believes that farm and the positive working relationship among management discussions now are about the Don, Joyce, and Jason. In addition, Don and business and the business alone. Absent are Joyce’s married daughters Sarah and Betsy the personal nuances that sometimes are as yet undecided about their involvement inadvertently influence family business in the farm operation. The potential transfer decisions. would include purchase of all farm assets except for the farm ground, which would be Since Jason’s beginning with Villwock rented to Jason. Farms, Don and Joyce have worked to include him on newly acquired rental The Villwock-Misiniec combination is agreements and to facilitate Jason and somewhat the result of Jason’s ambition and Heather’s purchase of their own farm motivation. When Don first ran for President ground. While the additional ground adds to of Indiana Farm Bureau, Jason knocked on the workload, it also helps the Misiniecs their door and asked if the Villwocks would build equity. Ultimately, Don and Joyce are need managerial help if Don was successful looking to help make the Misiniecs as in the election. His timing was perfect in financially healthy as possible to facilitate that Don would be increasingly pulled away the transition. The transfer process, as with from the operations side of the business and the other aspects of the operation, will draw Jason brought day to day management and on a team of advisors to ensure risks are production experience to the table, having minimized and errors are avoided. worked with other farm operations previously. Since then, the 3 have found the In the end, Villwock Farms appears to have mix of skills and personalities a good fit. transitioned from one farmstead location to another rather smoothly. Some of this The presence of complementary skills and transition success might be attributed to the interests (e.g., Don’s preference for team approach that draws on outside spreadsheets, Joyce’s interest in expertise, their commitment to running their bookkeeping detail, and Jason’s preference farm business as a business first, and their for hands-on production) means Villwock confidence in the management team. Based Farms is leveraging their management on the team’s management philosophies, one know-how. Don also notes that the non- would guess a business transfer will be family dynamic has resulted in better equally as successful. communication among the 3 than is often

Acknowledgements

Purdue University’s Department of Agricultural Economics organizes the annual Indiana Farm Management Tour in cooperation with the Indiana Farm Management Association and Purdue Extension. The tour visits farms and agribusinesses that demonstrate highly successful farm business management practices or have unique perspectives on farm business management. The purpose of the tour is to encourage and develop a high level of management knowledge and skill among Hoosier farmers. This publication profiles the management of the businesses visited during the Indiana Farm Management Tour in 2011.

The tour organizers sincerely appreciate the willingness of the host business owners to share what they have learned about managing their businesses. The organizers also appreciate the sponsoring agencies and companies whose donations of money and goods make it possible to conduct the tour without charging tour participants a large registration fee. As you visit the sponsors listed on the facing page, please thank them. The organizers also thank the many individuals who give of their time to help make the tour as enjoyable, safe, and informative as possible for tour participants, including the outstanding Extension Educators and Specialists who work the tour. For information on future tour dates, please visit .

Tour Director & Profiles Editor

Alan Miller

Tour Organizer

Angela Gloy

Host Extension Educators & Local Arrangements Directors

Sarah Gaughan Scott Monroe

Publication Design, Editing, & Production

Laura Hoelscher Russ Merzdorf Marsha Slopsema

Farm Visit Coordination & Farm Family Interview

Del Unger Farms Bruce Erickson Melon Acres Dan Egel T. S. Boyd Grain Chris Hurt Carnahan & Sons Craig Dobbins Villwock Farms James Mintert

2011 Indiana Farm Management Tour Sponsors

Beck’s Hybrids

Ceres Solutions

Citizens N ational Bank of Paris, IL

Cornelius Manufacturing, Inc.

Farm Credit Services of Mid-America

First Financial Bank

Indiana Farm Bureau

Indiana Farm Management Association

We sincerely appreciate their support!