It’s a fact that agribusiness is most of the business in South Dakota. The world is a hungry place, and with 8 billion humans on planet earth, that’s not about to change.
Things in agribusiness have changed a lot in just the last few years, so much so that It’s a Whole New Ball Game, which is why that was the theme for the open house of Aspect Ag & Frontline Crop solutions this past Friday.
Scott and Eric Bly of Aspect Ag talked about the leap of faith and gut-wrenching personal risks they were taking getting into starting their own distribution company back in 2001. Now, 20 years later, it’s vastly different, but their customers have made it worth it.
“This last year with COVID, it’s sort of a marker for how everything has been going, you learn to work with what you’ve got,” said Scott Bly. “Technology leads to innovation. On the chemical side of things, 2022 will not be better than 2021. We’ve got no more bullets left in the gun. However, if you look at the crops just behind you, you’ll see that on the genetic side, we’re doing pretty good. Twenty years ago, we would not have had crops that looked that good under the conditions we’ve had this year. Balancing your soil is key. Every acre is different, and if carbon is your quarterback, you can have the freedom to choose your players well. We’re going to do everything we can to listen to you, learn what your needs are and help you grow your business. If we can help you do what’s best for your operation, then we’ve done our job.”
Bly also wanted to acknowledge and thank the local Garretson FFA Chapter for their help and serving today’s meal.
“They truly are our future, and we’re proud of them,” he said.
Curt Stoltenberg spoke about the joint venture between Aspect Ag, and Frontline Crop Solutions in making this new building a reality for both organizations. He also wanted to congratulate Art Jones, who’s moving to semi-retired or an “on call” status. Jones has worn many hats over the years.
They introduced and hosted two speakers. The first was Ron McDaniel, who spoke on current world markets for agriculture. He too said that traveling from Minnesota to Garretson, that the best crops he’s seen were right in this area.
McDaniel, 71, said things have changed a lot in the business in his time, just in the last 20 years too. The entrepreneur spirt is alive and well with record yields, especially in corn. World markets are constantly fluctuating, and a lot of that can lead to boom and bust.
McDaniel said the most successful operations he sees are ones that know how to diversify.
“Sell about forty percent of your crop before you plant it,” he said. “Yes, you might not get top price for it, but you can get a reliable income and leave some room for speculation.”
He said that prices fluctuate all the time, and you can make a tidy profit in Asian markets, but that you shouldn’t rely on that either, because when a market goes bust, so will you.
“There is more money than ever in the business, but the margins are tighter,” he said. "Plan for the long term. Guys sitting around drinking coffee in the morning, talking about how big their yield, is something that we maybe shouldn’t be using as a marker of success. If you raise a smaller crop, and make a good profit on it, then you’ve won. But if you raise a huge crop but can’t sell it, well then, what good does it do you?”
He also had some surprising advice, given his audience. “I know some folks won’t want to hear this, but I have to mention the meatless products. Some people will be up in arms about it, but here is the thing, if you can make money on it, you should do it. There is a niche market for it right now. It exists and people are making a profit on it, and it’s only going to get bigger. In some urban sectors, it’s all rage right now, so there if there is a market for it, and you can make money providing product for that market, there is no reason not to do it. I love meat and I’m not going to stop wanting meat ever, but you got to recognize potential income when you see it.”
Next to speak was Lynn Paulson, whose been a banker in Agribusiness since the late 1970’s and early 1980’s.
“Back in the 80’s, it was a different ballgame,” he said. “Interest rates were at 21 percent. It was a very different world. I’ve seen a lot in this business. I’ve been run off the road and had a .357 Magnum pointed at my face. Nowadays there are a lot more zeros and commas on those balance sheets, and that’s not a bad thing, but the margins can be a lot tighter. 2020 was a decent year for most producers, despite all the difficulties. Like Ron was just saying, you have to take the long-term view to success. Planning, good average prices. The markets can go crazy so you have to balance that lifestyle creep, and choose discipline over greed.”
“This year, every industry has had supply chain issues,” he said. “My thoughts for the future are that consolidation is only one step away from monopoly, and monopolies are bad for business. Competition and diversification is what you need for a healthy marketplace. We need then to empower entrepreneurs. Other things we should look for is some of these upcoming carbon credits in the market and optional renewable fuels, and alternative protein sources, something Ron was just talking about. There are huge potential earnings in all of that. In short you need to be efficient and competitive, and don’t bet the farm on trade with China or government payments.”
