Beyond Agriculture

Ag Credit recently attended the Kentucky Cattleman's Association Annual Meeting in Lexington, KY. We hosted a booth at the trade show and had great conversations with individuals involved in many different aspects of agriculture and the rural community.

In this episode:
 Charlie Edgington, Red Barn and Associates
https://www.redbarnandassociates.com/
Dr. Kenny Burdine, University of Kentucky Agricultural Economics
http://agecon.ca.uky.edu/
Babette Overman, Raising Hope
https://www.raisinghopeky.com/

Transcript

[00:00:01.290] - Charlie Edgington
Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of Ag and into the real life stories, conversations and events taking place in our community. Who we are and what we do is beyond Agriculture.

[00:00:24.530] - Ben Robin
Hey, welcome back to the Beyond Agriculture podcast. This has been Robin. I work in the administrative office with Central Kentucky Ag Credit. In 2023, we produced several episodes of the Beyond Agriculture podcast with our Paris branch hosting those episodes. We took a break off mid-year. We had other priorities, other things that our loan officers were involved in, and our focus kind of shifted towards those. So we're glad to be starting back up for 2024. We have a lot of great content already planned out, a lot of good conversations I think we're going to have with people in the Agriculture industry. Hopefully bring you some value in the content that we publish through the podcast. So if you have any suggestions, please reach out to us. You can contact us through our website or shoot us a message on social media. We would love to hear your all suggestions. So, to begin 2024, we attended the Kentucky Cattlemen's Association Annual Meeting beginning of January in Lexington, Kentucky. We had a booth set up there at the trade show. We got to talk to a lot of our customers, a lot of potential customers, a lot of people that are highly involved in Agriculture, and we definitely enjoyed  that.

[00:01:40.180] - Ben Robin
So we hosted podcasts at the trade show at our booth and had some good conversations with some individuals that are familiar with us and some that are not. And so we're going to bring you a few of those conversations here, I think that are pretty valuable for the Ag landscape, Agriculture in general today. So we'll drop you into those conversations now.

[00:02:05.820] - Ben Robin
All righ t, so we're here at KCA convention and got Charlie Edgington here with Red Barn Associates. Charlie, it's good to see you.

[00:02:13.720] - Charlie Edgington
Ben, it's great seeing you, buddy.

[00:02:15.690] - Ben Robin
So just wanted to have you on to kind of give our listeners a little bit of idea of what you do, where you're at, and we'll talk about some farm equipment.

[00:02:24.630] - Charlie Edgington
Super.

[00:02:25.310] - Charlie Edgington
Yeah.

[00:02:26.020] - Charlie Edgington
You mentioned Red Barn and Associates. This is your number ten for being in business. And we appreciate everything with our good friends at Central Kentucky Ag Credit and EXPRESS program a little bit about what we do. We sell new equipment, but we also sell a lot of used equipment. We've been blessed to have nine new lines, and we keep a lot of inventory in stock. And we're here to serve the farmers here in central Kentucky. And I think come see us. Give me a call. We've got plenty of good things going on with some great manufacturers.

[00:02:57.530] - Ben Robin
What did you bring to the trade show today?

[00:03:01.850] - Charlie Edgington
If you look down the road here, we've got an RTech SB 200 vertical beater manure spreader.

[00:03:07.600] - Ben Robin
Yeah, looks like a pretty sweet setup.

[00:03:09.600] - Charlie Edgington
It really is. When you look at material handling, I think you've really got to give a strong look at Artec and that size for our area. Central Kentucky has been wonderful.

[00:03:20.730] - Ben Robin
Yeah, that's awesome. Yeah, it's definitely a big machine. Nice machine. So, yeah, if anybody's interested in that, definitely get in touch with you.

[00:03:27.620] - Charlie Edgington
Absolutely.

[00:03:28.020] - Ben Robin
We'll put your info there in the show notes, so we'll get them sent to you about that ish drill, too. Yeah, there you go.

[00:03:37.270] - Charlie Edgington
That's probably one of the pieces I'm most exciting about. Excited about with the five and a half inch spacing. And in central Kentucky, where we've got to watch folks on the road, sure, we get an opportunity to transport at eight and a half foot, but when we get to the field, we can rotate and have twelve foot of working.

[00:03:56.270] - Ben Robin
It's a big deal.

[00:03:57.180] - Charlie Edgington
It's a big deal.

[00:03:58.000] - Ben Robin
Yeah, that's awesome. Definitely safer on the roads, that's for sure. Yes, for a lot of different people, but no, that's awesome. Like you said, you've got a lot of different lines of equipment, a lot of lines that not necessarily other dealers carry. And so I think you definitely have a good variety of stuff down there in Lancaster.

[00:04:14.630] - Charlie Edgington
Absolutely.

[00:04:15.120] - Ben Robin
That's awesome. Yeah, we'll talk a little bit about farm equipment. We haven't had anybody on yet to talk about kind of the values after the first year. So what are you seeing as far as overall Ag Economy and how it's affecting farm equipment?

[00:04:28.190] - Charlie Edgington
Well, I think we start looking at pricing, and that's what everyone wants to talk about. If steels come down, start looking at labor and the components, and that has just definitely driven machinery cost up. So if you've got good used equipment, you've probably used it for several years. It's probably worth what you gave for it.

[00:04:47.550] - Ben Robin
Yeah.

[00:04:48.180] - Charlie Edgington
Once Again, good used, clean farm equipment is always in high demand, and the newer machinery or new equipment, it's still expensive for what it is. Yes.

[00:05:01.780] - Ben Robin
Well, that's good.

[00:05:02.500] - Ben Robin
Yeah, definitely a lot of things going on the Ag industry, so it's good to kind of keep up with that. But you talked a little bit about the EXPRESS program, Farm Credit EXPRESS program, which is our dealer financing product, and you've got a lot of experience with it and seem to like it.

[00:05:17.750] - Charlie Edgington
It's a wonderful product.

[00:05:20.390] - Ben Robin
Yeah, definitely. For that point of sale, financing seems like a pretty streamlined, simple process.

[00:05:27.210] - Charlie Edgington
Always folks asked how are machinery sales? I always emphasize how's machinery trading?

[00:05:32.850] - Charlie Edgington
Sure.

[00:05:33.580] - Charlie Edgington
That's what we're doing.

[00:05:34.780] - Ben Robin
Yeah, that's right.

[00:05:36.270] - Charlie Edgington
And a level being able to finance machinery in house is the way you're going to sell.

[00:05:43.570] - Charlie Edgington
Sure. Sure.

[00:05:44.320] - Charlie Edgington
We appreciate the partnership on that.

[00:05:47.010] - Ben Robin
You get buyer pull from all across the United States. So we're not just talking, know, Kentucky and central Kentucky. I mean, you've got equipment that people want from all over the United States. So that's, we'll, we'll definitely put your information in the show notes and it was good talking to you and we'll try to have you on Again to kind of give us an update what's going on.

[00:06:08.520] - Charlie Edgington
Absolutely. We appreciate what you all do.

[00:06:10.070] - Charlie Edgington
Yeah.

[00:06:10.250] - Ben Robin
Thank you, Charlie.

[00:06:11.020] - Charlie Edgington
Thank you.

[00:06:12.070] - Ben Robin
All right.

[00:06:12.570] - Ben Robin
So we're here at KCA convention and Dr. Kenny Burdine stopped by the booth. And how are you today?

[00:06:19.030] - Kenny Burdine
Doing well, Ben, how about you?

[00:06:20.560] - Ben Robin
Doing pretty good.

[00:06:21.400] - Kenny Burdine
Pretty good day out there. I think it may change here soon.

[00:06:23.520] - Ben Robin
Yeah, I think so.

[00:06:24.250] - Charlie Edgington
Yeah.

[00:06:24.490] - Ben Robin
Waiting on this weather. It's crazy. So it's one of those, just the time of year, I guess, but a lot of good crowd here and a lot of good cattlemen and women. So, yeah, good time. So what's going on in your world? What do you all got going on in University of Kentucky?

[00:06:39.850] - Kenny Burdine
Well, usual earlier stuff. We more or less wrap up a year with kind of our Farm Bureau outlook presentation and that kind of rolls into outlook publication. So I guess really the week before Christmas we sent around our outlook publication where we go through general overview of last year and expectations for the new year for all our commodities, all our livestock species, all our crops, and even do some forestry stuff. So that kind of how we roll out 2023. And I came back pretty quick and we hit the road. We're recording this on, what is this, the 11th? I guess I left the house Monday morning, the eigth and got back about 07:00 on the 10th and out here today being in Frankfort tomorrow. So I'm back on the road running my mouth.

[00:07:22.740] - Ben Robin
A lot of moving. A lot of moving.

[00:07:23.860] - Ben Robin
Yeah.

[00:07:24.110] - Ben Robin
Well, you talk about the outlook. We are here at the cattlemen's convention. So what's the outlook? What's outlook look like for cattle this year?

[00:07:32.660] - Kenny Burdine
I'm pretty optimistic about 2024. One point I tried to make today in the afternoon session. It's easy to get wrapped up kind of in the current and sometimes lose the big picture. And if you go back and look at what the nearby feeder cattle futures price was in January of 2023, and then where it ended, December of 2023, it was about $0.35- $0.40 higher. So in other words, cattle got a lot stronger throughout the year. Now, unfortunately, between mid September and mid December, they came down a fair amount. In other words, they were even higher than that about September. But it's hard to say that 23 wasn't a good year. So you kind of think about that holistic and then you think about where we are. There's no sign we're growing this cowherd yet, right. We're still heifers on feed. At least the last estimate we got in October was still high. There's no indication that cow slaughter is pulled back. Calf crop is going to be smaller next year.

[00:08:31.590] - Ben Robin
Right.

[00:08:32.150] - Kenny Burdine
So you think about last year and then take an even tighter calf mark, and then it's hard not to be optimistic about what we'll see. I think we'll see better prices in 2024 than we saw in 2020.

[00:08:41.080] - Ben Robin
Sure. Yeah.

[00:08:41.590] - Ben Robin
I mean, all the signs are there. Fundamentals look like that's what's going to happen. So, yeah, definitely interesting time. So as long as I guess we can find some hay. I know that's kind of been an issue. So if we got, we got to get them through the winter.

[00:08:56.490] - Kenny Burdine
I don't know that 2023 drought was as bad as 2022, but the second year always seems like it hits a little harder. We drew down Haystock so much because of the 2022 drought.

[00:09:09.450] - Ben Robin
Right.

[00:09:10.100] - Kenny Burdine
And then we didn't exactly have a stellar hay production year in 2023 either. It's maybe a little more varied last year, but we were certainly dry where I'm at.

[00:09:17.780] - Ben Robin
Right.

[00:09:18.440] - Kenny Burdine
So, yeah, hay supply is an issue and what hay is moving, and not much is moving, by the way, but what hay is moving is moving pretty high price. And I think that's part of why we really are seeing a lot of cows leave. It's hay supply as much as anything else.

[00:09:32.360] - Ben Robin
Right.

[00:09:32.820] - Ben Robin
Well, also a lot of it depends on beef demand. What's that looking like? I know it's not really a time of year to look at it, but anytime is better than now.

[00:09:44.010] - Kenny Burdine
Demand, I think, has been fairly encouraging. In fact, retail beef price, if it's not at a record, it's awfully close. Now, granted, some of that's because production levels are lower and that that's fair, but I really don't think that current, that present demand has been an issue. That probably is the wild card going forward, I'm amazed at how well the economy has seemed to have held up in the face of inflation and major interest rate changes over the last year, which you're well aware. It's a whole new world. And the other thing, if you want to see a scary number, look at U.S. Consumer Savings Rate.

[00:10:26.410] - Ben Robin
Right.

[00:10:27.160] - Kenny Burdine
And I don't track microeconomy much, but I have seen some things that consumer debt is very high. So whenever I see that, I think about vulnerability.

[00:10:34.180] - Ben Robin
Right.

[00:10:35.850] - Kenny Burdine
Like it or not, I think we benefit from this most of the time. But as beef producers, we produce the meat that is the most expensive pound per pound at the retail level. And Again, I think that's a good thing most of the time, but it does make us more vulnerable.

[00:10:49.060] - Ben Robin
Right.

[00:10:51.230] - Kenny Burdine
I'm not predicting that I look for a good year, but if there's a wild card, to me, it's on the demand side. I think the supply side looks really.

[00:10:57.570] - Ben Robin
Well, you know, it's pretty optimistic, I guess. Well, appreciate you talking with us and, yeah, we'll have to catch you Again next time.

[00:11:05.000] - Kenny Burdine
Anytime. Good to, good to bump into you here at convention.

[00:11:07.120] - Ben Robin
That's right. All right.

[00:11:07.850] - Kenny Burdine
Thank you.

[00:11:08.950] - Ben Robin
All right, we're here with Babette Overman with Raising Hope. Babette, how are you?

[00:11:13.590] - Babette Overman
I'm fine. How are you today?

[00:11:14.920] - Ben Robin
Doing good.

[00:11:15.350] - Ben Robin
Doing good. Well, tell us a little bit about Raising Hope and what all you all do.

[00:11:19.070] - Babette Overman
What all we all do. Raising Hope is an initiative, a program under the Kentucky Department of Agriculture. It is a baby program. It is just a little over two years old, and its purpose, its mission, and these are tough things to talk about in the Agriculture community. It is the fact that we need to make sure that the mental and physical health of our farmers is top notch, because we understand when you talk to a farmer, from the morning they get up till the moment they go to bed, their health is the last thing they think about. And I often say it's interesting. They take better care of their animals than they take care of themselves. But in this program, we have several initiatives through grant programs that we have teams of nurses throughout the state that go to events, large events, and we provide health screenings, we do blood pressure, which is, as you know, the silent killer.

[00:12:18.820] - Ben Robin
That's exactly.

[00:12:19.420] - Babette Overman
Glucose, cholesterol. At some events, we actually are able to do vaccines, flu, Covid, tetanus. It all depends on what the needs or what the wishes are of that.

[00:12:29.940] - Ben Robin
Sure.

[00:12:30.930] - Babette Overman
We also provide. This is interesting, one of the projects we do, if you find a day where you are mentally in need of someone to talk to. It is that Famous 988t. So when you place that call to 988, they are allowed to ask you a couple of questions. Where do you live?

[00:12:52.920] - Ben Robin
Sure.

[00:12:53.380] - Babette Overman
What state do you live in? And are you a farmer? If you respond, yes, I'm a farmer. I live in Kentucky. You are immediately transferred to the Pennyroyal 988 center located here in Kentucky. Part of our fundings, which comes from the tobacco settlement. So I can assure everyone we spend our money wisely. Good use, and it is to a very good use. But your call is transferred to a staff member that we have had trained to speak the Language of a Farmer. Because we're different, we speak differently. We are very proud people to be able for us to admit that we need help, that the strength that we Farmers, we're strong people. We can tackle anything, right? But when a Farmer, farm, farmer, family member, someone in the Agriculture industry finds that moment when they need to talk to someone, we can assure them that the person they are speaking with understands what they're talking about.

[00:13:57.040] - Ben Robin
Right.

[00:13:57.290] - Ben Robin
That is the biggest thing. If farmers are going to be open, they want to be open with someone.

[00:14:00.590] - Babette Overman
Who understands very much so what they do. Also, some of the projects that we have funded, I got to remember everything we do. University of Kentucky has developed a curriculum, a soft curriculum approach to suicide awareness. I cannot give you the statistics because they change daily. But everybody needs to know that within the farm community, the statistics for suicide, it's high, it's above the way. I hate to say it, all of us, in all phases of life, we are seeing suicide being right at the very top of Concerns. But this soft approach is through the extension office, 4-H Agents who will be gathering together the older 4-Her. And it is this very specific program to talk about mental health. So they can look among their peers, their family members, and there are certain signs. We don't see all of them. But when you are aware of certain signs that a family member, a fellow student is struggling, they have learned how to ask the right questions.

[00:15:12.450] - Ben Robin
Sure.

[00:15:13.110] - Babette Overman
And when they have made that approach, then they can say, let me help you. I know where we can go. I know who we can call. That's important. Again, when we're looking at suicide rates among our college age and our high school age students, it's there.

[00:15:31.740] - Ben Robin
Right.

[00:15:32.140] - Babette Overman
And it's scary.

[00:15:33.010] - Ben Robin
It is my wife, Savannah Robin, she's.

[00:15:35.940] - Babette Overman
Involved with Savannah and I. We just had this topic in one of our meetings, and it must be addressed. And as we all know, and I talk about it. Personally, I'm very honest and open. Life brings us very interesting avenues of stress and trauma. And when that day comes and that moment comes, you can't wait till tomorrow, right? You can't wait for a week, you can't wait a month. You need someone now.

[00:16:05.250] - Ben Robin
That's right. I'm thankful. We do have programs like Raising Hope that are there in the times when we need them.

[00:16:12.120] - Babette Overman
I have been very fortunate through coming on board as their project coordinator, executive director. I keep the ship going. That through Commissioner Quarles, he realized that I needed an advisory council, I needed people within this industry that I could talk to. I needed their input, I needed their guidance so that we as a group can look at the future plans. Because this is a program that's only going to get bigger, better.

[00:16:46.160] - Ben Robin
Right.

[00:16:46.450] - Babette Overman
That's exactly right.

[00:16:47.680] - Ben Robin
That's awesome.

[00:16:48.480] - Babette Overman
Other additional funding. Last year, it ended in June. We had a grant through USDA that dealt directly with farmer health and situation. So until we see Congress pass the new farm bill, that particular money is not available to us. But as soon as that is passed, we know that we will have additional money. And I know people say, do you have enough money? No.

[00:17:13.960] - Ben Robin
Right.

[00:17:14.380] - Babette Overman
Health screenings alone, we could be someplace every day.

[00:17:17.790] - Ben Robin
Yeah, that's right.

[00:17:18.500] - Babette Overman
That's exactly right. And we do a lot of public speaking. Any entity can call, whether it be your local cattlemen's, homec, extension clubs, FFA chapters. It goes on and on.

[00:17:35.140] - Ben Robin
Broad scope.

[00:17:36.140] - Babette Overman
Yes. We come in, we tell our story, and we say, here are the tools, here are your resources. Let's talk about it.

[00:17:45.220] - Ben Robin
That's great.

[00:17:45.740] - Babette Overman
And it's kind of funny you don't title your introduction. Let's talk suicide.

[00:17:51.950] - Ben Robin
Sure.

[00:17:53.190] - Babette Overman
We have found the right words to be able to go and tell the story. Another very great program that we funded was farmer appreciation. We know of the stigma.

[00:18:04.980] - Ben Robin
Right.

[00:18:05.420] - Babette Overman
We know what people think. And it was decided to do a farmer appreciation program because we know the farmer feels very unappreciated.

[00:18:13.430] - Ben Robin
Right.

[00:18:13.780] - Babette Overman
They just think we make lots of money.

[00:18:17.360] - Ben Robin
Right? Exactly. Yeah.

[00:18:18.350] - Babette Overman
You got this. Great.

[00:18:18.910] - Ben Robin
See the price check?

[00:18:22.110] - Babette Overman
Yeah, we wish, right?

[00:18:23.650] - Ben Robin
Exactly.

[00:18:24.280] - Babette Overman
So it was decided to take some of this monies and develop a farmer appreciation project program so anyone could fill out this application. If you had a great idea of an event, a program, a way to thank the farmers in your community, send it in. 16 projects were selected out of over 40 that were submitted. The grant monies awarded range from anywhere from $200 to $5,000. $5,000 was the cap and one of the most amazing projects that came forth. Two Kentucky artisans, ladies that live in the Burksville area, nothing to do with Agriculture, connected to the Kentucky Humanities art program, decided, let's submit something. And they submitted this mural art project. That is amazing.

[00:19:19.840] - Ben Robin
That's awesome.

[00:19:20.820] - Babette Overman
And that project was finally completed. And I have the honor. I was so humbled and so honored to be at the event where this, what is it? 18 x 20 foot huge banner was placed on a very historic building on the road that goes from Berksville to Glasgow.

[00:19:43.570] - Ben Robin
That's awesome.

[00:19:44.330] - Babette Overman
And the notoriety, the people that stop, in fact, I have friends who live in the Berksville area, it's their summer home, was driving that road and saw it and called and said, Babette, is that you Raising Hope? Well, it's not really me, but I'm connected to it. And yes, this is the project. So I hear from a lot of people that have seen it and appreciate it. But when we saw this banner and saw the impact it could make, that's when we wanted to make it available to anyone.

[00:20:18.810] - Ben Robin
Sure.

[00:20:19.500] - Babette Overman
So we have made it into fence post. Right. Fence post size. Fence size. And guess who came forward.

[00:20:30.560] - Ben Robin
Yeah, that's right.

[00:20:31.850] - Babette Overman
And as you know, to have your entity come on aboard and support this and doing what you're doing, and I'm sure you're going to help tell the story what you're doing, it's amazing.

[00:20:46.370] - Ben Robin
It is. I don't want to go away from what you were just saying about the projects because I'm involved with Bourbon County Farm Bureau and I think Bourbon County Farm Bureau may have gotten one.

[00:20:55.040] - Babette Overman
They're getting one

[00:20:57.460] - Ben Robin
But no, that's great. No, the signs. We had some posts out there on social media that we're glad to partner with you all.

[00:21:06.220] - Babette Overman
And I heard the number of people who saw that post skyrocket.

[00:21:10.540] - Ben Robin
Yeah, well, I mean, just bringing awareness to it. We deal with the financial side of things and we understand that stress that farmers go through and just bringing that awareness.

[00:21:20.560] - Babette Overman
I think the other thing that has been very fortunate for me as Raising Hope and also as a past President of Kentucky Women in Ag, is the fact that I also was able to join in on the Annie's Project that you sponsor. And that, Again, to be able to have Raising Hope, be part of that project and let those women of Agriculture know, we're available, like in so many things. And not that this is good or bad, it's just a way of life that mental health, men handle it differently than women. And so, again, in approaching mental health and having the opportunity to speak at Annie's Projects events allows us to talk the language that we need to talk to a woman.

[00:22:09.350] - Ben Robin
Sure.

[00:22:10.000] - Babette Overman
And I tell everybody Again, I'm a prime example. When I turned 65, and Kirby and I, my husband, we're selling vegetables and delivering to 65 schools and farmers markets, and on and on it goes.

[00:22:24.860] - Ben Robin
Right.

[00:22:25.470] - Babette Overman
I thought, boy, Babette, I'm in good health, probably better than I've ever been. And at 65, of course, you're told you need to go have a big time physical.

[00:22:34.120] - Ben Robin
Sure.

[00:22:34.560] - Babette Overman
And that's when I was told, babet, did you know you have an irregular heartbeat? No. Babette, did you know that your blood pressure was at this level? No. Did you know your cholesterol? No. I took the news to heart.

[00:22:52.700] - Ben Robin
Yeah, sure.

[00:22:53.510] - Babette Overman
And immediately changed my lifestyle, my eating habits, and so now I can proudly say, yeah, my cholesterol is under control, blood pressure, most of the time, under control. Right. And the fact that now I know that I have to be aware of my heart and take care of it.

[00:23:13.390] - Ben Robin
Exactly.

[00:23:13.890] - Babette Overman
So Again, I thank all of you for giving us the opportunity to be part of that wonderful Annie's project. It's wonderful.

[00:23:22.810] - Ben Robin
We appreciate everything that you do. And thanks for spending some time with us today at the cattleman's convention to talk about reverse Raising Hope.

[00:23:31.000] - Babette Overman
I thank you for your support. And we are just doing what I tell this everybody. It's what our heart tells us to do.

[00:23:38.440] - Ben Robin
Exactly.

[00:23:38.710] - Babette Overman
Because we're concerned and we care. And in life, you must pay it forward.

[00:23:43.320] - Ben Robin
You're exactly right.

[00:23:44.070] - Ben Robin
We need more of that. Thank you very much.

[00:23:46.640] - Charlie Edgington
Yeah.

[00:23:46.890] - Ben Robin
Appreciate it.

[00:23:50.170] - Speaker 7
This episode of Beyond Agriculture is brought to you by Central Kentucky Ag Credit thanks for listening to the podcast. Be sure to visit Agcreditonline.com/beyondagriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for beyond Agriculture.

 

 The crew talks with Ag Credit's Chief Risk Officer Shane Turner and Staff Appraiser Bud Burdette about the appraisal process, evaluating land, and current market trends. 

View Transcript

[00:00:01.210] - Caleb Sadler
 Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello, and welcome in to Beyond Agriculture. Caleb Sadler back with you today. Also joined with Tom Zack Evans. How are you doing, Tom Zach?

[00:00:31.070] - Tom Zack Evans
Good. 

[00:00:32.790] - Caleb Sadler
We're also joined with a few special guests from the association that work for us as well, Mr. Shane Turner and Mr. Bud Burdette. How are you all doing today?

[00:00:41.330] - Bud Burdette
Doing well, doing well.

[00:00:42.740] - Shane Turner
Thanks for having us.

[00:00:43.680] - Caleb Sadler
Good. So we'll get started here. Shane, how about you tell us a little bit about yourself and then Tom Zach and I'll ask you a few questions and see what we can come up with.

[00:00:52.820] - Shane Turner
Sure. Well, I grew up in Garrard county in the big metropolis of Paint Lick. Went to Garrard County High School and then went on to Eastern Kentucky University and majored in marketing and went back in '06 and finished up my MBA there. Been with the association for nearly 34 years, full time, started back as a student intern in 1987. Our former CEO, Jim Caldwell came to AG finance class, Dr. Lindsay Horn, and asked if there was anybody that wanted to do any summer work at the time, and Dr. Horn recommended me. So I worked two years as a student intern, started full time in 1990, and the rest is history.

[00:01:44.370] - Caleb Sadler
So, 1990.

[00:01:46.130] - Tom Zack Evans
tell us a little bit.

[00:01:46.950] - Tom Zack Evans
About your family and your farming operation, Shane

[00:01:49.320] - Shane Turner
 Sure. I farm with my brother. He's a full time farmer in Garrett Madison County. His name is Heath Turner. I go down on the weekends and get in his hair and tell him what he needs to do, straighten him out for the week. But he does a really good job. We have a cow calf operation and a bread heifer operation. We farm approximately together about 350 acres in Madison and Garrard County.

[00:02:17.450] - Tom Zack Evans
Okay, and how many kids?

[00:02:19.570] - Shane Turner
We have three kids. I have a 20 year old at UK, a 19 year old who is at BCTC, and I have a 16 year old at Frederick Douglas who is heavily involved in volleyball right now. And we do a lot of traveling with that.

[00:02:35.600] - Tom Zack Evans
Good deal.

[00:02:36.600] - Caleb Sadler
So over the years from the association that you've been here since you've been here a long time and a lot of valuable information you've passed on to us as the younger loan officers, but kind of tell us a little bit about the positions that you served in since you started with the association.

[00:02:50.990] - Shane Turner
Sure. Well, I started out as a loan officer in the Richmond branch office with working with Rob Anderson and then John Thomas. After that, I moved over to the Stanford branch office as a loan officer working with Paul Weiler. Back in the 1990s, the savings and loan crisis created a need to have certified appraisers and so that's when I went over into got my appraisal certification, came state certified, general certified, and then started working for the association internally, doing farm appraisals and rural homes, stuff like that. And I did that for several years. Then I was pulled back into the credit side as branch manager for the Lexington branch office. Then I became the regional manager for Georgetown at the time, Lexington and Paris. And then later on, I became Vice President of Credit over Lexington, Paris, and Richmond, as well as a Frankfort office, which is a new office that we had opened up. And then in 2017, I became the Chief Risk Officer for the association.

[00:04:11.430] - Caleb Sadler
So, needless to say, over the past 34 years, you've worn several hats across the association.

[00:04:17.270] - Shane Turner
That's putting it lightly.

[00:04:19.410] - Caleb Sadler
So the last position you're in right now, the Chief Risk Officers, what is that position? Tell us a little bit about that and the role that you do in that position for the association.

[00:04:29.100] - Shane Turner
Sure. The Chief risk Officer position was a new position that Jim Caldwell, our former CEO, created. Nobody had that role when I took it 2017. But because we had grown so much, he felt the need to kind of help Jonathan Noe, who was a Chief Credit Officer at the time, with some of the duties that he had and kind of shift maybe the risk piece of the association off of him and kind of let me take over. I also serve right now as the audit Coordinator for the association. I serve as the CEC, the Collateral Evaluation Coordinator and the compliance officer. And the safe act officer. So I've got a few roles that.

[00:05:15.880] - Caleb Sadler
I was going to say a Chief Risk Officer really encompasses a lot more.

[00:05:19.210] - Tom Zack Evans
Than what in addition to working with the appraisals yes.

[00:05:23.910] - Shane Turner
That falls under the purview of the collateral valuation coordinator. I basically handle all of the appraisals that are requested by the lending staff come through me. That is one of the things that our regulator wants, is to have that buffer so that there's no undue influence. So when an appraisal request comes in, I will look at the assignment and then I'll send the appraisal request out to the appraiser who I think best feels that need it's competent to do the assignment.

[00:05:59.650] - Tom Zack Evans
Okay.

[00:06:01.090] - Tom Zack Evans
So now we can lead into kind of how the loan process works and how all this ties together with the appraisers. So when someone inquires about a loan, they might be doing that online, in person, over the phone, and they generally start with a loan application. Depending on the size of the loan, we'll determine if just an application and driver's license coupled with a field visit to see the collateral will suffice for some of the small cattle and equipment loans. Or obviously, if it's a larger real estate loan, it's more complex. Then we will get three years of tax returns, a balance sheet or financial statement to analyze the loan. And then once the loan is approved by the appropriate employee or executive loan committee or even approved by the loan officer at that point, then we will request an appraisal of the property. So that's where Shane comes in and of course, Bud and whoever the appraiser is going to be on the assignment.

[00:07:12.650] - Caleb Sadler
And that's a good way to transition here, too. Bud, I want you to introduce yourself a little bit and tell a little bit about how long you've been with the association and what your roles are here as well.

[00:07:23.620] - Bud Burdette
Okay. I started with AG Credit in August of 2005, and prior to that, I had done some appraisal education and done some fee work with a residential group out of Harrodsburg. And I took the job kind of as a retirement job.

[00:07:48.230] - Caleb Sadler
It's turned into more than that. Right.

[00:07:49.990] - Bud Burdette
We had about 30 years in the dairy business, so farming is near and dear to my heart, and this was a great fit has been to the to this day.

[00:08:00.460] - Caleb Sadler
Good deal. Now, you are the association appraiser. Yes. Tell us a little bit about what that role entails and I guess some of the things that you've seen over the years.

[00:08:12.620] - Bud Burdette
Okay, well, my job description basically is to do appraisal assignments that qualify under a general state certification, which I got in 2008, I think it was. But it also includes keeping data on current sales data throughout the association. It also includes being available to council loan guys on values in the area and information they may require that way. And currently it involves training a young lady, Blair Rainey from Washington County, as she begins her appraisal training and in lieu of her certification down the pike. It's a good job. I enjoy it very much and it's a lot of interaction. I get opportunity to visit and to work with every loan office, which is kind of unusual. I get to know people very well.

[00:09:14.550] - Shane Turner
One of the things that I would interject here and say is that Bud being our staff appraiser, he typically gets assigned some of the more complex properties, the horse farms or the large acreage. A lot of people ask us, why do we have a staff Appraiser or appraisers rather than just hiring a normal Appraiser that's in the open market that works independently? Our appraisers go through specialized training through the American Society of Farm Managers and Rural Appraisers, and that is a professional organization that specializes in rural properties. And not every Appraiser out there, even though they may have a state certified general designation, may not have had this type of specialized training. And so I will send these complex, highly important appraisals over to Bud and eventually over to Blair because they've had this training that we seek.

[00:10:21.910] - Caleb Sadler
Got you. I'm going to ask both of you all this one because it's going to kind of circle back here, but both of you all been with the association for several years now and you've seen a lot of trends over the years, I guess. Tell us a little bit about those trends. What have you all witnessed and do you see any of those trends repeating themselves?

[00:10:44.270] - Bud Burdette
I'll start I was fairly new here when in 2008 and 9, and some things that I noted that were very obvious was on the residential side, lot sales stopped even in the more active markets. Scott County, Madison County, it's dried on the vine and land sales really slowed to a trickle. Some counties different than others, but we really didn't start seeing a significant amount of land sales till maybe the end of 2010 into 2011. So the market, there are some sales that will have to happen just based on life event. Yes, so these will happen. But an active market, you're going to have multiple buyers and this thing, when you're going through changes, the market sends you signals that things are slowing or speeding up either way.

[00:12:00.950] - Caleb Sadler
I'll even relate to that too, because you brought up a really good point. It wasn't necessarily some of the AG side the housing market in 2008, but we had a really bad drought in 2010. I'm just going back to my memory and then we saw elevated grain prices right after that, which kind of fueled.

[00:12:19.460] - Tom Zack Evans
Created a grain boom there of 2012 for sure, and folks seeking more land to raise grain and obviously more equipment followed with that.

[00:12:32.270] - Caleb Sadler
So basically when you get an assignment for an appraisal, tell us a little bit about the process that you go through and some of the steps that you do in that. And I guess, Shane, you could feed into that too.

[00:12:43.080] - Shane Turner
Well, I'll kind of start out since I'm kind of the front end of the process. Again, once I get an assignment that's sent to me from a loan officer requesting an appraisal, I will look at the material that they provided for me aerial photographs, construction plans, PVA cards, soul maps, etc. And make a determination out of the list of appraisers that I normally use. Who's the most qualified to do this assignment? And so let's take a complicated property that's highly improved, a working farm, large acreage. I would normally send that to Bud. I have a couple of more appraisers fee appraisers that we use, but I would send that to Bud or one of the qualified fee appraisers to basically, I'll send an engagement letter to them and kind of give them some instructions as to what's going on with the deal along with the attachments that were sent to me by the loan officer. And then within a 30 day period, something reasonable. These things can't be turned around in a week like a home appraisal can be because there's a lot of inspection work that goes on and courthouse work and things behind the scene analysis and things like that with the comp sales that you just don't have with a home appraisal.

[00:14:09.470] - Shane Turner
But Bud, we'll take it from there and kind of tell them the process that you go through.

[00:14:15.590] - Bud Burdette
Well, I think probably the first thing that I'd like to say is that when a person gets an appraisal, at least through us, they can rest assured that we put enough work into it so that they're getting an accurate product, something that is reliable in the market as of the date we do it. Okay. The other thing is we really attempt, no matter the scale of the appraisal, they all are done exactly the same way the same steps are done. It's our intent that they're getting information that correctly defines their property from acreage to ownership records to whatever. All those steps are taken immediately. And then we have a process through which we gather sales data, weed through it, analyze it. We have a word we call extract break down sales. And we compare apples to apples. And it really is, from an analysis standpoint, that simple. The trick is figuring out what are apples and what are oranges.

[00:15:30.910] - Caleb Sadler
Yeah, that's exactly right.

[00:15:32.640] - Bud Burdette
And the other thing, and I'll just make this statement because people I wouldn't have understood it, but now I do. You never know what is complex when it hits the door. You have no clue. I've seen ten acre tracks be harder than a horse farm. It all depends on the shape and just all kinds of things. On the legal description, it can be anything. But just rest assured when the work is done that you're getting our best effort up front. And we do the same analysis for every single piece. Doesn't matter who the borrower is.

[00:16:10.310] - Shane Turner
And we ask our appraisers, whether it's Bud or Blair or our fee appraisers. We have an expectation of a level of independence and we want them to feel free and to be able to put an assignment together and not have fear that if they don't hit the mark, that they don't get another job. We have a fiduciary responsibility to our customer who's come in and place their trust in us to basically give them a fair estimate of what we believe the property is worth.

[00:16:50.710] - Bud Burdette
Exactly.

[00:16:51.400] - Caleb Sadler
The worst thing we can do is get them in a position to where they're either upside down on the property right away or what? I mean, that's just not our intention.

[00:16:59.950] - Shane Turner
It is not. And it is not our job or intent to kill deals either. We have a lot of very good realtors out there who are perfectly capable of advising their buyer, their seller upfront. And we typically work really well with the real estate side of it, the realtors. But we also have a level of independence too, and a responsibility to our customer and to the association to be independent and honest about the values that are put on these properties.

[00:17:35.320] - Caleb Sadler
So in terms of value in a property, I know there's a couple of different ways that we look at that. Can you all kind of explain the difference there? I know there's a cost approach side and some of that when I'm dealing.

[00:17:47.600] - Bud Burdette
With a heavily AG property, property that you can make money from the production of the land, I will typically break the soils down by their land classes, by their productivity, and compare my comps exactly the same way. And we call that a cost approach. The buildings are done the same way, and then we sum differences in value based on our comparables. And then the other approach that we most commonly use is a sales comparison approach. And that simply is comparing one sale to the next and making adjustments that reflect what the subject looks like. Okay. So that when I get my values, I'm actually changing the sales in the grid that I use my comparable sales so that they look like the subject.

[00:18:44.080] - Caleb Sadler
Got you.

[00:18:44.630] - Bud Burdette
And I weigh them accordingly so that we balance the sales so that we have a picture of the subject property, and then we compare that back to the cost approach. And if I've got a farm that is in heavy production that's making money from the land, we can insert an income approach and make estimates on cash rents and this type of thing and net income and back out of value that way, too. And so we end up basically reconciling three approaches to value to get a value that we feel comfortable with.

[00:19:22.740] - Caleb Sadler
Got you.

[00:19:23.360] - Tom Zack Evans
And Bud, too. If you could explain a little bit about how the sales need to be relative in location, in time. What are some of those that you look at? The relativity.

[00:19:38.080] - Bud Burdette
Yes, every county that we work in is different, but every county also has similarities. There are certain areas within a county that are comparable based on location access, soils, land use. Okay. And these can vary significantly, but every county has them. And I would encourage the folks that hear this if they have a Sunday afternoon, just get in their car in their county and drive around to the different areas and just notice the differences in different parts of the county. Terrain, access, land use, all these things come to play. And I go back to apples to apples. But we have to balance land use, location access when we select our comparables. Yeah.

[00:20:34.700] - Tom Zack Evans
25 acres that's wooded with a hillside would have a value versus 25 acres that's prime crop land would also have another value. So I think that's a lot for people to think about when they're looking at buying properties. What you're after there?

[00:20:53.380] - Bud Burdette
Well, one thing, and this might simplify it, we use a term called buyer pool. When I select comparables, I'm looking for land that has the same group of buyers interested in it. And if I select out of that pool, I'm inaccurate.

[00:21:14.250] - Caleb Sadler
I'll go back and say, this what you were talking about there bud with getting in the car and driving around one Sunday afternoon. It's amazing how fast the topography in a county will change. I mean, you can go from one road and go a mile down the road and it's totally different real estate than where you were before. So just keep that in mind too.

[00:21:34.420] - Bud Burdette
Yes.

[00:21:35.180] - Shane Turner
And another aspect of the appraisal process too early on in the assignment is determining highest and best use. That's an exercise that all appraisers go through because if you miss highest and best use up front, then it will throw the whole report off. And basically what I mean by highest and best use is the property may be farmed right now, they may have row crops, they may have cattle on it, but if it's setting in downtown Lexington on Man O War, farming may not be the highest and best use of that property. And so the appraiser has to make that determination. And sometimes those nuances aren't as clear as the example I just gave. And it can be tough trying to determine what the highest and best use of a property is because it determines your comps, it determines the approaches to value that you use. So if you don't get that right, then the whole report may not be credible.

[00:22:43.330] - Caleb Sadler
So we'll circle back up here from a lending standpoint and what Tom Zach and I do as loan officers. Shane, tell us a little bit about why we do the appraisals and why we need that.

[00:22:56.410] - Shane Turner
Well, the appraisal function is a critical part of the total credit package. It basically lets us know what security position we are in on that credit package in the event of default. And we try everything that we can to avoid default. Sometimes it happens, but it lets us know as an association, it lets our regulators know how well secured a credit package is going into the deal. And we use the term loan to value. And so we have underwriting standards based on whatever the appraised value comes back to determine what acceptable loan to values that we can have. If it exceeds a certain threshold, we may have to go a certain route outside of our normal. Underwriting standards such as an FSA guarantee, there's a lot of options that we can do even if it's a very high loan to value. So we try to present several options to the customer rather than just having a hard 80% or 75% loan to value because not a lot of people, especially on a big farm, have 25% cash to infuse into a deal.

[00:24:15.760] - Caleb Sadler
You start talking about a lot of money really quick when you get up those sizable properties of 100 acres or so.

[00:24:21.240] - Shane Turner
That's right.

[00:24:23.250] - Caleb Sadler
So as we wrap up a little bit, what are some things that I guess you could say if you were going to list a property or even you were looking to maintain value, what are some of those things on the property you can do to keep up the value where it's not going to decrease over time?

[00:24:40.170] - Bud Burdette
Well, I think maintenance is a big thing. Maintenance of buildings that have good use, good utility. Just keeping up a small storage building or something may not be. And I think you have to realize that curb appeal comes into play in more residential type properties and for farm buildings. I think when we look at a complex farm with a lot of improvements, if you're a buyer, when you look to purchase property and it's got additional buildings on top of the land, what's it going to cost to keep this place in shape, to keep it up? Very simply, the way you would look at anybody would look at a piece of property, what is the best value for my dollar? So if he's buying buildings that have good utility and are well maintained and they contribute to the use of the land, then they're going to contribute more to the farm. If the soils are well maintained and fertile and cared for, he can walk in the door tomorrow and get good use of the land. And I think all these things contribute from our personal standpoint. I think good maintenance and good production are signals of management.

[00:26:10.470] - Caleb Sadler
I would equate that back over on our side too, when we're determining the credit. I mean, a farm that's well maintained and manicured properly, the man factor is there in terms of a maintenance standpoint. I agree with that. So discussing like, future value here, where do you all see trends going in terms of real estate prices? I mean, obviously right now our interest rates seem to be affecting things just from the standpoint that they're elevated. But do you all see that affecting things? And what trends are we seeing there?

[00:26:45.490] - Shane Turner
We've seen farm real estate spike up pretty significantly here over the past several years. We had a lot of government infusion of money and people buying things when interest rates were extremely low, which really put pressure on the market and drove values up. I haven't seen a lot of softening just yet in that we've seen the market slow down. But historically speaking, real estate investment has has been a pretty safe investment when you're looking at a longer time horizon. Now, if you're trying just like stocks, if you're trying to time the market, get in and get out, you can get burned. But over time, real estate has probably returned 7% to 10% appreciation over a long time horizon. So I like farm real estate. I own farm real estate and we lend on it. So I'm pretty bullish on it.

[00:27:46.600] - Caleb Sadler
It's probably consistent too, when you start equating that back over to like a return on investment, like a 401K little more consistent, you don't have the ups and downs that you would.

[00:27:55.780] - Shane Turner
And I like, I can go out and see my farm. That's exactly right. Go out and walk on.

[00:28:02.410] - Caleb Sadler
It the days where the market drops 300 points, that makes you glad you got a farm. That's exactly right.

[00:28:11.630] - Bud Burdette
The only thing I would add to that it's impossible to predict the future, but COVID I think taught us something that people buy real estate for reasons that we sometimes don't track. And a lot of times in this business, we try to take a very fluctuating market and make it average so that the loan process makes sense. I don't really know what the future brings, but I think it depends a lot on the other markets, what's going on. Like you said, in any kind of your investment market or we still have a high cattle market, we have commodity markets are high, we're seeing drop offs, input cost and fertilizers and things like that. As long as the balance is there and folks can make payments, I think the demand for good land is going to be strong. Recreational land, residential land, those are going to depend more on your interest rate fluctuations, your disposable income, things like that, that are they're a little more tied into that. So yeah, I mean, over time I think it is fairly steady. But boy, there's some bumps in the middle.

[00:29:52.510] - Shane Turner
We're very lucky where we live here in central Kentucky. Because unlike in the corn belt in the middle of Illinois or Iowa, places like that, where farmland values are driven strictly by commodity prices, in most cases you have a lot of influences that push values here in central Kentucky. Just with the non farm employment that we have and our capital right here in central Kentucky and industry and things like that. So you have a lot of things that help maintain value and even push value up as far as demand because of the place that we live, Central Kentucky.

[00:30:41.770] - Caleb Sadler
I always say if you drive down Paris Pike or from Paris to Lexington, it's one of the most beautiful drives in the state of Kentucky, I think. So this was all the horse farms and everything else that's going on there. Well, as we wrap up today, I really appreciate Shane and Bud, you all taking the time out of your all schedule to come on and be on Beyond Agriculture. And we also want to thank our listeners today for tuning in and listening. So be sure to go out and like subscribe and share our podcast and we look forward to hearing or seeing you back on Beyond Agriculture in the future.

[00:31:16.090] 
This episode of Beyond Agriculture is brought to you by Central Kentucky AG Credit. Thanks for listening to the podcast. Be sure to visit agcreditonline.com Beyond Agriculture, access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

Join Caleb and Ben as they sit down at Rankin Run Farms and speak to Zach Bartenslager, Charlie Adkins, and John Rankin about the partnership they have formed between Vytelle, CB Genetics, and Rankin Run Farms. 

Click here to learn more about Vytelle 

Click here to learn more about CB Genetics

View Transcript

Caleb Sadler (00:00)
Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations, and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello. Welcome in to Beyond Agriculture. Caleb Sadler, your host here. We're out at Rankin Run Farms here in Bourbon County. Today we're joined with CB Genetics with Charlie Atkins on the phone, Zach Bartenschlager here in the studio, as well as John Rankin, the owner of Rankin Family or Rankin Run Farms. I'm sorry about that. So anyway, we're joined here today to talk a little bit about Vytelle, and I guess you could say the genetic side in terms of flushing cows. So, Zach, we'll start with you. I've kind of known you for a while now, but I'll let you introduce yourself.

Zach Bartenschlager (01:00)
Yeah, I appreciate that, and thank you guys for the invitation, and we're pleased to join the podcast. Like Caleb said, Vytelle is a unique platform. It's an integrated technology platform built to accelerate genetic progress in cattle. And so, specifically, that what we're talking about here today is we have three parts to our platform. We're talking about the advanced side. The advanced side is our IVF portion of our company. And so here at Rankin Run Farms, we're powered by CB Genetics, is powered by Vytelle. And so, we actually collect donors and send those oocytes off to the lab and then create the embryos in the lab and provide those back for producers.
 

Caleb Sadler (01:51)
I'm going to go a little step further. Zach and Charlie, you speak into this too, because we're going to have a lot of listeners that really are, I guess you could say, uneducated on this side here today. So I'll let you all kind of, if they were first time listeners, just picking up the podcast and listening today, tell us a little bit about those embryos and what those are and things like that.

Charlie Atkins (02:12)
Okay, so the way it works with CB Genetics through Vytelle is everything kind of goes through us. We help all the clients manage the mating forms, the semen that needs to get to the lab for the matings. And there's no set up, no drugs in this process. We'll do a schedule for, like, just, say, today at Rankin Run Farms, I think we had 18 head today, and we scheduled it every 15 minutes a cow and you come we already got the mating form done. You either bring semen to the aspiration to the location, or we can help you get it sent to the lab beforehand. And after that, it's all pretty simple. You drop your cow off, we run her through the shoot. It takes anywhere between ten to 20 minutes, depending on how many oocytes she actually has. And you can load her back up on the trailer right away and head home. Or you can wait around. It takes about 15 to 20 minutes, and we'll know exactly how many oocytes will go into the lab to get fertilized the next morning. With the semen that you gave us that you wanted to mate that cow.

Zach Bartenschlager (01:00)
Yeah, I appreciate that, and thank you guys for the invitation, and we're pleased to join the podcast. Like Caleb said, Vytelle is a unique platform. It's an integrated technology platform built to accelerate genetic progress in cattle. And so, specifically, that what we're talking about here today is we have three parts to our platform. We're talking about the advanced side. The advanced side is our IVF portion of our company. And so here at Rankin Run Farms, we're powered by CB Genetics, is powered by Vytelle. And so, we actually collect donors and send those oocytes off to the lab and then create the embryos in the lab and provide those back for producers.

Caleb Sadler (01:51)
I'm going to go a little step further. Zach and Charlie, you speak into this too, because we're going to have a lot of listeners that really are, I guess you could say, uneducated on this side here today. So I'll let you all kind of, if they were first time listeners, just picking up the podcast and listening today, tell us a little bit about those embryos and what those are and things like that.

Charlie Atkins (02:12)
Okay, so the way it works with CB Genetics through Vytelle is everything kind of goes through us. We help all the clients manage the mating forms, the semen that needs to get to the lab for the matings. And there's no set up, no drugs in this process. We'll do a schedule for, like, just, say, today at Rankin Run Farms, I think we had 18 head today, and we scheduled it every 15 minutes a cow and you come we already got the mating form done. You either bring semen to the aspiration to the location, or we can help you get it sent to the lab beforehand. And after that, it's all pretty simple. You drop your cow off, we run her through the shoot. It takes anywhere between ten to 20 minutes, depending on how many oocytes she actually has. And you can load her back up on the trailer right away and head home. Or you can wait around. It takes about 15 to 20 minutes, and we'll know exactly how many oocytes will go into the lab to get fertilized the next morning. With the semen that you gave us that you wanted to mate that cow.

Caleb Sadler (03:14)
To average, Charlie, how many oocytes will you all get per donor or per cow?

Charlie Atkins (03:21)
Average is typically around 22 to 25 oocytes, and a lot of that's breed dependent. Some breeds give a lot more oocytes and embryos, and some are a little bit more of a struggle.

Caleb Sadler (03:33)
So, when you all collect the oocytes at that time and you all ship them back to the lab, how many of those oocytes you collect at the collection day will actually fertilize over into embryos?

Charlie Atkins (03:43)
Yeah, that's also breed and cow dependent, typically. So we can run matings three different ways. We can run it conventional IVF, which is you just take conventional semen fertilize your oocytes. You can have bulls or heifers, we don't know how many. Then you can use presorted semen, which is already sex semen that you bought, or you can take conventional semen, run it through what's called a reverse sort machine at the lab, and basically what that does, it splits the semen into basically female semen and bull semen, and they throw the bull semen away. If all you want to do is fertilize for females or vice versa, we get some of the show guys that want to produce steers. They'll sort it just for bulls because they want steers for their market. Typically on the conventional and sex semen, as long as the oocyte quality is there and the semen quality is good enough, it usually runs around 30% from oocyte to embryo production. So if you have 30 oocytes, you should expect between eight to twelve embryos. As long as everything works good, then on the reverse sword, it's closer to around 20% to 25% from oocyte to embryo production.

Caleb Sadler (04:52)
Got you. Perfect. So I'm going to back up a little bit. I know we've got into some of the details of what we're doing here today at the farm, but tell us a little bit about yourself, Charlie, and I'm going to let you introduce yourself as well. Okay?

Charlie Atkins (05:06)
Okay. So. Yes, my name is Charlie Atkins. I've been working with this IVF process for about going on ten years now. I manage Angus Cattle Ranch down in West Tennessee, and we used to conventional flush cows, probably 30 donors at a time every four weeks. And we got tired of all the shots breeding them three or four times, waiting a week to flush them, then sometimes they just still don't work. And you got all that time spent, all the money spent. So about ten years ago, we tried this IVF process and really never looked back. We got with Green River Embryo Transfer, which is our embryologist that we mainly use, and they helped us make the IVF process work better than most places across the country. And that's it. Then we had more people calling want to Aspirate and IVF cows with us that we just kept letting allow them to come. Allow them to come. And it grew into this business where we can help guys that don't have enough cows to get an embryologist at their place. So we basically manage the Aspiration days, help people manage their basically manage their donor programs.

Caleb Sadler (06:17)
Perfect. That's awesome. So I'm going to back up a little bit and I know Zach, you talked a little bit about what Vytelle is. How long have they been in business? I know one of their big things that we've probably already alluded to is the fact that there's no drugs involved. So, tell us a little bit about that and then we'll see if we got any questions for you there.

Zach Bartenschlager (06:38)
Yeah, so Vytelle is actually at mentioned that we're an integrated technology platform. And so with that we merged with what was formerly known as Growsafe and is now Vytelle since. And so when that happened, Vytelle came as integrated platform then. And so Vytelle is a fairly new company, but we've really taken kind of the market share by storm on the IVF side and continue to grow each and every year. And so Vytelle, like we mentioned, is that integrated platform where we can see how cattle perform on a feed intake basis. We really are wanting to measure residual feed intake in cattle through our Grow safe system, the synth system. And really the idea behind it was if we can get analytics on cattle that perform better and how they intake, then on the back end, hopefully we can replicate those animals at a really high rate of speed and get as much genetic progress out of them as possible.

Caleb Sadler (07:44)
Awesome. Now we're also joined we have a couple of other individuals, I guess you could say, behind the scenes, and we'll talk with John in just a second. The gentleman owns the facility here at Rankin Run Farms, but we're also joined with Ben Robin as well, who's running the tech for us today. But we're kind of going by a little bit of a script, I guess you could say. And I've got another question for you Charlie, in terms of once you collect these oocytes and they send them back to the lab, how long does it take in terms of timeline wise from the collection point to when you get an embryo back at your farm to put in that cow?

Charlie Atkins (08:23)
So, the way the Vytelle process works, we Aspirate today and on Monday at John's place at Rankin Run. They fertilize tomorrow morning at 24 hours after OPU. Then they grow them out and the following Tuesday. So day seven after fertilization, they'll freeze that morning, they'll freeze that afternoon, plus that Wednesday morning. They freeze three different times because there is no drugs, those embryos grow out slower. So I would say within nine, probably ten days from the aspiration we can get the embryos to you whether we ship them to you, you ship a tank to the lab or you just drive up to the lab and get them yourself.

Caleb Sadler (09:05)
Gotcha, Gotcha. Now, in terms of when these cows come in, do the farmers need to prepare or anybody that's flushing cows, do they need to do anything differently, I guess you could say, to prepare for a collection day?

Charlie Atkins (09:21)
No, sir. Basically like that. There is zero set up in this. We can do them a week after you breed the cow. A week before, day before, day after, up until 120 days bread. There's no drugs. There's nothing really you have to do other than just typically keeping her in good shape with mineral and everything like that.

Caleb Sadler (09:41)
Gotcha. Now, I know that we kind of got into some of the, I guess you could say, the benefits between the two. But tell us, and you talked about it whenever you introduce yourself, but go back through the advantages there of going through this process versus the traditional conventional flush that you have.

Charlie Atkins (10:03)
Well, the conventional flush, which is what used to be the most popular way to go, it's just you pump the calf full of FSH, so much drugs, it's like a four day shot process. Then you pull the cedar, give her a shot, she comes in heat, you have to breed her three or four times. Then you hope the semen works. Then the next week you flush her. And with breeding on that many times, you can cause a uterine infection, which basically there is no embryos. That infection basically ruins the whole flush. With this, we're kind of bypassing it to where we take Oocytes, which is in a conventional flush, the oocytes, you're making them there as well and we're taking them to the lab, we're fertilizing them. You can do five or six cows with one straw semen, where the other way you're going to use three or four straws of semen on one cow. So when you start adding up the cost and the labor and everything goes into it. Plus we can do them while they're bred. Where you can't conventional flush a cow, while she is bred, it's kind of a game changer. And a lot of people was noticing that because the ranch that I manage, we manage a lot of donors for us and other people. When them cows calf, the donors, two weeks later, we're already pulling oocytes and making embryos out of something that just calved.

Charlie Atkins (11:20)
And once they're 90 days post calving, we're getting them bred back. So our donors calf every year on time, yet we're still getting the same kind of production as if we would have left them open for two or three years. Conventional flushing,

Caleb Sadler (11:32)
I think, perfect sense.

Charlie Atkins (11:34)
What a lot of people are really liking because one, they can sell the cow a lot sooner if they want to flush her for a couple of years, sell her while she's young to kind of maximize the value. We see a lot of people doing that with IVF because you can do them while they're bread and so fast. Then with the process of Vytelle, if you don't make any embryos, you don't owe anything. Basically you're at your time and you're semen. That's it. Where conventional flushing, they still have to charge you for all those drugs and everything. So you're still out $500, semen and all.

Caleb Sadler (12:06)
Not even counting your time at that point in time because I know the conventional flush, you're running through the shoot at least three or four times, it's.

Charlie Atkins (12:14)
Worth whatever they think it is. It opens up a whole new, I guess, way of doing things and more time to do other stuff on the farm.

Caleb Sadler (12:23)
Now, I know you all flush every other Monday or once a month, I don't know exactly on that here at Rankin Run Farms, but in terms of other facilities that you all have across Kentucky or across the eastern states, where else are you all located at? And Zach, you may allude to some of that on your end as well.

Charlie Atkins (12:41)
So we have five locations including Rankin Run. We have one in Georgia. In Hartwood, Georgia. At DNW. Angus. We have two in Tennessee, one down at Crazy K Ranch in West Tennessee. One at Z Cattle Company in Clarksville, Tennessee. Then we also have one in East Texas. And all them run every two weeks.

Caleb Sadler (13:02)
Every two weeks. Okay.

Charlie Atkins (13:04)
We just started at Rankin Run. We're going to start doing donor housing there to make it easier on customers that don't want to have to travel every two weeks or might have a little bit longer of a drive. So like John there, he kind of talked about it. He wants to take care of people's, donors for them, just like they take care of them at home and basically yeah, they don't have to travel.

Caleb Sadler (13:23)
No. That's awesome. And I guess that was going to be my next question, too, and I think you answered it there. But basically you can turn around and flush a cow every two weeks, basically with this process, correct?

Charlie Atkins (13:35)
Yes. And we actually recommend that. And the only reason is after we aspirate a cow that afternoon, they're already getting ready to basically make a whole new Follicle weight where they're producing new oocytes. So whenever we get them on a schedule where we're doing these cows or heifers, every two weeks the embryo production goes up because the oocyte quality is so much better because all we're pulling is that new follicle wave. Where if you do them every three, four months or just time in between them, you're going to have oocytes of all kinds of different ages. And that's where you might have 40 oocytes, but on ten I'm good or something like that. So, yeah, if you can do them every two weeks and then get as many embroideries as you need and be done with them. It's easier on the cow, it's easier on you and it just makes the whole process a lot easier.

Caleb Sadler (14:21)
Now you just brought up one point that I want to bring up too, is the fact that you said that you all can do heifers. Tell us a little bit about that process. Is it very similar in terms of, I guess you could say, the number of oocytes you're collecting? Are those very consistent with virgin heifers or do you see a decrease in production on that side or what?

Charlie Atkins (14:44)
Yeah, we usually see a little bit of a decrease on that side per breed. And it's just because a lot of these virgin heifers, they're not quite for sure enough, but then every once in a while we do some that they do better than the cows and we've done them. We don't have a problem getting them bred. I think the only problem some people have over the years is they keep on doing, but they don't stop. That's where you can get scarring tissue, which our techs and Vytelle are some of the best I've worked with to where if they see anything like that, they let me know, they'll let the client know and basically, hey, you need to get this heifer bread, then she's fine. But if you keep doing her this guarantee, she's going to build up. So yeah, it's very safe to do heifers, especially with the techs at Vytelle.

Caleb Sadler (15:26)
Perfect, I got you. Now, one thing, and I don't know who needs to answer this in terms of Charlie or Zach or both of you if you want to at that point in time. I know we've talked a little bit about the differences between the two and talk a little bit about cost wise versus the Vytelle or the oocyte collection versus the conventional. So talk a little bit about your all cost versus what it would cost to do conventional side too.

Charlie Atkins (15:54)
Yes, we don't do conventional flushing much, hardly. I always don't do it at all anymore. But I think on average embryologists are charging between five and 600 and that's just for the flush where on the IVF part we charge $100 shoot fee and basically that goes to the facility. So just taking care of the facility, stuff like that. So there's a huge cost difference there. If you don't make anything in the IVF, you don't owe anything. We waive that fee where conventional flush, you still owe that because they still used all their material. They still all the drugs and everything. Then after that it's per embryo. Our price and scale is 195 for grade one embryo. Grade two embryos are 125 and we only do them by request. Most people, they only want grade ones and we have no problem with that. The freeze cost everything's included in that where the conventional flush, you have that huge upfront cost, then you have your semen. And a lot of bulls now are costing between 50 and $100 a straw. You have to breed them three or four times. Then most embryologists charge between 50 and 60 per embryo to freeze.

Charlie Atkins (17:03)
So don't take long to add that up to where this IVF process in the long run is actually quite a bit cheaper.

Caleb Sadler (17:10)
I was going to say it's been a long time since I've done a conventional flush on a cow. But just the numbers you're spitting off, it's going to save you money in the long run. Versus what it would to do conventional nowadays, especially with the options you're getting in terms of spinning that semen and being able to sort heifer or bull or whatnot at that point. In Terms of, One thing I will ask, between the grade ones and the grade twos, how much does your conception rate drop off between those grade ones and grade twos?

Charlie Atkins (17:44)
So what we see on the frozen is we see about a 15% difference on average. But what we also do, which we haven't hit on yet, we do a lot of fresh transfers through CB Genetics. We've actually done some for a few clients up there at Rankin Ridge than we do at all of our locations across the southeast where we use grade twos and fresh transfers. And we don't see hardly any difference. It's just something about freeze them.

Caleb Sadler (18:09)
Got you. So we're transitioning a little bit. We're joined here today too with John Rankin at Rankin Run Farms, and he is the one that's hosting us and is the one that hosts the facility for you all to be able to operate out of. John, I want to ask that you introduce yourself and tell us a little bit about yourself and the operation you run here.

John Rankin (18:30)
Sure.

John Rankin (18:31)
Thank you guys for coming again today. I'm John Rankin. I was born and raised here in Bourbon County and married to my wife, Kayla. We have a little girl named Ramsay. She's five and about a year and a half ago, we were fortunate enough to buy this property after leasing it for many years, and I was looking for a way to utilize this facility, reached out to these guys and it's been a great experience so far.

Caleb Sadler (19:01)
Perfect. Now, do you all I know you all run the facility here for them, which is, if you've never been here, is basically state of the art, I mean, the way this place is set up. But I know you all run some cattle yourself. So tell us a little bit about your production side and what you all specialize in there.

John Rankin (19:19)
Right.

John Rankin (19:19)
Yeah, we're just cow calf operation mainly, and that's really just cow calf right now and background calves for a little while, start some feeders, hopefully get into selling some replacement heifers down the road. Been fo rtunate enough to keep all my heifers for many years now. So down the road, hope to look into that.

Caleb Sadler (19:44)
Gotcha, now how do, and I guess all three of you all will be able to pitch in here. How are the facilities used the day that I guess you could say they collect here from your end, john, what are you responsible for that day? And then Charlie or Zach, I'll let you all speak from that end of it. Of what? Timeline, process, commitment to bring a cow or whatnot there too?

John Rankin (20:11)
Just maintaining the facilities, really on my end, making sure everything's running right and everything's in good shape.

Caleb Sadler (20:18)
Okay.

Charlie Atkins (20:21)
For our end, for CB, it almost makes it way too easy working with somebody like John because he has, like you said, the state of the art facilities to where we can run cows through there. It's a hydraulic chute, hydraulic alley, state of the art lab right beside it where you walk the oocytes right in there. That makes it pretty simple that these clients can come and feel comfortable and kind of enjoy the process. We have a TV that John mounted beside the chute that we hook up to the actual ultrasound to where whatever that tech is seeing as he's ultrasounding, you can watch your cow get aspirated. I think that's one of the cool things about it, because a lot of people haven't seen it and I've been doing it for ten years other than me staring at the screen that the tech is doing the small deal, I haven't seen it on TV very many times.

Caleb Sadler (21:06)
Now I'll agree with you there. I guess one of the first times you are out here, Ben Robin and I came out one day and looked at it and to see that Ben talk a little bit about seeing that side of it because it's pretty cool to see if you've never seen it.

Ben Robin (21:19)
Yeah, I mean, it's really cool to see the science behind it. Obviously what they're doing inside of the cow in real time, it's just something that you don't ever see, you don't ever think about, but you're seeing exactly what they're seeing. It's just really cool to actually experience that. But the way the facility is set up, you're right there, shoot side, you can see the whole process and just really cool. Something I'd never seen before.

Caleb Sadler (21:45)
Yeah, I will say too, when we were out here that day, you would picture it, you would think it would be something that would be like a very stare. And I'm sure from the tech side it is, but from our side, we were standing right beside the shoot. The tech was right there in front of us and we were seeing it up on the TV screen. So it's pretty cool to see on that end of it, but we'll circle back around a little bit. One other thing that Zach, we were talking about before was what Vytelle was and I guess you could say one thing that we've talked about is the three groups here that have come together to really make this thing work. So tell a little bit about that and kind of how that model is successful.

Zach Bartenschlager (22:28)
Yeah, absolutely. To make this all work, we do need to partner up. And when I say we, Vytelle needs to partner up with good partners. And we have established many good satellite partners across the country that you'll see, if you go to our web page, you can see all different partners that we work with. And Charlie is a very good partner of ours, as you would notice, where we have five satellites with him, CB Genetics. And so really, sometimes it becomes a little bit confusing for clients to maybe figure out exactly why is there three people that are maybe involved with one location. And so the way we've structured that is that Charlie, through CB Genetics, they are the ones that are facilitating the day in, day out opu events that are going to take place at the facility. And then Charlie has partnered with a lot of good locations that we rent from or whatever you want to call that there with John and Rankin Run Farm or different locations as well, so we can utilize some of the best locations within the area. We want to partner with good people and we want to make sure that we get in areas that we can have as much reach as possible as far as where the donor populations are at and just be accessible for those clients and customers that are out there.

Charlie Atkins (23:55)
The great thing about Vytelle is what they want to concentrate on is making the best embryos they can for producers. They don't want to own locations, they want to own cows. They don't want to own anything. They want to go through people like me and other satellite managers throughout the country to take care of the clients the best we can and basically just let Vytelle make the embryos the best they can. And with all that, the way it works, I mean, we're getting great conception rates. Our clients, they don't have to call Vytelle and talk to somebody they'd never met. They call either me or my wife who owns the business with me. And basically we take care of them pretty much daily. Semen, inventories, how many embryos they make, we do the invoicing. So if they have any concerns, they call us. The system, it just works out really good.

Caleb Sadler (24:46)
You said one thing there, too, that makes me go back and ask you another question, Charlie. But for instance, if you collected a cow, you sent it off and she didn't produce any embryos, do you all store that straw of semen or keep that on hand in case that they want to come back and collect that cow again?

Charlie Atkins (25:07)
Yes. So we always try to get people to send at least two units of each bull they want to use. So whenever we collect a cow and they fertilize those sites and she don't work, unfortunately, they've already used that straw semen fertilizing what she made. But any semen that you want to send to the lab, we can send it up there for you. We can give you the address. You can send it there. They keep it there at no charge. All the inventory goes through CB genetics. So all you got to do is call or shoot me a text and with Vytelle system, within about 30 seconds I can text you your whole inventory. But everything's easy to take care of. Yeah, it's pretty simple. If you need it, we can get it shipped to you. We can get it brought down to the next OPU at whatever location we're going to and you just pick it up there and save shipping costs and everything.

Caleb Sadler (25:57)
So on a collection day, when they collect oocytes here, where is that lab at that they're going to are they transported by vehicle or air or how far is it in terms of proximity?

Charlie Atkins (26:09)
Yes. So the lab we use for John's place right there in Paris is up in Columbus, Ohio. And Fabio, the tech that was there today, and Sam, the lab tech, basically they came down this morning from the lab, they brought all the equipment, everything. They're going to drive straight back to  the Lab with the oocytes and with whatever semen that clients sent. So that's another good thing I do like about Vytelle. We don't use Ups, we don't use FedEx, we don't like stuff getting lost just in case because this is all time sensitive, these oocytes and everything. So basically it's either courier to the lab or one of the text drives it straight to the lab.

Caleb Sadler (26:43)
Yeah, I understand that completely because when you start talking about time sensitive, there's nothing like having semen stuck on a Ups truck over Thanksgiving break and you can't get in to get it and it don't get delivered until the next week.

Charlie Atkins (26:58)
Semen, as long as they're in that tank and don't go dry, it's fine. These oocytes, they go bad. They need to be fertilized 24 hours after they get Aspirated each cow.

Caleb Sadler (27:09)
Got you. Well, John, do you want to add anything else from the facility side of things with I guess coming on now from a management standpoint in terms of housing the donors or anything there?

John Rankin (27:22)
I don't think so.

John Rankin (27:23)
These guys are great to work with.

Caleb Sadler (27:24)
Okay, good.

John Rankin (27:25)
It's easy going process.

Caleb Sadler (27:27)
Good. So I'm guessing those donors will be here for two weeks at that point in time. So they'll come and get flushed once and then two weeks later they get Aspirated again. Correct?

Charlie Atkins (27:37)
Yeah. So what a lot of our producers do at all of our locations that we have donor housing and it's just two places that have donor housing. The newest one is John's, is they might. Say, hey, I'm way too busy with my main job. I want to drop off these five donors. I want to aspirate them four or five times. I'm going to come pick them up. I might even drop off four or five new ones. When people do that, basically me and John are managing their donor program. John's taking care of the donors on a day to day basis, making sure they're taken care of, have minerals, don't get sick. And then we're on my side. We're helping with the matings, the mating forms, making the embryos. A lot of these guys got to pay managers a whole lot of money to do that. This way they can do it. They don't have to have a management still go through them. But me and John basically take care of their cow and their matings and embryos.

Caleb Sadler (28:25)
Good.

Caleb Sadler (27:27)
Good. So I'm guessing those donors will be here for two weeks at that point in time. So they'll come and get flushed once and then two weeks later they get Aspirated again. Correct?

Charlie Atkins (27:37)
Yeah. So what a lot of our producers do at all of our locations that we have donor housing and it's just two places that have donor housing. The newest one is John's, is they might. Say, hey, I'm way too busy with my main job. I want to drop off these five donors. I want to aspirate them four or five times. I'm going to come pick them up. I might even drop off four or five new ones. When people do that, basically me and John are managing their donor program. John's taking care of the donors on a day to day basis, making sure they're taken care of, have minerals, don't get sick. And then we're on my side. We're helping with the matings, the mating forms, making the embryos. A lot of these guys got to pay managers a whole lot of money to do that. This way they can do it. They don't have to have a management still go through them. But me and John basically take care of their cow and their matings and embryos.

Caleb Sadler (28:25)
od.

Ben Robin (28:27)
So Zach, we've thrown around some pretty highly technical terms. A lot of science goes into this process, but maybe give the listeners a little bit of insight into the IVF process and oocyte collection and what we're actually doing there in the shoot.

Zach Bartenschlager (28:41)
Yeah, for sure. So this whole process has a lot of acronyms involved in it. And so we start throwing these things out and just assume that people know or understand exactly what it is. But when we're talking about IVF, we're talking about in vitro fertilization. So we're talking about the process of harvesting oocytes from a cow, sometimes be referred to as eggs. Right. And we'll harvest those from the cow and then we'll actually take those to a lab. We'll grow in the lab into an embryo or develop into an embryo and then send back to a producer. And so the way our process works is that like Charlie had mentioned early before, there's no hormones, there's no set up on the front end. We're taking what's naturally there. In terms of a follicular wave, we're harvesting those oocytes. So we'll go in transvaginally and we'll have a needle that'll aspirate those follicles that are on top of the oocyte. It'll pull that out. I know Ben and Caleb had talked about how neat of a process that you can actually see on the screen there. We'll have a searcher that's here on site that actually goes through the dish and sees what oocytes are there, gets an official count to send off to the lab.

Zach Bartenschlager (29:57)
And then at the lab 24 hours later, charlie had talked about, we'll do fertilizations and then the lab will do series of checks throughout the week to make sure things are progressing correctly. And then we'll have a series of four freezes. If a producer chooses to have frozen embryos, we also have the option for fresh as well that the producer will then get back at the end of the embryo development.

Caleb Sadler (30:25)
In terms of fresh wise, how quick do those need to be transferred into the cow?

Charlie Atkins (30:30)
We do a lot of fresh transfers for clients so basically the way that works, just say we aspirated cows today at John's next Tuesday morning when they start freezing, if just say John's got some resets, he will split embryos in that Tuesday morning. We either set up a courier or he can go get them or send somebody to the lab to pick up what's called a straw incubator. And what the lab does that morning, instead of freezing, they look at those matings that we're doing fresh and they grade them for the last time, and they'll put them in straws in the straw incubator to where when they get to the farm, all the embryologists or whoever's transferring has to do is look at the paperwork. And this straw number one is this mating. And it's got the staging grade. It's already done. There's no microscope work. You put it in your gun, you go in there and you transfer it. Then you go to the next cow. It's just right on down the line. It's the most simplest way I've ever seen it done.

Caleb Sadler (31:25)
Got you.

Charlie Atkins (31:27)
Especially for the embryologist side, where they're typically, when they flush a cow, conventional flush, they're under the microscope for hours, sorting through them, looking at them, figuring out what's what. The lab has already done this. So basically all them guys got to do is palpate the resips and transfer embryos.

Charlie Atkins (31:41)
Everything else is already

Caleb Sadler (31:43)
So, it's a pretty quick process. In terms of turnaround time, you're looking a week to ten days at that point to get those things back on the farm. In terms of fresh transfer.

Charlie Atkins (31:52)
It'll be Right at eight days.

Caleb Sadler (31:53)
Eight days. Okay.

Caleb Sadler (31:54)
Got you.

Charlie Atkins (31:55)
Yes, sir.

Caleb Sadler (31:55)
So I know we talked about this a little bit, Charlie, and I'm going to let Zach talk a little bit more about it in terms of cost side and break that down truly as well. Maybe even touch a little bit from a commercial guy standpoint on that end of it, some of that side.

Zach Bartenschlager (32:13)
Yeah, for sure. I think that one of the things that really sets Vytelle apart and I think there's a lot of things that we can draw from, but is our outcome based pricing model. And Charlie had mentioned that is that it's refreshing to find a company that when you're trying to make embryos, you're just going to pay for the embryos that you make. And I think it's really important too, for producers to keep in the back of their mind that so oftentimes we get caught up in what the cost per embryo is and we just look at the dollar amount that maybe we get quoted, but we got to look at everything that's put into that. And so is that not only the FSH, if you're using a stimulation type of approach, is it the FSH that went into that? Is there a trip charge? What all that might go into that with maybe some of your conventional flushing or other methods as well? In our system, you are just literally paying for the embryo that you make at the end of the day. And I think that what's so refreshing is that if for some reason you have a low volume donor or she doesn't even make any embryos, heaven forbid that you don't end up owing any money or it's very little.

Zach Bartenschlager (33:21)
And it really kind of goes back to our principle with Vytelle, is that we want to be accessible for the producers. We want to be the most successful, reliable and predictable IVF company that's out on the market today. And I certainly think that we do that through the way that we're structured. From a cost perspective, people really think that Vytelle or an IVF service is geared towards seed stock producers or maybe the show ring or whatever you might have in terms of genetic progress, but really there's a lot of opportunities from a commercial producer's perspective as well.

Caleb Sadler (33:57)
So, John, from your end of things, what would be I know we've talked about it outside of this podcast, but talk a little bit about your perspective there and where you would see that Vytelle or this type of progress or process would benefit your operation for sure.

John Rankin (34:16)
And I'm sure it would all be from a cost standpoint. I feel like if you could go out to the field and pull and everybody that has any number of cows, whether it be 10, 20, 50, 200, and the commercial guys, if you could go out in the field and pull your best ten cows or five cows or 20 cows and replicate those, I feel like that's what these guys can do. It strikes me to maybe do that down the road. Of course I'm looking into that. But what makes me think of it, like you can go out west and see those ranches that have been breeding for 30 or 40 years. These guys, I feel like, could do that within just a few years.

Caleb Sadler (34:58)
Speeds the process up for sure. And if you're going to take ten head at that point in time, you probably want to take from a commercial standpoint, you want to make sure that you're factoring in your cows that are weaning your heaviest calf crops and are probably going to cost you less in terms of input wise with the way the things cost right now.

Ben Robin (35:15)
Yeah. It can benefit any size operation. It doesn't have to be large producer like. You can do this on a smaller scale. We talk about a lot of the data that goes into it. Maybe Zach, maybe you can mention some of that. But I think in the way that agriculture is moving, everything is data driven. Whether you are a large operation or small operation, the more efficient you can get, the more data points you have. I'm a data guy, I like data a lot, but the more efficient you can get and this is a process that just accelerates it you talked about accelerated genetic progress. That's what we can do with this type of product.

Zach Bartenschlager (36:00)
Yeah, we're a precision livestock company, right? So we are very much data driven. We talked about on the scent side, which many of you might know, formerly known as Growsafe, but on that side of things, we are constantly taking in data on how animals are performing. We're taking in pin weight measurements as they're eating and figuring out not only what average daily gain they have, but what are they doing with the resources that are in front of them. A lot of times we get caught up on thinking that a high average daily gain is a good thing. And that is good, right? But we want to make sure that they do more with less, right? And that's the name of the game here. And so we're constantly taking measurements on those livestock to see those that are just a little more efficient, a little more sustainable, that can make the world even a better place than what it already is. And then on the back end, we're keeping that data and metrics as well as we're on the advanced side and seeing how quickly we can replicate that in our system. We have metrics on all the donors that come through, and we can tell you from the first time that she was aspirated to this last time, and we can see how she's performed, what works, what doesn't.

Zach Bartenschlager (37:18)
It's really from a data perspective, we're very much driven that way.

Caleb Sadler (37:23)
And that could add into the commercial side. There obviously there's a cost, like John said there with all of that. But if you're able to select those ten cows and those calves are the calves that are putting the most average daily gain on, that's just money putting back in your pocket at that point.

Ben Robin (37:40)
I think about from the input side, I mean, we're in a world now where look at the input prices in agriculture. We've got inflation, we've got transportation issues. There's all kinds of different things that play into it. So really trying to be more efficient, like Zach said, with obviously a lower input cost, that's huge. And we're talking about it too, and I don't know if he's mentioned, but we're talking this beef and dairy. So it works kind of the same way on the dairy side too, but that's cool stuff.

Caleb Sadler (38:12)
I want to thank our listeners today for tuning in to another episode of Beyond Agriculture. Want to also thank our guests that we've got on today, Zach Bartenschlager with Vytelle, Charlie Atkins with CB Genetics, and John Rankin with Rankin Run Farm. So thank you guys for taking time out of your all schedule to join us today on Beyond Agriculture. And thanks again to our listeners and make sure you go out and like subscribe and share our podcast. This episode of Beyond Agriculture is brought to you by Central Kentucky AG Credit. Thanks for listening to the podcast, be sure to visit Agcreditonline.com Beyond Agriculture, access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

Join Caleb and Tom Zack as they introduce you to Patrick Higginbotham, our newly re-elected board member. Learn how Patrick got to know Ag Credit along with an inside look at what the board of directors do every month. 

View Transcript

[00:00:00.000] - Caleb Sadler

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of Ag and into the real life stories, conversations, and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello and welcome in to Beyond Agriculture. Caleb Sadler back with you. It's been a little bit since we've been in the studio recording, but we're joined today with Tom Zack Evans. We're in the Lexington office, and today we have a guest, our board of directors member, Patrick Higgenbotham. So welcome on, Patrick. How are you doing?

 

[00:00:42.420] - Patrick Higginbotham

I'm doing well. I'm glad to be here with you all today.

 

[00:00:44.930] - Caleb Sadler

Good. So now you were recently just reelected to the board of directors with Central Kentucky Ag Credit at the annual meeting that we had there at the end of February, first part of March. So tell us a little bit about yourself and give us some background with your family, and then we can kind of maybe get into the nuts and bolts of what you do as a director.

 

[00:01:05.250] - Patrick Higginbotham

Okay, so like Caleb said, Patrick Higginbotham wife Erica have three kids, twins Elliot and Aubrey, who are 15. And then I've got a 13 year old daughter, Evelyn. We both grew up in Agriculture. I grew up on a beef cattle farm. My dad worked for the Department of Agriculture, so he kind of operated like I did. He worked so he could afford to farm, so to speak. But his job was with NRCS, so he was always involved. Everything he did was involved in Agriculture. So by default, everything I did was kind of related to Agriculture. So I grew up on a beef cattle farm. My wife actually grew up on a dairy and her family crop, and they still crop several acres. Her dad has since he sold his dairy cows, but he still crops several acres. Then,  I guess it's just always been that we've been around the farm and that's what we always wanted to do. So I went to school. I'm a pharmacist at the VA here in town. And then my wife is a dentist. She works with Beaumont Family Dentistry here in Lexington. And I say she works one day a week, and that gets me in trouble.

 

[00:02:17.510] - Patrick Higginbotham

She gets paid one day a week because she practices dentistry one day a week. She's very involved in what we do at the farm, and she homeschools our kids. So she works every day. She just gets paid for one of those days. So that's kind of who we are and our kind of day to day thing that we have going on.

 

[00:02:33.190] - Caleb Sadler

Got you. Now I'm going to give a background because I know you alluded to this before we started recording, but you've been out to the horse park today with the Kentucky Farm Bureau. I know you play a big role in that as well.

 

[00:02:46.470] - Patrick Higginbotham

I do. I got involved. It's kind of like everything else for I guess, farm kids, you just kind of gravitate toward other people that have like interests. And I actually had a neighbor, Bob James, who was very involved and has been basically since the beginning. And what that auction is, its a scholarship fundraiser. Very simply put, Fayette County Farm Bureau doesn't keep any of that money. And so we offer scholarships and it's usually $40,000 or $50,000 worth of money that Fayette County kids get. So they approached me about it several years Ago because, like I said, Mr. James is my neighbor and it's like, yeah, why wouldn't I help with this? So it's a consignment sale. It's all volunteer. We enjoy it. And I enjoy it mostly because it's just for good cause. There's not really anything bad about it. So I've helped with that for several years. I couldn't tell you how long, but it's been several years that I was.

 

[00:03:40.010] - Caleb Sadler

Going to say when I was back in Lexington, I know you were still there working as well. And that's been several years Ago.

 

[00:03:45.030] - Patrick Higginbotham

It's probably been eight or nine years because it was a few years after we bought the farm. We bought the farm in '08. So there was a few years that I was trying to get to know people and that's kind of how that happened.

 

[00:03:57.640] - Caleb Sadler

So now on the farm that you all have here in Fayette County, you all do boarding and do you all do some custom hay work?

 

[00:04:03.520] - Patrick Higginbotham

Yeah, we do a little bit of hay work. So we actually bought what was the Manley Farm. Some people in Lexington might still remember that name. It was a pretty significant family here in Fayette County, and they were general Ag for a long time. And then one of the brothers and his wife started boarding horses and we bought that. That was, like I said, in 2008. And so we board horses. We have 35 horses on the farm. And then we square bale, several bales of hay and sell it off the farm, sell it to the borders and then sell it off the farm as well. Just whatever we whatever we have in excess of what we need ourselves, we sell off the farm.

 

[00:04:39.220] - Caleb Sadler

That works well, though, to be able to put the hay up on the farm and then sell back to the borders. Gives you a market to get rid of it as well, too.

 

[00:04:45.680] - Patrick Higginbotham

It does, and it helps. I mean, one of the things that always that we talk about is everybody that has a horse there sees it from start to finish because they can see the field it comes out of. They can see it when we cut it. They know what the weather is like when it gets handled. So as far as, like, full disclosure hay, it's right there. And I'm not saying that anybody else doesn't do that, but it's always good because we've been fortunate, we've been able to put up good hay. And then there's just really not that much question about it. So it works really good because they literally see it from start to finish every time we cut. So that works really well, too. So there's no speculation about what might have happened with your hay. Yeah.

 

[00:05:25.430] - Tom Zack Evans

What kind of horses do you have on the farm?

 

[00:05:27.570] - Patrick Higginbotham

There's a mix of everything. Because we're in Central Kentucky, there's always a lot of Thoroughbreds out there we don't have in training race horses. Most everything we have is second career. So Thoroughbreds that don't run fast in a circle are typically not worth a whole lot of money.

 

[00:05:44.640] - Caleb Sadler

That's true.

 

[00:05:45.230] - Patrick Higginbotham

But they can be worth a fair amount of money as a hunter jumper or as a show jumper, as an event horse. So I would say 80% of what's on the farm right now, I'd have to think and do some math, but I would say 80% of them are retrained thoroughbreds. Second career Thoroughbreds. We've got two or three Quarter Horses. We've got an Arabian, we've had some draft breeds that people ride. So it's kind of we have jumping facilities and we have some event facilities on the farm. But for most part, most of the people, they have horses because they enjoy horses and they can ride as a pleasure thing and pleasure for everybody's a little bit different. So some of them ride in a ring, some of them go back in a hay field and ride around. It just depends. But mostly Thoroughbreds with a balance of Quarter horse, Arabian. We've had a couple of Tennessee walking horses, just a variety. Mostly Thoroughbreds, though.

 

[00:06:38.910] - Tom Zack Evans

You mentioned square belt hay production.

 

[00:06:41.000] - Patrick Higginbotham

Of course.

 

[00:06:41.310] - Tom Zack Evans

That's what my family and I do over in Harrison County. Have you all gotten mechanized with the Accumulator bale wAgon or anything?

 

[00:06:49.890] - Patrick Higginbotham

Probably. Five or six years Ago I bought a Kuhn, which is now Nordan Accumulator. We went through several options and it just came down to I'd always had pretty good luck getting labor. And quite frankly, there's usually a lot of young guys from church. And then it just got to where what I run into with farm labor more than anything is there's usually some young guys and a lot of parents who are like, get my boys out there and get them to work.

 

[00:07:18.250] - Caleb Sadler

Get them working great.

 

[00:07:19.340] - Patrick Higginbotham

The problem is, and this is not a criticism, but the problem is and I'm sure you all run into it, too the farm doesn't stop at 4:30, especially in the hay field. We're just getting goine. That's prime time. And so I was losing all my help at 05:00. And it was legitimate stuff. I mean, the kids had baseball or they had church or they had something else significant to do, but we still had a lot of hay laying out there, and so I'm laying awake at night because hay is still out there and it's supposed to rain tomorrow. So I was just like, dad and I were talking to my wife and we were just like, we got to make this where we can do it primarily. So got an accumulator and grapple. I had a skid steer so I didn't have to deal with that and the barn we were putting it in was already set up for that because when I built it, I kind of built it envisioning it. Yeah. So that we could mechanize that part of it. So that's how we put everything up. So as it's been lately, my dad bales Elliot, my son, rakes and either pulls wAgons or my daughter, one of my two daughters do and then I load and unload it.

 

[00:08:23.590] - Patrick Higginbotham

So it's pretty much an in house deal now, which is nice because at least for the next few years I've got a significant level of control over my labor. My kids are getting older and they're busy, so that's not always going to be the case. But for now,

 

[00:08:40.020] - Tom Zack Evans

That's what my daughter, she's going to be twelve this year, and I'm like, oh my gosh, I'm going to teach her how to she can run the skid steer, but she really hasn't learned to grapple hay yet with the skid steer or stack it. So I'm really looking forward to this summer teaching her that so I have some help for future.

 

[00:08:57.820] - Patrick Higginbotham

Well I know everybody in this room, all of us had to start somewhere and I mean my dad was great because he turned me loose with a lot of stuff at a pretty young Age but I was never out of sight. Now obviously I could have got, there's all kinds of arguments for how young a kid should be. I mean, I think, like in my house, some of my kids are more careful and understand how the mechanics of a piece of equipment work better than others. And so I can trust them a little bit more. And you don't have to tell every detail quite as much, but they're never going to learn if they never do it. And doing that means they're going to mess something up at some point because, I mean, I've bent and broke stuff that I wish I didn't, but I did. And dad, we fixed it and we went on and he has told me before you get experience the moment just after you needed it, sometimes that's just after you've broken something. Exactly. And I'll be honest with you. This isn't to sound romantic or anything. I don't get that sentimental about stuff.

 

[00:10:02.510] - Patrick Higginbotham

But when you're in the hay field and it's your dad and your son, your daughters, your wife, on and off, it's like, this is good. This is a good thing that we're all here together. Nobody's fighting, everybody's working. That's good I think. And that's one of the best things about Agriculture probably.

 

[00:10:18.090] - Tom Zack Evans

Oh yeah. And that's a huge portion of our borrower base and our customers at Ag Credit are what we refer to as lifestyle, which I put myself in that category. We're not going to get rich off of it. We hope to be somewhat profitable, but it's a lifestyle that we enjoy.

 

[00:10:35.580] - Patrick Higginbotham

Absolutely.

 

[00:10:35.920] - Tom Zack Evans

It's how we want to raise our family. I don't want to live in town. I want to be in the country. I want to try to make a little profit off the land if I can, and try to teach my kids responsibility and work ethic. And I just feel like it's a good way to do that.

 

[00:10:50.450] - Caleb Sadler

Yeah, work ethic, I think, is the big one, because that's something that you learn on being on a farm. You learn how to do a task and get it done, and that's something that's really good.

 

[00:11:01.190] - Patrick Higginbotham

Well, that's what we talked about, because the funny part of the story with us boarding horses is, like I said, Erica grew up on a dairy. I grew up on a cattle farm. And we found this place. She's like the first comment to her or to me when we're with the Realtor is like, she leans over in my ear and she's like, we don't know anything about boarding horses. And I was like, well, we can learn. Of course I wanted a farm. But one of my points was we both wanted our kids on a farm for the reasons that you all just said. And I'm thinking I'm thinking back about raising baby calves like bottle calves. It wasn't hard, but you had to do it every single day. And so I told Erica, I was like, this has built in the very thing that you want the most for your kids. And it's Friday night and they're wanting to go to a movie, and they're like, dad, do you care if I got a movie with so and so? And I'm like, did you feed? Because they gotta be. And and it's even more so in our case, at least in my opinion, because they belong to somebody else.

 

[00:12:00.390] - Tom Zack Evans

They cannot be neglected.

 

[00:12:01.680] - Patrick Higginbotham

So you can't just say, well, I'll feed in the morning, or I'll do it when I get home, because those people expect us to, as well they should, because they're paying us. So that's the other thing about it, is it's just a built in responsibility that they have. And I will say, not that there's never days where they're like, I really don't want to go to the barn, but I would say 99 days out of 100, they love it and they're engAged and they want to do it. And to what you talked about, I think, Tom Zack, about living in town, I cannot tell you how many times we will drive because most of our friends live in neighborhood. I have no disrespect for a neighborhood, but we'll drive out, and I don't think it's with any pretentiousness or anything, but one of my three kids will be like, mom, dad, thank you that we don't have to live in a neighborhood like this, and we got space to live and all that. So then I'm like, okay, good, we made the right decision.

 

[00:12:50.030] - Caleb Sadler

Yeah, I can relate to that right now. So I grew up on a farm and lived on a farm my entire life. And then when Morgan and I got married, we moved into our house in town. Well, we drive 30 minutes back one direction to the farm and 30 minutes back home, and I can tell you, it gets pretty old sometimes driving back and forth. So it does. There's something about being on a farm that's very peaceful. There's no doubt.

 

[00:13:12.760] - Patrick Higginbotham

Yeah, I Agree. I don't have anything.

 

[00:13:15.630] - Tom Zack Evans

We've seen a big movement in the last three years, really since 2020. And you could attribute some of it to COVID, whatever, but at Ag Credit, we've seen a lot of out of state buyers come in here that are from some of these larger populations, and then they just want space. They don't care if it's flat land, if it's hilly land, horse farm, cattle farm, what. They just want space. They want land. And like I said, we've seen a big transition in the last few years.

 

[00:13:46.660] - Caleb Sadler

I would Agree with that. So as we move on, kind of talking a little bit about the tasks that we've got in front of us, I guess you could say, tell us about your story of how you became involved with Ag Credit and how, I guess you could say your relationship with Ag Credit started.

 

[00:14:05.390] - Patrick Higginbotham

I tell people a lot, and I have for the last several years, that I really only have one. My life is not that exciting. I only really have one story, and I'm lucky. Erica and I dated in high school. We got married when we were in professional school. I have a fantastic family. And what I talked about wanting to get back to the farm when we got finished with or when we were nearing the end of school, we got pretty involved in a campus ministry at UK. Felt like God wanted us to stay in Lexington. Well, all I ever wanted to do was farm with my dad in Columbia, Kentucky, where I grew up. If you to ask me from 12 to 20, it would have been an unequivocal, this is what I want to do, period. End of story. Didn't want to stay in Lexington. Didn't like Lexington was a big city. I didn't want any part of it. Well, then you feel like God's saying, do something, and you're like, well, I can't really argue with that. So we lived in a neighborhood for a couple of years. We stayed in Lexington. We committed to staying in Lexington.

 

[00:15:06.770] - Patrick Higginbotham

And then I would look for real estate periodically and kind of get down in the dumps about it because I was like, I'm never going to be able to afford this. And we finally found a place that had this boarding income on it that seemed like might be something that could work, that could help offset what the land value was along with our salaries. I have an uncle who was a Vice President of a bank at home and he was for my first phone call because he's the only person I knew really. And he had given us a loan on the house. I called him and I said, Ronald, this is the situation. This is how much they're asking. This is what I make. This is what Erica is making. Can we do this? And he called me back that afternoon. He's like, yeah, you can do it. The problem is I can only lock your rate for three years. I was like, there's no and he's like, I wouldn't advise it he's like, you need to talk to some other people because if it goes prime and it does what it's done this year and I'd have been two years in, we would have lost the place because I couldn't have paid what that payment would have gone to.

 

[00:16:08.650] - Patrick Higginbotham

And so I talked to my father-in-law, talked to one of the guys at another bank at home who he had dealt with a long time, same deal. And I talked to him. I talked to that fellow basically to say am I crazy for even thinking about this? He's like, no, you absolutely should do it. You need to talk to an Ag Lender. So this is all happening fast. This is like a 24-hour period that all these conversations are happening. Well, John Peek in the Stanford office, John and I are college roommates, had been friends for a long time. John is still one of my closest dearest friends. And I called John and I've told this story at the annual meeting. But John is super chill, super laid back kind of guy. And you would expect when I called him to say something like, yeah, let me take a look at it. I'll see what I can come up with. I'll call you back in a little bit. John ended the conversation with and he probably could tell because he knew me well enough that I was kind of amped up about the whole thing.

 

[00:16:56.610] - Patrick Higginbotham

And he was like, don't talk to anybody else until you hear back from me. Just don't do it. So I paced around our living room for 2 hours and he finally called me back and he's like, this is what I can do. We can do a 20 year lock this much. And I'm like, yeah, but that rate. And he's like, you can't afford to not do my rate. Which is not like him either. To say at that firm. It was the most no brainer decision we've ever made. It was anxiety provoking because it was so much money to a 30-year-old kid. I thought I was myself as still a kid. But that's where it started with Ag Credit and what I would say about Ag Credit that I've learned since then because John and I were friends. So it's like you feel like you got an inside, you know I can call John this afternoon if I want to because we're buddies. What I came to learn in the process, when I would stop in the office down there, when I would stop in the Lexington office, is that you guys are doing that with everybody, if you're best friends or if you're just loan officer.

 

[00:17:54.490] - Patrick Higginbotham

So then I was like, okay, this outfit is different. They really want to take care of everybody. Where it came to pass at one point was when you all were doing PPPs last year. I called John and said, what's going on here? And he's like, you're eligible. You need to do it. You were at the bottom of my list to call. And the reason was and I was glad I was, because he knew that he could take care of mine, but he wanted to get everybody else's before he got there because he knew we could deal with mine on the back end. So those kind of things like that. And I know I mean, I've talked to both of you about stuff like this. You all just take care of people. And I think this outfit is successful, and it's helped Agriculture in Central Kentucky a lot just because, one, you all you're good at what you do. I think you care about the customers that you take care of. But I think the other thing that you've both already talked about is that you're all involved in most of our staff is involved in some level with Agriculture, and I just think that's unique, because if you just stepped into a local bank here, no disrespect to them, but the things that you all have both talked about already, Agriculture is just different.

 

[00:19:07.080] - Caleb Sadler

You just don't get the vibe that you get here.

 

[00:19:09.160] - Patrick Higginbotham

Well, and are just so many variables that you all know that are out there that unless you do it every day, you don't know. My dad, like I said, he worked for NRCS, and he always would tell people and say to me, I don't think I could ever be as good at my job as I need to be unless I farmed. Now, he loved to farm, but he almost felt a responsibility to as part of his job, if that makes sense. And I feel like you all are that way, too. It's just kind of all of who you are, but it makes you good at what you do.

 

[00:19:36.220] - Caleb Sadler

It goes back to what we really pride ourselves on, too, at Central Kentucky Ag Credit, and that's being the relationship lender that we are. And we go back. I mean, we try to know the ins and outs of everybody's operation.

 

[00:19:47.430] - Tom Zack Evans

It's not just one deal, and we're done. We're not just going to make you the land loan and then we're done with you. We're here for all your needs, those farm improvement loans, livestock, equipment. And now after eleven years, I've got people's, kids coming now.

 

[00:20:05.720] - Patrick Higginbotham

Sure. And where we've helped, doesn't that make you feel young?

 

[00:20:08.400] - Tom Zack Evans

Oh, gosh. And then where we've helped with the high schoolers, going in the classroom for the last ten plus years, helping with high schoolers. We've seen them come to us now for loan.

 

[00:20:22.550] - Caleb Sadler

Well, and really, everybody that's here at Ag Credit, we all give back to the community, whether that's regardless of being a Board of Director or down to the staff side, I mean, we all really pride ourselves too, on being involved in the community that we serve.

 

[00:20:36.890] - Patrick Higginbotham

Yeah, I think I appreciate that because it's not just lip service. Those same conversations come up in the board room, not in a particular like, well, we need to make sure that we hold on to relationships. It's just this is who we are, so we have to maintain that culture. It comes in more when you're hiring people because you want to make sure they get it and they're the right fit for the customer base we have and what the association's values are, because we could go hire the next hotshot kid, that's really good, but if they don't fit here, they don't fit and they're not successful and would probably be frustrated themselves, quite frankly.

 

[00:21:14.490] - Caleb Sadler

So going back so you currently serve on the board of directors, and you just got reelected to a new firm. So how long have you served on the board? And tell us a little bit about the roles that you do as a board member.

 

[00:21:27.870] - Patrick Higginbotham

I'm starting my second term, so I've served for four. I have run twice. I ran probably six or seven years ago against Jim Rankin. Quite frankly, I'm glad I didn't beat him because, well, he's a fantastic board member and so I'm glad I didn't beat him. But there was an open seat. A couple of years later, Mr. May stepped out of his seat and so there was an open seat, and I was fortunate enough to get that and then was fortunate enough to stay on here recently. So four years, and then starting my second four year term, and I guess the number one, and it just came to pass in the last year, the number one responsibility of the board is to hire the CEO and to, I guess, manage the CEO, which is obviously Jonathan Noe. So we had a pretty challenging task ahead of us over the last couple of years because Jim Caldwell, Mr. Caldwell had given us kind of a notice. He gave us a long term notice on that he was going to retire. So then we went through the process of hiring so long and short of it that's our number one bare bones responsibility.

 

[00:22:39.490] - Patrick Higginbotham

Beyond that, a lot of it is making sure that we are operating in accordance with all of Farm Credit Administration national kind of higher level their rules, banking rules, making sure all of that audit stuff and the things that you all are doing every day is kind of up to snuff with regard to what's required of a financial organization. So we see all audit results, we approve those. One thing I tell people all the time, we don't approve loans, we don't even approve big loans. You all do that. We don't need to do that. We see them on the back end, but we don't do anything like that. But I would say the main thing is making sure that we are being run in a wise, responsible way because we are a co-op. So we're responsible to the rest of the membership to make sure that we're secure financially. Now you all are doing the nuts and bolts of that. We just kind of see a 30,000-foot view of it, but then we have to make sure all the regulatory stuff is okay. So there's a lot of kind of tedious details that we have to deal with.

 

[00:23:49.210] - Patrick Higginbotham

It's been really good because I think all of us, none of us that are elected are financial professionals. So it forces you to do a lot of work outside of class, basically, so that you know what you're doing, so that you are doing the thing that you're responsible for. But I would say those are the biggest things that we do. And then there were things like this building that we're sitting in, we were responsible for buying it. So there's things like that that come up that you don't really think about until UK approaches you to buy your other location.

 

[00:24:23.370] - Caleb Sadler

So I will say some of the listeners probably are not real familiar with Central Kentucky Ag Credit. And for those listeners, we are a cooperative, we are member-owned. But what I would ask though, is how many board of directors are there and how many are elected positions?

 

[00:24:41.040] - Patrick Higginbotham

So five are elected and that's elected by stockholders. So anybody that has a loan that has stock in Central Kentucky Ag Credit gets to vote at our annual meeting. They have that option. And then we have two outside directors, which the easiest way to understand it is basically an appointed position. And one of those has to be a financial expert. So Mary Lynn Hinkle, who's a CPA who has a career in finance for different organizations in this area, she's one. And then our other outside director, Dan Grigson, has retired from the extension service at the UK. So he has kind of that expertise that he can give. So it's our board here. Different associations across the country have different numbers of board members, usually depending on how big they are.

 

[00:25:31.160] - Caleb Sadler

I was going to say it probably correlates to the size of the association.

 

[00:25:33.940] - Patrick Higginbotham

It's financial size and then geographic size too, how spread out they are. We're fortunate in that regard because we're all pretty close together.

 

[00:25:41.420] - Caleb Sadler

Yeah, we service 17 counties.

 

[00:25:43.030] - Patrick Higginbotham

Yeah, like there's an association that in our district, in the Ag First District that is part of part of them is in East Tennessee and part of it is in West Tennessee and West Kentucky. And there's nothing of their association between there. So you got to have some board members that represent those eastern, those eastern areas. But all of those things go into how many board members there are. That's what we have. And then we all set on there's some committees that are required. There's an audit committee, there's an HR committee, and the way our board is set up is that we are on all of those committees too. So it really works well because we're all involved in all of those decisions.

 

[00:26:22.830] - Caleb Sadler

You know, what's going on at that point in time. Nobody's left out decision or anything like that. Well, Patrick, is there really anything else you want to tell us about that's kind of unique about the board and your role there?

 

[00:26:40.110] - Patrick Higginbotham

I don't know if it's unique. I would say I've been involved in a fair number of civic, private, nonprofit kind of deals. And I don't say that with any pretense. It's just wanting to be able to serve and give my time to stuff. And I'm not saying this because I'm on it. This is probably one of it's hands down the best board I've ever sat on and the most functional. And I think it's just because of the people that are on it and what you all talked about earlier, the culture of the organization, because we're all stockholders that gets passed into the board even before you're on the board. So that culture kind of passes back and forth. It's kind of an osmotic kind of thing. So it's a really good board. I think I can say without any kind of speculation sitting in those boardroom meetings, I can tell you that nobody in there is angling for something for themselves, for themselves or for their family, or to try to make it better. All of those conversations are one how do we serve the people that we're serving in these counties the best? And then how do we give you all the tools that you need to be able to serve them the best?

 

[00:27:57.580] - Patrick Higginbotham

Now, I wouldn't argue that we're always perfect at that, but I would argue that the motivation is that we may miss a detail for some reason in that direction, but I would argue with anybody that there's nobody in that room that is not looking out for the membership and for the big picture. And it's really good because there's a varied background of all those. You got Lee, who runs an Agribusiness  feed store, farm supply store. You got Joe Meyer, who's big time registered Angus cattle, Mr. Rankin, they've got cattle and crop and a whole bunch of stuff going on in Paris. And Dan was Extension. Mary Lynn doesn't really have an Ag background, but she has a finance background but I can tell you she's embraced who Ag Credit is to a significant, real significant degree. And then you got Mr. Lyons, our chairman, who has been on Southern States's board. He's given his adult life to being part of Agriculture. He's got a stocker operation, they crop. So he's involved in everything on all levels. And I will tell you, he in particular, he studies finance and he studies the details in the legislation.

 

[00:29:20.430] - Patrick Higginbotham

And when we get into a board meeting, he knows everything that's going on before we ever start. So he's another very valuable asset, I think to our association, just because he is so well versed in so many things that are going on.

 

[00:29:33.420] - Caleb Sadler

I'll also add to that too, he just actually served a term with our Ag First Funding Bank in Columbia, South Carolina. So he actually represented Central Kentucky Ag Credit on that board and not just Ag Credit, but represented the farmers of Central Kentucky on that board as well in Columbia.

 

[00:29:51.270] - Patrick Higginbotham

So there's all this variety of and you got me who's kind of quasi in the equine world in Lexington, the off farm income and then the off farm income sector. So there's just a big variety of people and it kind of works well together because it seems like everybody's got a little bit to say about whatever topic comes up. Because if there's cattle issues, we got people who can deal with that. If there's equine issues, we can deal with that. If there's just general finance issues, we can deal with that. And so it's nice and Dan too, he's interested in all the legislative things, which a lot of people aren't, but it's necessary because that affects everything we do, whether it's at Frankfort or Washington or local in local governments, because all of those things affect what we're able to do and how we're able to do it. So you have a fellow like that who's interested in those topics and talking to legislators and talking to local officials and that's important. So it all goes back to what.

 

[00:30:47.010] - Caleb Sadler

You said and we live it every day as a staff and all the way up to the board. It's all about the membership and being there for them and being the relationship lender with them. Well Patrick, as we wrap up today, we really appreciate you coming on and being part of the podcast. We really hope that we get to have you back on at some point in time and I hope your next four year term with the association in terms of the Board of Directors goes really smoothly as well.

 

[00:31:12.790] - Patrick Higginbotham

Yeah, me too.

 

[00:31:14.230] - Caleb Sadler

As we wrap up, we want to thank our listeners for joining us today and be sure to go out and like subscribe and share our podcast and we thank you for tuning in to Beyond Agriculture.

 

[00:31:26.810] - Speaker 4

This episode of Beyond Agriculture is brought to you by Central Kentucky Ag Credit. Thanks for listening to the podcast, be sure to visit BeyondAgriculture.com, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

 

Join Patrick, SaraVard and John as they learn about farm safety from Dale Dobson with the KDA. If you have not received a coin from Dale, you need to listen to this episode!

Kentucky Department of Ag: http://www.kyagr.com/
Rasing Hope: https://www.raisinghopeky.com/
Ag Credit: https://www.agcreditonline.com/

Join Caleb, Tom Zack, and Shelby as they talk with John Allen Mason from Meade Equipment and Jay Rankin of Rankin farms about markets, equipment, harvest, and the mighty Mississippi.

View Transcript

Caleb (00:01)
Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations and events taking place in our community. Who we are and what we do is beyond agriculture. Hello. Welcome into Beyond Agriculture. Caleb Sadler back in the Paris office with us here today. We're also joined with Loan Officer Tom Zack Evans, Shelby Wade, and our special guest today with us in the studio here is John Allen Mason from over at Meade Tractor. John Allen, how are you doing today?

John Allen Mason (00:41)
Doing good.

Caleb (00:42)
Good. So we're kind of going to open it up a little bit. Tom Zack Evans kind of heads up the Farm Credit Express program for Central Kentucky Ag Credit, and I'm going to let him take over and kind of lead this episode or this segment of today's podcast.

Tom Zack Evans (00:57)
Yes, like I said, we have John Allen Mason from Meade Tractor here in Paris, Kentucky, with us today, and we're happy he could come and join us. John Allen, can you tell the listeners a little bit about yourself and your family?

John Allen Mason (01:10)
So, yeah, I grew up right here. Born and raised in Bourbon County, just right out the road. Born, raised on a cattle farm. Raised pigs, shows pigs all my life. Went to school at UK, got my Masters from Purdue in Swine Genetics. Come back here. I worked on a horse farm for a little bit. Worked on a cattle farm, ended up taking a job as a Salesman at that time, Bevin's Motors, a John Deere dealer. Bevins got bought out, Meade bought them out September of 17. Been there, been over there since then. Yes. So just a salesman. Salesman over at Meade Tractor, selling John Deere tractors, all kinds of aftermarket equipment. Hay, equipment, good deal.

Caleb (01:50)
I will say I'm going to pitch in here because we have two hog producers on today, which is kind of a rarity. I mean, you don't see any of those in our community.

Shelby Wade (01:59)
So, yeah, definitely unique. And that's actually how I met John. I don't know, we're not going to say how many years ago, but it was a long time. I bought some of my show pigs off of him, so it really comes full circle.

Tom Zack Evans (02:09)
We bought a pig from a baby pig from John Allen and his family. John and I were talking the other day, I don't know how many, maybe ten years ago, and it was actually for a petting zoo we had. And that pig is named Bacon, and he's got the best life. He's a barrel pig. I think the last time we weighed him, he was eight or 900 lbs. And lives the life of a king.

Caleb (02:41)
But I was going to say I've seen Bacon myself.

Tom Zack Evans (02:44)
What breed of pig was that?

John Allen Mason (02:46)
Just the crossbred. It was a Hampshire Yorkshire blue butt is what they call them. But yeah, just a leftover show pig that I had.

Caleb (02:52)
Now, are you still raising hogs?

John Allen Mason (02:55)
Not so much to raise them. My girls still show pigs. I don't have the time to raise pigs anymore. It's tough with all that going on, having kids.

Tom Zack Evans (03:03)
And what ages are your girls?

John Allen Mason (03:05)
They're 11 and 13. They go to school in Paris. They're in all kinds of sports and still want to do the show pigs. So I'll keep doing the show pig thing with them until they don't want to anymore.

Caleb (03:16)
I don't blame you there.

Tom Zack Evans (03:17)
Well, jumping into Meade Tractor here, John, I guess tell the listeners a little bit about what all you all have to sell at Meade Tractor in Paris.

John Allen Mason (03:27)
So we're primarily in the John Deere dealer. That's our bread and butter. We deal with John Deere tractors, lawn mowers. As far as the aftermarket, we've got Kuhn Krone, hay equipment, we sell Frontier pieces, Woods rotary cutters, sell some bush hogs, but mainly as John Deere and all the farm implements.

Tom Zack Evans (03:47)
Yeah. So hay equipment, obviously this is a big cattle area, so also grain equipment.

John Allen Mason (03:54)
Can you yeah, we can get some grain equipment. We're not typically the large Ag producer, so we don't have the combines sitting on the lots, but we have the availability of getting some of that type of equipment.

Tom Zack Evans (04:05)
Yeah. So what is the availability look like? I know during COVID the last two years it's been really hard to get really any equipment in and especially parts. How is that supply chain looking like now?

John Allen Mason (04:21)
So as of now, the tractors are probably the best I've seen them in three or four years. Like we've got more tractors on our lot than I know I've seen. I know in three or four years implements are still hard to get, but in the last two weeks I know Woods has gotten better with the rotary cutters, getting them delivered in a lot earlier than what they said. So we're kind of stocking our lots up a little bit right now.

Tom Zack Evans (04:42)
I know the Gators have been a hot commodity the last few years with all the enhancements and whatnot that they have on them. Are you able to get Gators and zero turn, mowers, that kind of stuff?

John Allen Mason (04:54)
Gators are the days of going to a lot. Picking out a gator. I think they're done for for the foreseeable future. We're marking everything sold. It's sold five or six months ahead of time. There's nothing that comes on our lot that's off a truck that's not sold. Had two come in yesterday and they were all excited, but they're both sold since March.

Caleb (05:15)
I was going to say that's something that's unique, too. We're all sitting here around the table and talking about this stuff and I think we all three have bought equipment from John Allen, so that's just a testament to him. But talking about the gator deal, I don't know what I'd do without it on the farm. I'll just be honest with you. I mean, that thing is the handiest piece of machinery and it's used daily.

Speaker 5 (05:36)
Yeah.

John Allen Mason (05:36)
You don't know how handy they are till you don't have them one day, and then you realize, man, I really need that.

Shelby Wade (05:40)
That's right. It's like, what did you do before you had them?

John Allen Mason (05:43)
Yeah, exactly.

Tom Zack Evans (05:44)
Yeah. So we were talking before the show started about prices, what's it looking like on equipment prices.

John Allen Mason (05:52)
So, Deere's fiscal year ends actually today at 05:00. And we've got the notifications that anything that it's not invoiced and on the lot after today will go up seven and a half percent. So that means every tractor is going up seven and a half percent. Everything is going up seven and a half percent. So Deere has kind of been the one to lag back on the raising their prices, but they're finally catching up. And they do every quarter is how they do their price increases. So this is kind of a big one at the end of fiscal year and end of quarter also.

Caleb (06:25)
Does that flat increase across the board? Would you reflate it kind of like an inflation increase, I think.

John Allen Mason (06:33)
Just catching up. Yes.

Caleb (06:34)
Okay. All right. That's what I was wondering. I didn't know if there was truly, from a production standpoint, if they were running into issues there.

John Allen Mason (06:41)
Yeah, that's part of the fact. And part across the board is they don't raise every quarter, so this is just their time to raise.

Caleb (06:49)
I will say this, though, in terms of financing wise. If you were looking dealership financing and actually looking through the actual manufacturer, John Deere actually offers some really nice financing through John Deere Financial as well.

John Allen Mason (07:02)
Yeah, like I said, we still offer the 0% on a lot of new equipment. I guess three months ago, a couple of pieces, like, kind of the bigger pieces, 0% went away. That's what everybody's talking about now, that once these new incentives come out Monday, that how long the 0% will go for or if it will be even intact in a lot of equipment.

Caleb (07:22)
Yeah, we were talking here right before the show started. I mean, honestly, the days of 0% are, unfortunately, maybe coming to a close in the grand scheme of things. When you look at prime today, the Fed is talking about raising rates again another couple of times before the end of the year. So, I mean, all that things or all those variables really go into that.

Tom Zack Evans (07:43)
Caleb Meade Tractor participates in the Farm Credit Express program that we offer at our local equipment dealers here in central Kentucky. And Meade is a big user of that program. And John Allen, especially, is a big user of that program. So when you're buying a new piece of farm equipment or used, you need to ask about Farm Credit Express for your financing. Those rates, especially on used equipment, are competitive. Obviously, if you can get a 0% deal or something on New, Deere might be the best way to go, but you need to check on the cash discounts because if you use Farm Credit Express, you would qualify for that. Interest rates are going up, and I don't even want to say here on the show because they, you know, they have been going up progressive every week. But ask to ask about Express because if the equipment is ten years or less old, it's zero money down, which is pretty attractive. Your loan gets booked locally here, so if you have an issue or you need to come in and talk to a loan officer, you can. And of course, these loans all pay back the patronage refund, like all of our other loans here at Ag Credit do.

Caleb (09:04)
And I would say that too, to the listeners when we talk about getting booked locally. It doesn't get booked in Paris itself, for instance, because that's where we're at today. But let's say that you're out of Stanford or out of Lebanon in those offices, those pieces of equipment, if you're doing business in that office, that loan gets booked there under the same loan officer that you have. So anything else, guys, as we wrap up here with John Allen?

John Allen Mason (09:28)
No, thanks. I appreciate you having me up here and talking today.

Caleb (09:31)
Yeah, we really appreciate you coming on and listening in on this segment of Beyond Agriculture. We're going to take a quick break and then we'll be right back, make a few phone calls, and we're actually going to get some producers that are actively working in the field on Today. I really appreciate our listeners and we'll be back right after this break.

Speaker 6 (09:50)
My name is Shane Turner. I'm the Chief Risk Officer for the association. I've been with Central Kentucky Ag Credit since 1987, going on 35 years. I've served in various roles in the association. I've been a loan officer, I've been a branch manager, I've been a regional manager, an appraiser, a vice president of Credit, and now a Chief Risk Officer. I've had the pleasure of working with a number of different employees over the year, some who are still here, some who have retired and moved on. One of the things that makes this organization so special is the culture. Anybody who comes to work here seems to immediately understand that this is a very unique organization. It's a family oriented company to work for. We're small, we've got just over 50 employees, but everybody knows almost by first name the kids and the spouses and things that are going on in the lives of each other. And that can be good or bad sometimes, but for the most part, it's always a good situation. The organization, the people who work here really believe in the mission, and that is to serve the farmers of Central Kentucky for their needs as far as financing, whether it be for cattle or equipment or for real estate.

Speaker 6 (11:25)
And I believe that we would not be as successful or have the culture that we have if our employees didn't buy into that mission. Most of the employees in the association are also farmers on the side, so I believe that brings some perspective to the job. And so it's just been a real pleasure to be here for such a long period of time. I'm kind of entering the twilight of my career, but still have a few more years in me, and I couldn't recommend a better place to work for than such a Kentucky AG credit.

Caleb (12:00)
Hello, and welcome back into beyond agriculture. Thank you for sticking with us. Now, we're joined this afternoon or this morning by Jay Rankin. He is a farmer here in Bourbon county, and he's actually out in the field, so we're joined first time for Beyond Agriculture via the phone. So, Jay, how are you?

Speaker 5 (12:21)
I'm good. How are you all?

Caleb (12:22)
Great. Doing good. Well, let's kind of open it up a little bit. How about you tell the listeners a little bit about yourself and your family and where you're located at here in Bourbon county?

Speaker 5 (12:33)
All right. I've lived in bourbon county all my life. I grew up on the farm. I'm married to my wife, Lindsay Hedges. She's the former Lindsay Hedges. She grew up in Bourbon county as well, on a farm. We've got three kids. Aubrey is 13 and an 8th grader at Bourbon county middle school. James is wait, this is bad. James is six, fixing to turn seven. He's a first grader at Bourbon Central elementary. And Bellamy just turned one last week. And for anybody who she took her first steps last night.

Caleb (13:10)
No joke. That's awesome.

Speaker 5 (13:11)
Good deal. We're all excited about that.

Caleb (13:14)
They always say it goes by fast. Mine's two and a half now, and it does not seem like that's possible.

Speaker 5 (13:20)
No, it's not. They're growing up. I try to stop and smell the roses, as they say, because you don't realize what you miss until it's already gone so there something else.

Caleb (13:41)
Yeah, that's exactly right. So as we carry on here, Jay, tell us just a little bit about your operation, and then we'll kind of feed off that and maybe answer or ask you a few questions and things along the way.

Speaker 5 (13:53)
All right, so we raised corn and soybeans and wheat. Those are our primary crops. We raise alfalfa, we raised rye the last couple of years, we've gotten in a program through American Farmland Trust, raising rye for grain. We do that. Like I said, we do custom hay bailing for two or three horse farms and anybody else, we do pasture innovation, custom corn chopping. This year we had three right at 3000 acres of corn and soybeans. And then I have approximately 225 commercial cows.

Caleb (14:38)
Needless to say, you're busy around the clock all the time.

Speaker 5 (14:42)
All the time.

Caleb (14:43)
I ulocation-wisBnderstand. That's awesome, though, in terms of location wise, us talking to you today, we kind of know where you're located at, but for the listeners. Where are your production locations at here in central Kentucky?

Speaker 5 (14:56)
Well, mainly in Bourbon County. Today I'm actually standing in Clark County talking to you. I've got farms in Clark County, of course, bourbon, Fayette a little bit in Scott and Nicholas. So we're spread I was talking to another friend of mine the other day and he said he was spread out 55 miles and I'm spread out 30, I think I figured it's 38 miles from one farm to the other. So we travel a lot.

Caleb (15:27)
Now. I was talking with having some little dialogue here with Tom Zack, too, while you were talking there as well. But from a management standpoint, do you have some guys that work for you at that point in time as well?

Speaker 5 (15:41)
Well, I've got three full time employees. I've got a couple of other guys that work other jobs and help at nights and on the weekends. And then, of course, we've got the family, dad, John. We all try to help each other when we can. Dad's actually calving some heifers for me right now. John is my brother. We kind of trade labor as far as things with the cattle. He's really good with cattle, so he does some stuff with heifers for me. We trade out some equipment and stuff like that and different things rent. So we try to play to our strong suits and what we like.

Caleb (16:41)
It makes it easier when it's a family operation and you can really depend on your family. That's the same boat with me.

Speaker 5 (16:48)
Yeah.

Shelby Wade (16:48)
And it's great having you on Jay, because a lot of our customers are family operations spread over a few generations and brothers and sisters and cousins and whatnot. So it's good to bring that perspective. We are here at Recording at the end of October, basically. So how is the 2022 harvest going for you?

Speaker 5 (17:07)
You couldn't ask for better weather as far as the harvest goes to cover the ground that we've covered with the equipment we've got, I feel very blessed to have gotten as far as we have, but we need the rain. I've got heat in the ground that really needs really needs a drink. The pastures need to drink. The cattle, not all the cattle are on city water. So ponds and creeks are starting to dry up.

Caleb (17:46)
We hear about it from ADM and things like that. And we monitor Mississippi river level right now. And that's a big problem just from the standpoint of getting grain down to Louisiana and down to the ports right now.

Speaker 5 (18:01)
Right. That's kind of been the biggest hold up. If ADM or the other graineries are shut down, especially on the weekends, then there's a lot of people that have to stop because they don't have storage. We've been lucky because we do have storage. We go to the bins and we're going to bag corn this week. The corn is as dry coming out of the field as I've ever seen it. And talking to some older farmers that I know, that's the driest they've ever seen it coming. And to have the yields we're having a drought year. Of course it'll be dry, but it wouldn't be any good. But we're seeing good yields, good test weights, very minimal damage. So the storage has been kind of a lifesaver for me and some others that I know as well that haven't had to stop on the weekends. We can just keep running.

Tom Zack Evans (18:57)
Jay, what kind of current yields and moisture are you seeing?

Speaker 5 (19:03)
The corn is making everything's making over 200. I've seen on my own some 240s, 250s. I've heard some others making 270 280. And the moisture, the load I just was looking before I got on the phone with you guys. We sent two, three loads this morning. All three loads were in the 13s on corn. And that's out of the field. That's drier than we even try to get it in a grain dent. So it's crazy that it's that dry. But the beans we're seeing, everything is above 60. Some farms are above 70, 70 to 75, but I'd call a good average 65, 68. And the beans are dry. They're starting to pop out. I mean, we've sold some loads that were eight and a half percent moisture. We're losing some money there on the weight.

Caleb (20:05)
Exactly right.

Speaker 5 (20:05)
In terms of so dry.

Caleb (20:07)
Yeah, I was going to say, too. It's gotten so dry and it's been so dry for so long. Now, if these guys haven't gotten, let's say they're beans out of the field or whatnot, and let's say it sits in rain, how bad do you think that we'll start to see those beans start to pop and crack and come out of the pod?

Speaker 5 (20:28)
Well, we used to worry that they would swell and pop out, but I think they're so dry it's going to take a lot of rain to get them to swell enough to cause them to pop out. We're seeing some popping, but it's not as bad. The worst part is not the pop and stand in the field. It's when the sickle on the Cutter bar or the head hits it. That's when they're shattering. I'll take the rain. Let's go that route. I would rather see it rain and lose some of the beans popping out and shelling out than not have the rain. A guy, I'll say this real quick, a guy told me one time when I first started farming. He said, you can farm in the mud, you can't farm in the dust.

Tom Zack Evans (21:15)
Yeah, that's true.

Caleb (21:17)
It is dry enough right now that we'll get five or six tentsix-tenthshs of rain. And by lunchtime, it doesn't seem like we got anything.

Tom Zack Evans (21:25)
We got what, three tenths this week. And you can't tell it?

Caleb (21:28)
Yeah, not at all.

Speaker 5 (21:30)
I'm standing here getting ready to move this combine, and it rained a quarter an inch here. Was it day before yesterday or two days ago? And the beans here on the edge of the beans here on the edge of the field that I just checked, I could be running here in the next hour or so, and the only reason they're holding on is because of the dew this morning.

Caleb (21:52)
Yeah. From a marketing standpoint, Jay, talk a little bit about that. Do you forward contract a lot or do you send everything basically to the river?

Speaker 5 (22:03)
No, we forward contract and it goes to the river, but it's through them. I do sell some corn to sell a lot of my corn to Rip's Farm Center in Tollesboro, and they buy pretty much all my corn that I don't sell during harvest that I can't store.

Caleb (22:23)
Got you.

Speaker 5 (22:24)
But as far as the marketing goes, I use a company, they're out of Indiana, and they do my marketing for me. I don't want to sit in front of the computer or sit here on my phone and try to guess, well.

Caleb (22:41)
At that point in time, your money ahead to pay somebody to market it for you, and you worry about the production level. That's right.

Speaker 5 (22:48)
And it was hard to the first year or two, it was hard to turn that over because that's our income, that's our livelihood. But after I saw the results, I don't even question him anymore. He'll call me and say, well, all he calls me for is he'll call and say, hey, are you seeing a bump in yields or a reduction in yields? I need to adjust accordingly. I'm going to sell this. And when he starts saying, well, what do you think, are you okay? I don't even question him. I just tell him, you take care of it.

Caleb (23:18)
Got you. And this is maybe getting in the tea leaves a little bit, but from a marketing standpoint of other producers here in central Kentucky, what percentage would you say would be like that? Use contracts or just deliver it when they get done running it?

Speaker 5 (23:39)
I would say most of your full time farmers, if that's what they're doing for a living, they all do that. Getting up there in acres, you've got to hedge your risk.

Caleb (23:54)
I got one more question in regard to the harvest this year. We talked about the Mississippi River level there, and basis has gotten a little bit better just from me knowing, but let's say three weeks ago or even four weeks ago, how bad was the basis on corn and beans at that point in time, if you weren't delivering on a contract, Jay?

Speaker 5 (24:18)
Beans got to, cash beans were a dollar i think, I could be wrong, but I think they got to I can't remember if they got to $2 under the basis, I honestly don't remember. I know we were sending to a different grainery because the basis, this was for some people, one farm in particular that I'm thinking of, we were sending across the river because they didn't have any contracts. And like I said, it was a partnership, but they hadn't done any contracting. But I sat down and showed them and next year that farm is going to contract.

Tom Zack Evans (25:02)
And you might explain to listeners that don't know what the basis is, what that means.

Speaker 5 (25:08)
The basis is what they're paying, what the grainery will pay under Chicago Board of Trade. And sometimes it's more than what they'll pay because they want the grain, if that makes sense. If the Board of Trade is paying $14 for soybeans and they've got a negative 50 cent basis at Adm, that.

Caleb (25:31)
ADM is paying 13.50, that directly correlates. Right. Now to the issue they were having getting barges to move. That grain down the river and not being able to not be able to load the barges near as heavy as.

Speaker 5 (25:45)
What they think they're loading them. I know two to three weeks ago they were loading what they call what I was told was 80% draft, which means they could load it 80% full. And I think they're down to maybe 60, 65%. Now, I don't know that, but I think that's what she was speculating the lady that I talked to up there.

Caleb (26:06)
We were talking here just briefly before we got started, and John Allen made the comment, or somebody did, that Mississippi River in Memphis was like 10ft deep and that's just unbelievable.

Speaker 5 (26:19)
Yeah, unbelievable. I haven't heard any numbers like that, but any number at all as far as that. But that's crazy. Somebody said one of the tributaries, you can walk across it. I did hear that. That comes into the river, but you don't know what normal level is on that tributary either.

Tom Zack Evans (26:37)
Jay looking at 2023 crop year, grain market and production forecast, what are your thoughts on fertilizer and fuel cost looking ahead for next year?

Speaker 5 (26:51)
Well, as far as the fuel goes, anybody turns the news on now is going to be scared about anything, but they're talking about diesel fuel and a shortage. And I was actually at the fuel station this morning and they were sitting there waiting because they bring fuel straight to the field force, straight to the combines. And he said, I'll bring you some when I get some. And he said, I don't have any. And we were talking and I said, well, when you get it, just come fill everything, fill the trucks, which he filled my bulk tank at the farm, at the shop. He filled it last week, but I've got him filling. I've got two fuel trailers and three tractors sitting with the one combine. I said, we're going to fill everything. And when I left, when I was getting ready to leave, the transport came in with fuel and it was like Christmas morning to them because they've been waiting since yesterday morning for fuel. So we're already seeing it's bad enough what the prices are, but if we're going to have a shortage that's even worse. As far as fertilizer goes. I haven't read a whole lot about that or seen anything.

Speaker 5 (27:57)
I'm sure it's like anything else, it'll probably get worse before it gets better.

Caleb (28:01)
Jay as we wrap up here, we really appreciate you coming on, and honestly, it worked out great being able to join via the phone, and this is something that we'll be able to do going forward. So we really appreciate you taking the time out of your busy day to come on and join us on Beyond Agriculture, and maybe we'll try to get you back on in the future here when we circle back around to Bourbon County and see for an update.

Tom Zack Evans (28:26)
Thanks, Jay.

Speaker 5 (28:27)
All right. Thank you all.

Caleb (28:29)
Thank you. Thank you for listening to Beyond Agriculture. Make sure you go out and, like, share and subscribe to our podcast. We'll be back on in the future with future episodes, so we really appreciate our listeners listening in, and thanks again for listening to Beyond Agriculture.

Speaker 7 (28:46)
This episode of Beyond Agriculture is brought to you by Central Kentucky Agcredit. Thanks for listening to the podcast. Be sure to visit Agcreditonline.com Beyond Agriculture, access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

Don't miss hearing Warren Beeler talk about his experience with the 80s and the crash of the hog market in the 90s. Learn more about Kentucky Ag Finance, and why we need more people in Agriculture and not just farmers.

View Transcript

Must Listen To Podcast! Mr. Warren Beeler sits down with Ag Credit to discuss all things agriculture. Youth, Hogs, 1980's, Agriculture and the life of Mr. Beeler! 

Caleb Sadler (00:01)
Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations, and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello, and welcome into Beyond Agriculture. Caleb Sadler with you today. I'm also joined in the Lebanon branch by Patrick and John Peek with me. How are you all doing today?

Warren (00:36)
Good.

Patick (00:36)
How are you?

Warren (00:37)
Good.

Caleb Sadler (00:38)
Finally got some pretty weather. Sun shining today, so it's been a little different than the dreary old rainy days the past couple of days, so that's good to see. So we're also joined today with Mr. Kentucky Agriculture himself, Mr. Warren Bealer. Warren, how are you?

Warren (00:54)
I am good. I've been called worse things than Mr. Agriculture. I'll take that.

Caleb Sadler (00:59)
That's exactly right. Well, the stuff that you've done for Kentucky Agriculture, it certainly speaks to itself. So we'll dive right in a little bit, I guess you could say. Some of the things that we're going to cover today. We'd like to get in a little bit about how the 80s kind of relate back to today and some of the similarities that we're going through with the economy right now and some of the history that you have and the roles that you've played over the course of time. So let's start off tell us a little bit about yourself and your family and where you reside and some of the things that you do.

Warren (01:32)
Well, I'm fromCaneyville, Kentucky, which is about 50 miles west of Elizabeth Town, right on the Western Kentucky Parkway and raised up on a dairy there. My dad and brother Mill for 41 years and then went to Western School and majored in animal science and then ended up come right out there and got a job with the American Yorkshire Club, starting in the Hulk business. Didn't know a thing about the hulk business. Wasn't the whole guy interesting? The guy that interviewed me, Mr. Connancer, never asked me a thing about hogs. He just asked me about family and people, and I had lots to talk about there, and so that was wonderful. Then about a year later, I switched back to Hampshires to get back in the Southeast, and then it sounded like I've had a million jobs. And then Dr. Brown at Western called me, and when they built the Expo Center at the college there, I was the first director of that. Most people don't know that.

Caleb Sadler (02:30)
Wow, I did not know that either.

Warren (02:31)
That started and then actually, Hampshire called me back about a year after that to start the very first junior association in the swine industry. I went and did that for about three or four years until the money ran out. Bought a farm in 1980 there in Caneyville. Not the home farm, but a farm of two or 3 miles away, and started hog farming a little bit there in 1980. And not the best time in the world to be starving. I was very lucky to get a farm loan from farmers home administration, which kept my interest rate low there. But operating money in the 80s, again, the 80s got to 18, 20%. I paid some of that, and there's no way to do things like that. So I I've been very lucky. Hog business got so good in December of 98 that my wife said, you got to get a real job. And I went to Frankfort and had a bunch of jobs in Frankfo rt, from great and CPH cattle in the beginning as a beef marketing specialist to being over shows and fairs and then being over the animal marketing, which is market news and and those and then I spent 16 years there and then and I went to the governor's office with with Governor Bevin and Governor Bashear.

Warren (03:46)
So I've been really lucky. You know, I tell people, you know, the I love the hog business. When when you have litter pigs, it's like opening Christmas presents. I wasn't in it like your family wasn't in it to just make calls. We were in try to make a good one.

Caleb Sadler (04:03)
Yeah, that's exactly right.

Warren (04:04)
And that was a passion and an obsession, and I missed that. I missed that every single day. But with the hog business the way it was, if I could have stayed in it, I'd probably absolutely have nothing now. As a result of starting over at 43 years old, I probably provided for my family better than I ever had. And I got to see things that's just absolutely I see agricultures from so many different views. It was really special. Yeah.

Caleb Sadler (04:36)
And I can go back I'm going to relate a little bit here, too, because, I mean, you've been a very instrumental role in my life. I'm trying to go back and remember, giving oral reasons, doing livestock judging and things like that, I think you are maybe one of the first people that ever made me put down my sheet of paper from reading off of it and just give it. And what that's done to me today is, I mean, it's fabulous.

Warren (04:56)
So no doubt I've told a million of you, of you all that you see them fine, you see them fine, and you get so much more confidence when you put down the sheet. You quit seeing your notes, and you start seeing the animals in your head, and then you can really describe them and get it right. I wouldn't take anything. I did the first livestock judging clinic right in the 80s when I started farming, and we had about three or four chapters there. In about three years, it got so big I couldn't get it in my shop. And then we moved it over to Bowling Green, and that's why we started the first expo. Expo, yeah. We only had a hog show. We took the hog show and a lamb show and put it in there. Then we added the others over time. Then we added more head than we added Murray. I'm proud of that.

Caleb Sadler (05:45)
Those are big events, too, and it draws a lot of kids to those expos across the state of Kentucky, no doubt on that end of it. So I did see that the other day where you had posted somebody had posted a picture, and it was one of the first livestock judging, I guess, practices you had had at your farm. That was pretty neat to see.

Warren (06:03)
The FFA kids it got so when they come to our clinic, they went to the FFA contest and they won. And so then everybody got to come in. And so all we had was a tarp up at the time. And that's even before Dee and I got married. And so it was wonderful times, you know. Wonderful times.

Patick (06:26)
I'll tell a little bit of my age. I remember going to one of those three well, I guess it went to all three of them from day one. And I remember getting a car and they said, we're going to Canyville this guy. Warren Bealer. He's the guy. And I was like, we're never going to get there. It was forever. In a way. I was like, Where are we going? But like Caleb said, those times and learning from you that steered me in the direction I am now. And I think you even made us at that time take away your notes and you just got to do it from inside. And that brought you out of your shell and taught you to talk. And things that we do now start it from there.

Warren (07:14)
I'm proud of you guys. I'm proud of all the things. The biggest need in agriculture, if you get out and really study it, is we need people. We need people more than anything else. More than anything. People make things going. People make things not go. And attracting people to agriculture is the biggest chore we've got in the next 10-15 years when it comes down to it. And that's not just farming. I'm talking Ag Credit. I'm talking in every aspect processing technology, geneticist. My son Ben has a PhD in nuclear engineering from Georgia Tech. Got his postdoctor UC Davis and UC Berkeley. He's a professor at NC State. What a waste. I love him, so I'm proud of him. He got all his mother's genetics, but I think about what he could have done for agriculture. The Jersey guy at the North American. The Jersey Secretary, he tells me he can pull hair now on a baby bull calf. Look at the DNA and have that calf 71% proven. That's the fifth year, Caleb, of seven years to prove a bull. Just need people to identify it all. Take all the guesswork out of make this farming thing where it's not so much plant it and hope or freedom and hope.

Warren (08:33)
It's calculated. And that takes people. And that's why it makes me feel good that maybe in some places we influence folks enough where they want to be part of this thing we call agriculture, which is exciting as it can be even though we have little trouble selling that.

John Peek (08:53)
I agree with you, Warren. My daughter is an FFA right now. And to see those kids that are in FFA and the potential in those kids but how many of them can we keep in agriculture? And I understand honestly, I don't know that I want her to go into agriculture at this point because, number one, farming is tough. I don't know that I want her going into farming. But hopefully somewhere in the AG industry we can make a place for these people because we have kids that are interested. And that leads me back. I had a question. You were talking about your history. There was a hog farming. Was that something you grew up with? Was that just an opportunity with the farm you were looking at or was that just happenstance?

Warren (09:36)
Had no background at all, hardly growing? I think dad had my dad was a typical farmer back in those early days. He had a little bit of everything and didn't do anything very well. Tobacco, dairy, a few hogs, grew crops to feed them. But the hog business to me came about as a result of being a field representative for Hampshires and Durocs. And I absolutely fell in love with it. Dr. Gordon Jones on the judging team at Western I loved that judging part of it and that built a passion for me. And then being around. And what I did for those three years I was a fieldman. I visited hog farmers five, six, seven a day, every single day. I got home 15 nights in a year, never over two nights in a row. Spent one Christmas on a holiday in Arkansas because the guy scheduled the sale on the 26 of December. But I got a real passion, and that's why I came home. I didn't have any facilities. I built all my own facilities. Facilities in the 80s were terrible. We were trying to move from the dirt and didn't know how to do it. Today's facilities are amazing.

Warren (10:42)
Just how much performance we've increased from the 80s to now we've increased hogs from 240 to 280. Same amount of time. We've gone from 20 pigs per sow a year to 30 pigs per sow per year. And we've gone from a pig, basically that was too fat. Had 1.2 inches of fat and a four and a half inch pork chop. Now to .075 fat on a 280 instead of a 240 with 6.8 pork chop. I think Gordon Jones being somewhat of a hog man like he is he's just a good livestock man and a great teacher. And being around all those I heard Philosophies one guy tell you all performance testing is a way to do it. And the next guy would tell you that's the biggest waste of time it ever was. So you had to sort a lot of it. But I came home and wanted to make good Hampshire hogs and I was doing really well, getting along good and selling. We got to 400 or 500 boars a year, 2000 gilts. And in December 98 when hogs got to $0.10, all the farmers were in their sixty's. And they say, I'm not going to pay for this farm again.

Warren (11:52)
And they got out of the hog business and dozed their buildings and we were done, right. And so I missed that. Back in those days in the 80s I could sell hogs at five or six different places. I'm talking about you had Armor and Fisher in Louisville, you had Boss in Nashville, you had Fields in Ornsborough, you had Cons in Cincinnati and you could get them to bid against each. We had buying stations in all the different facilities. And it was different. Had thousands of hog farmers. Then basically we had a whole new different business. We had feeder pig people. Try to find a feeder pig these days. You know, we, we went from a 40 to 60 pound pig Wigwam. Used to get 5000 of them on a Wednesday over there. And Glenn Massingale in Monticello get tons of feeder pigs. Guys just raising 40-60 pound pigs. Now we don't even hit that. We don't even have a nursery. We take pigs straight from the sow to the finishing floor with with heaters and stuff and nursery things all gone. So the in the technology and the innovation from the 80s to now it's just off the charts.

Warren (13:03)
But yeah, I love the hog business. I'm a Hogman. I call myself the Hog Man from Canyville, even though I'm a former Hog Man, but always be a Hog Man.

Caleb Sadler (13:11)
It's so interesting though, because there's parts of that that I didn't even know when you grew up. I didn't even know you had hogs. Like you all didn't have hogs when you grew up. So that's very interesting. And to see the technology evolve, I mean, $0.10 in 1998 for hogs? That's crazy. I can go back and look, there's a place that I rent right now. And you talk about the transition from dirt and how everybody used to have pigs. It's very similar to the farm that I have right now. Used to be a pig farm, some of it. So I've got some grated floors with slats in it and some of the barns. And I think Ben, that's on our tech today, same situation in his place too. So it's amazing to see Kentucky agriculture, how it's evolved over the time, no doubt.

Warren (13:55)
I think it hurts people's feelings because we've gone from small farmers that did a little bit of everything and very diversified, but not very big at any of it, to more consolidation. Now we've only got one buying station that's JBS. Swift in Louisville. They do 10,500 a day. And one person is supplying 25% of their hogs, Jimmy Tosh, out of Tennessee and Western Kentucky. So it's just different. Not that it's bad. And then what's happened to us, we see on the hog side, and then now with the chicken thing coming in and being huge, we see contract.

Caleb Sadler (14:33)
For me, that's what I was just about to get into myself. We were just talking about it here before we started recording, and we're talking about the chicken side of it and how it's more contract based right now. And it seems that the hogs have gone that way as well, too.

Warren (14:48)
What contracts have allowed us to do. So we get a loan for you guys with that contract. We can basically lock things in. The hog thing may be even better sometimes because we get paid by the pig space in most of those situations, rather than you only get paid in the chickens if they're in. But they're building those buildings. They can flat, grow and be healthy and do good in those buildings. My daughter Molly, and her husband Luke, have built two mega chicken houses for Tyson. They're doing a little bird, and in 32 days, they got a four pound bird. Wow. They run the thing from their cell phone. She teaches kindergarten and she gets a buzz, you know, alarm. She changes the humidity by changing the fans from her kindergarten room. It's amazing. Last group they sent, in 31 days, birds weighed almost four pounds with a feed conversion of 1.47. They eat a pound and a half of feed and they gain a pound. Now, you tell me that's not perfect genetics, perfect nutrition, perfect environment where you don't get that done right. And the thing about that contract is it's low risk farming.

Warren (16:01)
You don't worry about feed going up and down, market going up, down. You get paid for your work. And it's allowed tons of young farmers to get back into farming. And you were talking about your daughter. I'm telling you now, we need her in agriculture. 17% of the population works in agriculture. Only one or 2% farm, right? So John Sticka , who's the head of certified Angus beef, got his Masters at University of Kentucky. I asked him, what kind of people do you need? He said, Well, I need people trained in meats. But more importantly, he said, I need people trained in logistics, which we're not teaching. How do you track it from the farm to the meat case? Will we some way, some smart young person who's going to identify being able to DNA meat and track it right back. I mean, there's so much out here. The most interesting thing about agriculture is all the things we don't know yet. I mean, there's tons of stuff. A guy comes in the office when I was at the governor's office and he had this PhD from MIT, I wasn't for sure I was smart enough to talk to the guy, but he's a brilliant pharmaceutical guy and he had a product called artemisia.

Warren (17:09)
Artemisia is the only medication for malaria in the world. And they were raising it in Vietnam. Not controlled, just terrible. They came to Kentucky because you raised it like tobacco. Okay, but that wasn't the interesting part. The interesting part was they use artemisia in other countries like we use chemo to treat cancer and UK's on their 3rd, 4th year maybe, of studying. And it's very positive with this stuff. You don't lose all your hair, you don't have a side effects, you know, and I know there's a cure for cancer somewhere out here and it's in some agricultural plant or something. We just got to have the right people to figure this thing out. And I mean, that's so intriguing. It's all the things we don't know that make agriculture so exciting and should attract young people to it. We just got to let them know it's just not farming, it's everything. You're right.

Patick (18:10)
And it's difficult, Im raising teenage son that just graduated last year wanting to go into engineering, and he hasn't taken a lead role in the farm. But I said, listen, with engineering, remember what you've learned on the farm. Because that common sense, a lot of those ideas, one day you'll use them. And I think you hit a very valid point. It's hard for young kids to knock that door down into agriculture because it became so small they don't know where to go. But if you can find that door, knock it down, it'll open up the world for you.

Warren (18:49)
I mean, you talk about a place that needs engineers, it's agriculture. When you talk about precision farming and being able to soil test the ground, go over a poor piece of ground, put less seed, with more seed, what's the next step up all the genetic engineering that we need to do to feed the world? How do we do it? CRISPR gene editing. It's all there. It's just opening the door. And that takes really smart young people attracted to agriculture.

Caleb Sadler (19:23)
You brought up a good point there. I was with somebody last week and they were looking about grid fertilizing on pasture. You see that on row crop. But from a pasture standpoint, you don't hardly ever see anybody grid sampling on fertilize. And that just goes to show you that agriculture is coming full circle. I mean, there's no doubt. So one thing I will I'm going to get back a little bit on track a little bit too. No, you're good because it's all good conversations, all good content. So we were talking about the 80s little bit and going through that. How would you see that that relates to today inflation rates and the rates that you were talking about? Obviously, we're not back at 18%, but we are in a market where interest rates are climbing right now. And get your take on that.

Warren (20:11)
It's a little bit scary. It's very similar because it seems like every time we had market prices get just good, then that's in the hog and this grain would get high and the feed cost was a major input and fuel and the whole deal. It's tough and, I mean, we in agriculture live on hope and with the weather changing and getting crazy and we were burned up for the first half of the summer and then we've had two inches a week ever since. It's very similar. I mean, it's difficult on the farm, I think, to know I bought 72 rolls of hay, thinking we're not ever going to make any hay and then it rains every day.

Caleb Sadler (20:53)
After I bought the hay, got an abundance of hay.

Warren (20:55)
So it's, I think, so similar. We have to, in agriculture, really have to study and limit risk to the degree we can. I mean, we're living on something falling out of the sky, but at the same time there have been opportunities for us to contract.

Caleb Sadler (21:14)
That's exactly right.

Warren (21:15)
Both livestock and grain. We've got to be smart about what we're doing. When I was at Governor's office, we did a feasibility study over in Russell County about how to they're taking soybeans all the way to Owensboro is there enough beans over there? And there wasn't enough beans, but what they did, they went to white corn, they went to more of a niche marketing type deal and adjustment so they didn't have to make that trip. Now you start hauling beans these days with these fuel prices, you're taking all the fun out of it. It's terribly similar and I don't like it. I do think the one thing that's come out of COVID that is interesting for agriculture is, I think, people when the shelves got a little empty, people figured out just how essential agriculture is, got to paying attention a little bit, and that was good for us. Did we take advantage of it? Not a bit. We have got to do a better job of telling our side of the story and that we've done agriculture better and it's ever been done and we learned something every day. It's going to get better and better.

Warren (22:26)
We've got to sell it at the same time.

Caleb Sadler (22:29)
You know, you were talking there a while ago, too, and one good point to bring up that's difference between now versus what it was maybe like in the 80s is the fact of future contracting. I mean, whether you're a row crop operation or you're selling loads of cattle or whatnot, we've got the internet is one of the best tools that we've got right now to be able to mitigate those risks from a farming standpoint. If you've got an opportunity to lock in a break even or a profit, we need to be taking advantage of that in these markets.

Warren (23:00)
We got to have Internet to farm.

Caleb Sadler (23:02)
That's exactly right.

Warren (23:03)
Do GPS all our stuff. In the 80s when when I was running the roads as a feeling. I had to stop at a payphone and call people. Now zip it's on everybody's hip, and the whole scope of technology is just off the charts. You wouldn't even think about it. You try to find you a phone on the side of the road now you're just going to be looking pretty hard. They're gone.

Caleb Sadler (23:31)
Yeah, there ain't any payphones left.

Warren (23:34)
That's the thing. I think we have to really embrace technology and agriculture in terms of really figuring out what the next step is, how do we make it better. Whether it be apps on the phone for record keeping or financial records or dealing, I think that's in the 80s, we did it the hard way. I mean, back then, I remember going into fields and disk and a 20 acre field with a seven foot disc and staying all day next day and whatever, and now they couldn't turn around something them in a 20 acre feet.

Caleb Sadler (24:11)
Exactly right.

Warren (24:12)
So it's just a different ball game. And the economies of scale have dictated a little bit. You can buy a load of bean meal is cheaper than a semi. Load of bean meal is cheaper per unit than a bag of bean meal. You can argue whether that's good or bad or not, but that's just the nature of the beast. And now, where we used to back up with a pickup load of hogs in 1980, now you better have a semi. What I think you see is now our small farmers, we need to market like we're big guys. We need to network together more. We need to get people where when we sell a load of cattle, we got 50,000 lbs. That's exactly right. And then we basically can take advantage because Kenny Burdine, University of Kentucky, says selling load of cattle versus selling one at a times $20+ a 100 weight, and that's coming off market news. When that load comes in, they pay attention.

Patick (25:13)
The livestock deal, spending the last 15-20 years in that market, the cattle deal is probably the slowest one to come about. But like you said, selling the load lot, cph sales, yellow tag sales, different stockyards have different programs, people pay attention to those. Those are ways to get into those markets where if you have smaller numbers, you can get in on the bigger load lots and capture those prices. But like you say, things are changing. Even that industry is changing rapidly right now, going more direct. And whatnot what happened us in the.

Warren (25:56)
Hog biz in the early 90s is hog were too fat. We were losing 4% of demand a year. Doctors say, don't eat that stuff and plug your arteries into fat. 1.2 inches of fat and a four and a half inch pork chop. It was not good. So what do we do? We start buying on the grade yield system with a fat a meter, basically measuring fat, measuring loin depth. And we increased that decreased the fat, increase the muscle. And as a result, we made those hogs where they were even marketable from an export standpoint. So consistent. And how long till we get to the cattle business? How long till we got to go and you couldn't sell just to the buying station. They were going to buy your hogs based on how they cut out, not based on pounds like we did for years. How long do we do that in the cattle business? Until you go and say, well, this calf is a yield grade two low choice, so you get an extra $50 ahead and let that filter all the way down. We're a feeder cattle state. We in agriculture are bad about doing all the work and doing it really well and getting the end of the trailer gate, let somebody else decide what it's worth.

Warren (27:13)
And I'd like to see that change. I think a lot of them that have gone to marketing their own beef when COVID hit and all our processing got backed up and you couldn't sell anything, or if you did, took a beating on it. I was on three dairies one day and they were selling their Holstein cows and started going through the processors and selling the hamburger and said, we'll never, ever sell a cull cow again. And so the idea of value beef solutions, the new program where we're taking the cull cows here and run through the processor, buying those cows on a grade and yield system, increases value for the farmer. We got lots to learn, lots to evolve in time, and we watch each other's species. Yep. You can see what's going to happen.

Caleb Sadler (28:05)
That's exactly right. And to see that change, like you were talking, this is in the see that to what it has evolved to now, see what 40 more years will do to it. The technology and the drive behind it will be substantial.

John Peek (28:18)
Well, that's another thing that you were involved with was through the Governor's Office of Ag Policy, the bull program. Look at cattle when I was a kid, which was, I'm not going to say but a long time ago, but they were ever color, size and shape. Now we've got a lot more consistent cow herd. We've got the bull program. The genetics on the cattle are better, the marble and genetics are better. The growth is better on these cattle and our cow herd, but a lot of farmers aren't getting paid for it. Like you said, there's still work needs to be done.

Warren (28:49)
I think you do. You can't sell them one at a time anymore. You got to get them in groups, and groups have value. That's what it comes to. But the bull program, I was involved in putting together the epds even before I got to governor's office. And genetically, what we've done is we made farmers look understand epds number one, and then basically figure out kind of how that fits. And deal. Used to be they come to your place to buy a bull and they bought the biggest bull. Now, that's not the case. They go to sheet, they look they got to have heifer bull. They got to have a balanced trait bull, or are we going to use this bull as a terminal sire? We need growth and muscle. And so we have done a really good job of teaching that part. The one thing probably we didn't do enough at the time that bugs me to this day is that we probably didn't teach enough visual the part of it where based on right now, if you're selling your feeder cattle based on what looks they get priced on what they look like.

Warren (29:49)
So we should have been teaching with the EPDS. We should have been teaching the visual. And we did. We had feeder cattle programs. I did a ton of them. What they need to look like and medium frame number one or high two is exactly where you need to be. It's not the bigger the better. You get them too big, they'll discount you.

John Peek (30:09)
Right.

Warren (30:09)
And you get them too little and discount you. So there's a window. But teaching muscle shape, teaching soundness, teaching body volume, teaching what they need to look like to go in there and get the top price to market.

Caleb Sadler (30:22)
Yeah. And when you talk about that, I can just go back and look like the early 90s, what the cow herd used to look like, big, tall, lanky frame things with no body. And now looking at what data is actually done and we don't look at phenotype enough. You're exactly right. I mean, the visual side of it, we can sit and look at the piece of paper until it's blue in the face. But until we actually put lay eyes on them and see what they look like, that's the phenotype really matters, too.

Warren (30:48)
Those figures don't tell you how sound they are.

Caleb Sadler (30:50)
That's right.

Warren (30:51)
When it comes down to it, don't tell you everything. It's terribly important. When you look at reproduction, for example, low inheritability, those that do, do, and those that don't, won't. So we deal with those that do. And then we go and start looking at other things which have been amazing, though the progress we've made. I'll never forget I was grading CPH. Can I tell nuanotherrse story?

Caleb Sadler (31:13)
No, go right ahead.

Warren (31:13)
I was grading CPH and we were going on the farm and grading them. And I was up in Breckenridge County and nicest gentleman in the world had 17 cows and they were black, baldies, little bug eyed things, about 900 lbs with a big rock in her pocket. And he had bred them to a limousin bull.

Patick (31:30)


Warren (31:30)
And he had 17 of the prettiest calves you've ever seen. Medium number ones. Next year he bought his his heifer bull with his tobacco money. I go back and grade them and they're so little I can only get seven of the 17 to be big enough to be small. So the rest of them are outs. Oh, wow. And he said, you know what's bad, Beeler? They're bred back. But we learned. We learned so much. I mean, every time experience is the greatest teacher in the world, you mess up and you don't do that again and it comes down. So it was really intriguing. I mean, there's nothing worse standing there and you're going along grading those cattle. One gentleman, I'll not mention his name, but he's a real leader in this state and a wonderful man I was an Owensboro and grading cattle. And he brings in this little short, fat one. And if you put a dot in the middle of her back, that means it's short, which was a 20-30-40 cent dock. And I popped him right in the back, and he'd stand on the catwalk over the top of me. He says, Beeler, I knew you were going to do that.

Warren (32:41)
And I said, Gosh, we're making progress. Go home and sell that cow. That was what it was all about, is teaching. And the greatest thing we did with the debacle money is get people in the classroom, get people not what they learn from speakers, but what they learn from each other. If you're doing it, you're doing it, and you're putting the whipping on me. I'm going to do what he's doing. And that's how we just got him better. We got them so much better.

Caleb Sadler (33:09)
That leads straight into the next topic, because that's what we were going to talk about next, was the AG Development Fund and the vital role that you played into that because Kentucky is very unique in that standpoint, that we actually took our tobacco settlement funds and we've reinvested those in the state of Kentucky. And tell us a little bit about your time at KDA and with that program, the governor's office AG policy.

Warren (33:30)
Well, at KDA, when we started, Kentucky Proud, and we're proud of that program. I mean, it is recognized almost all over the state now. We got 170 farmers market. Most people seem to deal with the small producers at the farmers market produce kind of thing, but it's in everything. It's in everything. And so it's funded by the Ag Development Fund and then administered through the Department of Ag. Well, I get the governor's office. I was just paralyzed just to watch and see what walked in the door every day, you know, in terms of of how much this money and I traveled all over the state looking and I mean, it has it's made a difference. We took half the money, half put it in health care, and half of it in agriculture. Now, in 20 years, I mean, it's millions and millions of dollars. 35% of that money goes to the counties based on how much tobacco burly tobacco you had in 1997 or whatever, whenever it came in several counties. Two counties didn't get any money and some didn't get hardly any money. I changed that and I asked the board if they would give those counties at least $30,000.

Warren (34:40)
So they did that for several years. And we touched farmers we didn't get to touch. But the county money is sacred. It encouraged you to invest. You want to build that little cattle working facility here we got here we got 2000, 2500, $3,000. You're going to spend that much? Yep. So we improve facilities. We don't have to tie the bumper the pickup anymore to, to give them a shot. We've got facilities. That was the, the bull program on the county level. The cattle people have benefited probably greatly from it. But now when you look at the other side, when COVID hit and we figured out, oh gosh, we can't get them processed. Process went from two months backed up to a year backed up. So we come up with a program in three weeks. We came up with a program of incentivizing expansion. But you had to prove that you're going to kill more Kentucky animals. And they put $7 million in that now expanded processing by $25,000 in state. And it's not even close to being enough of what we really need to do in terms of that part of it. Ag Finance is a Cadillac.

Warren (35:46)
Ag Finance is the legacy of the tobacco settlement money. When in fact we deal with you, we deal with the lenders, bankers. And what we do is we take the pressure off you. Particularly we like the one that is a little higher risk. We like the one, the young guy doesn't have anything and he's got no collateral, no nothing. We're willing to stick our neck out there and put our money in the deal to get him. As long as it's safe and smart. You're not going to bring us a loan. That's not smart. But the idea is we keep that interest. They said to me one day our interest rate is 2% and then the lender gets three quarters of a percent for doing the work, administer the loan we need to raise our interest. I said that's not the business we're in. I said if anything we need to lower ours. Now we're a 100 million dollar little bank there in Frankfort. We got the only money in Frankfort making money, helping people. Everything else, once it goes out, it's gone.

John Peek (36:50)
And that program is invaluable for getting these young farmers started.

Warren (36:54)
Oh yeah.

John Peek (36:54)
Because like you said, somebody who doesn't have enough collateral doesn't have enough down payment. Ag Credit has used that program over and over and over to help these people get started in contract poultry, especially in other areas. It's one of the greatest programs.

Warren (37:07)
And see people don't understand Ag Finance doesn't go to the farmer basically they go to the lender. And that's how this thing works. And it's a great relationship. It's been so positive and it will be the legacy when they may come any day. The Frankfort folks can come in, sweep the money and take it, but not Ag finance. Ag finance is there for in perpetuity in terms of being able to help farmers, and particularly 68% of the loans, typically when I was there, were what we as far as beginning farmers, young beginning and small farmers. We were so proud of that.

Caleb Sadler (37:47)
It is a great program. It is a great program.

Warren (37:50)
We're lucky Caleb. I mean, it's tobacco settlement money. I mean, I asked people in other states, they don't even know they even got it. 46 states got it. See, they put it in the general fund, they just threw it away. And we're the only state that really took it and made genuine investments. When the money showed up, we were probably 3.5 billion in terms of gross, you know, farm gate receipts. Now we're six, six and a half billion. And you know, that wasn't always all tobacco money, but, you know, we, we sure have helped. We've sure helped. We do it, we've helped farmers do it better.

Caleb Sadler (38:27)
Well, and to think about that, how much we've grown over that time, how much of those tobacco settlement funds have actually helped us grow that amount? Oh, yeah, I mean, a lot of it.

Patick (38:36)
It's definitely a lot.

Warren (38:37)
You said stockyards watch them come through compared to bare 1980. Absolutely. You'd be paralyzed.

Patick (38:46)
I can vouch for that. Like you said, the bull program, the ability for those farmers get cattle up, give them at least a round of shots. They may not give them everything, but they might give them at least one or two. The health of cattle, the ability for them to get them up, the genetics, everything. And even to that, the stockyards being able across the state, being able to expand, do things better, cattle handling facilities there, handle the cattle with less stress. And that's a two fold too, because it was passed back down to the farmers because a lot of those places didn't have to raise their cost of sales in order to offset those costs. It worked out great, I think.

Warren (39:37)
Good cattle are easier than selling bad catttle. It makes it easier for the stockyard system and the whole deal. And I mean, we do see a real growth in networking between small producers to get to the size where you can capture some extra value. And that's the thing. If you load a semi load of anything, you're going to increase by milk. It doesn't matter. I mean, you're talking about the dairy business. My dad milked back there. Our herd average in Kentucky at the time probably was 10,000 or 12,000. Now we're at 20 and we've lost going from over 2000 dairies down to 375. But the ones we've got, Ken Platt put it in the bucket.

Caleb Sadler (40:17)
Yeah, they're efficient.

Warren (40:18)
And now what we got to do is we got the biggest issue we've got, other than needing people second, I think, is how do we convert technology to fixing our labor issue? And, I mean, we got problems trying to find help. Nobody wants to do the hard work anymore. I hauled Hay the other day, and I didn't want to do it either, but I did. Finding people, so robotic milkers.

Caleb Sadler (40:46)
That's what I was getting ready to go to. I mean, if you go to California and you tour are one of those big dairies out there, or Wisconsin, I mean, it's all robotic, every bit of it.

Warren (40:54)
And I mean, it's just it's everything we do. How do we need to get these young people get your daughter involved in building and engineering the stuff that will go in and gleen these vegetables out of the fields and do all the things that basically we're having so much trouble finding anybody that wants to do it that we're so dependent on H2A, and that's getting more expensive and tougher all the time. To do so, we need people. I can't tell you in agriculture, we need people, not just farmers. And I think the biggest one the biggest one is just what you brought up. We need great Ag teachers. Ag teachers are the recruiters. I mean, they're the ones that put the passion and to start with, all of us sitting here probably had one of them. It was great. And I did. I think teachers are the most important people in the world because everybody starts over, learns that we all start ABC, One, two, three. We don't start where Grandpa ended. So having teachers and having AG teachers who have just the passion and the next thing you know, dealing. I told Mayor Fisher I fussed him in Louisville.

Warren (42:03)
He's a big cheerleader for Urban Ag and for the whole local food movement. I said, you can preach all you that want to about it, but you've got to have FFA, Chapter. You've got to grow people in agriculture. And Seneca has got a great program up there, and they just flock to it. We need a bunch more of them, right? In the city of Louisville, I mean, we've got Ag people.

Caleb Sadler (42:25)
It's not necessarily Louisville, but I can relate to that in Paris. So in Bourbon County. You've got Bourbon County schools. Great FFA department. Well, Paris school system now has founded an FFA chapter, and they have the most kids of any other extracurricular activity or anything like that that are in the FFA chapter of that school system. And that is a place that needs that.

Warren (42:48)
What we are becoming agriculture is a novelty to the public. I mean, we're down to just a handful of people, Grandpa and Grandma is the only one's that got contact anymore. And so when you bring it in, it's new and it's different. It's interesting, particularly when you sell it. Right. We can attract a lot of people. I love FFA. I think the most profitable talent you can have is to be able to get up in front of people and be persuasive and convincing. And the more people we have like that in agriculture, the more leaders we're going to have down the road. Ag Teachers and FFA. I'm a big cheerleader. All in. All in.

Caleb Sadler (43:29)
So as we kind of wrap up a little bit, there's one thing on the agenda that we talked about. And I don't know if you're still doing it or not, but it had to do. And I got this topic from Shelby Wade, who helps co host the show sometimes, too. But the zonkey business, are we still involved in that?

Warren (43:49)
I got a bad spot where that rascal bit me right now through a Carhart coat. Well, I'm telling you, we brought him in. I had the most fun. I mean, people there would drive back my road and you know how far it is back in the weeds? They drive back my road, rubber neck and looking around and the neighbors would say, my husband said that was a zebra. We bought this zebra, me and Darren Benton. Darren Benton out of out of Mulenburg County. We partnered up on him. He came out of a petting zoo and was just as friendly as he could be when he got there. But then once we put him in with the donkeys and then he absolutely figured out he was a boy, then he got mean. And I mean got meaner and meaner, bit me over the gate. Oh, man, just grained to hide. And so I told Benton, I said, listen, now that thing gets much meaner, I'm going to make a rug out of him. The donkeys hated him. Every day he was there, they hated him. And he buddied up with one of them. And I thought, maybe I'm getting something done here, but we got nothing done.

Warren (44:59)
And finally the zebra hurt himself and the vet come and they passed away in a mild way. I could tell you the story, but it probably wouldn't be good for the podcast. But I had the most fun. I was playing. Honestly, I was playing. I thought I was going to get rich crossing donkeys and zebras and calling them zonkeys, but it did not happen. And I hate it because I'd love to be rich.

Caleb Sadler (45:29)
Oh, man, that's a great story. Well, Warren, we really appreciate you coming on today and joining us for the podcast. Really always good to have you on and hopefully maybe have you on Back in the Future again. So with that being said, we really appreciate you all for tuning in to Beyond Agriculture. And be sure to go out and like, share and subscribe to the podcast. Thank you very much.

Warren (45:54)
This episode of Beyond Agriculture is brought to you by Central Kentucky Ag Credit. Thanks for listening to the podcast. Be sure to visit Agcreditonline.com/ Beyond Agriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can. And join us next time for Beyond Agriculture.

The Kentucky State Fair is starting this week. In this episode, you will meet Joe Goggin, Regional Lending Manager for Ag Credit, and one of the State Fair Board Members. Hear how the Championship Drive and selection of the Top 5 in each species came about. Learn more about the activities at the fair and what new events are taking place this year! 

https://www.kystatefair.org
https://www.agcreditonline.com 

View Transcript

[00:00:01.270] - Caleb Sadler

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of Ag and into the real-life stories, conversations, and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello and welcome to Beyond Agriculture. Caleb Sadler back with you today. We're sitting here in our Paris branch. I'm also joined with Shelby Wade. Shelby, you doing okay?

 

[00:00:31.940] - Shelby Wade

Yeah, doing good, Caleb, been working on some loans and get ready for a trip we're taking next week. Me and a couple of loan officers are going down to Columbia, South Carolina to our main bank, AgFirst, and we're doing some Farm Credit University training down there, so I'm looking forward to that. It will be my first time traveling with Ag Credit since I've started.

 

[00:00:52.590] - Caleb Sadler

I remember going to the I've been several times and our guest on today will get to that a little bit later, but I'm sure he can enlighten us some there as well. But I've been several times the bank and it's always great to get back down to Columbia or in Charlotte to those places where we meet typically with the bank. So thank you, Shelby. Ben, we've got him on a man behind the scenes running our tech. You're doing okay, Ben?

 

[00:01:14.510] - Ben Robin

Yeah, I'm doing pretty good. I was going to pitch in there. First time I went down to the bank was Dr. Kohl was going to be there for Farm Creek University and I guess the change in weather maybe in the fall or something and I lost my voice.

 

[00:01:27.960] - Shelby Wade

Oh, no.

 

[00:01:28.340] - Ben Robin

So I couldn't participate in any of the activities there. But it's really good experience and you have fun.

 

[00:01:35.720] - Shelby Wade

Yeah. Looking forward to it.

 

[00:01:37.160] - Caleb Sadler

Good deal. Well, we also are joined with us today in the, I guess you could say the studio with Joe Goggin. He is an employee of Central Kentucky Ag Credit and been with the association for a while now. I'll let him tell you a little bit about himself. Thank you for coming on, Joe.

 

[00:01:55.600] - Joe Goggin

Thank thank you you for having me today. As he said, my name is Joe Goggin. I was born raised in Boyle County, Danville, Kentucky on a farm. Our family has always farmed run beef cattle primarily. Most of my life we've had registered Angus cattle. We've also run a lot of feeder cattle, backgrounding them primarily during the summer, buying them in the spring, selling them in the summer and fall. And actually Caleb did something this spring I thought I would never do. My son, who farms full time since he graduated from UK, had finally talked me into getting rid of the last of my cows. So it's the first time in literally 50 years I don't own a cow right now. And just really backgrounding some steers for him. So they'll hopefully be gone by the holidays. Caleb and then this winter a lot less stress doing that. So yeah, just with work it just got to be I couldn't do the AI work that I wanted as I wanted to do it with my cows. And this just made a lot more sense, and I think I'm going to enjoy it, actually.

 

[00:03:06.060] - Caleb Sadler

Yeah, I can tell you. I mean, I can relate to that because, my gosh, when it comes fall and I'm sure Ben sitting back here, he can say the same thing, it's a lot. By the time you start to juggle a full time job and then full time job at the farm, AI cattle and setting all that up, that's a lot of work at that point.

 

[00:03:21.250] - Joe Goggin

When you run fall calves, and then you're trying to breed them in late November and the days are shorter, and by the time you get home, it's dark. Yeah. It really gets to be a challenge. But that's the good thing about Ag Credit. Most of our loan officers, they do farm on the side, and so they know about agriculture and all those challenges.

 

[00:03:41.080] - Caleb Sadler

So, Joe, we brought up the fact that you don't have any more cows anymore after you said nearly 50 years. So I won't get into your age or anything like that on the podcast.

 

[00:03:49.930] - Joe Goggin

I started young.

 

[00:03:50.890] - Caleb Sadler

That's right. There you go. But tell us a little bit about how long you've been with Central Kentucky Ag Credit and your family as well.

 

[00:03:57.960] - Joe Goggin

Sure. I started with Central Kentucky Ag Credit in July 1992, so I've just passed the 30 year mark there.

 

[00:04:07.290] - Caleb Sadler

I won't tell you. I was born right around. 

 

[00:04:16.450] - Joe Goggin

That's part of the reason. And you've mentioned you grew up with both of my kids. I got two kids, son and daughter. And you and my son Logan were in college together, and you all knew each other growing up, showing Angus cattle around the country and around Kentucky together. But at the time, I was working for the Kentucky Cattleman's Association, and I had started work with Cattleman's Association out of college in 84, and it was a great job. I was at that time called a field representative.

 

[00:04:52.490] - Caleb Sadler

Okay.

 

[00:04:52.790] - Joe Goggin

And at that time, Kentucky Cattlemen Association had three employees, myself, the executive director, and the office secretary.

 

[00:05:01.550] - Caleb Sadler

I had no idea when I started.

 

[00:05:04.040] - Joe Goggin

In 84, there were two employees. I was the first at that time, like I said, we called them a field representative in my job, and it had a grand total of, I think, 697 members statewide.

 

[00:05:14.010] - Caleb Sadler

Wow.

 

[00:05:14.660] - Joe Goggin

So, I mean, it was really in its infancy when you think about it. And my job was to go around the state, work with counties, get county organizations started. I started work with the Cattleman's Association the first week of August in 84, and I went to Louisville the next week or ten days later, and that's when the cookout tent was in its very first year. Well, we use volunteers to come in. Garland Basten was the Executive Director of the Cattlemens. He's the one who hired me. And wonderful I had retired from UK, specialist there in the AG College, and he was the announcer in Broadbent Arena for all the shows. So he takes me to Louisville, we go to the cookout tent. He said, okay, here's where you're going to be. We've got county organizations coming in. We work two shifts per day, and if you need anything, I'm going to be in Broadbent Arena there. Here's where your supplies are, over there. I knew nobody. I'm fresh out of college.

 

[00:06:20.510] - Caleb Sadler

Here's the key.

 

[00:06:21.270] - Joe Goggin

Here's the key.

 

[00:06:21.890] - Caleb Sadler

Yeah, there you go.

 

[00:06:23.000] - Joe Goggin

You talk about getting baptized by fire. I mean, I'm still wet behind the ears, knew nobody. But in hindsight, it was the best experience, because over the course of that ten or eleven days of that State Fair,

 

[00:06:37.820] - Caleb Sadler

you got to meet a lot of producers.

 

[00:06:39.350] - Joe Goggin

 I met over 200 producers from around the state. And so then I kind of kick started and started going around the state, county meetings and seeing the same people. It was a large time. We had a fun, good time. But I learned real quick when counties came to the state fair to cook for the Cattlemens, they wanted to show up and immediately put burgers on the grill. At that time, we didn't do steaks, it was just the burgers. They wanted the grill to be ready to start cooking on. And that evening, when the last one went through the window, you turned around and they were heading to the cars and trucks, and I would turn back around and there'd be like 10-15 coolers I had to wash that night. So this stuff to put up.

 

[00:07:22.410] - Caleb Sadler

So what I'm taking away from this is every time when we get ready for the annual meeting, that's how you've gotten this job of getting the grill ready.

 

[00:07:30.950] - Joe Goggin

All of the grill experience came from was the years.

 

[00:07:34.360] - Caleb Sadler

It all comes back around full circle now.

 

[00:07:36.300] - Joe Goggin

So anyway, back to getting to add credit. By 92, my first child, Logan, was born. He was a year old and spending a lot of time, my wife Theresa was very understanding, especially in our early years, and she would go with me a lot. Going to cross the state. I might be in Murray one night at a Cattlemen meeting and then Morehead the next night because I was the only person going with three employees.

 

[00:08:06.940] - Caleb Sadler

Yeah, that's crazy.

 

[00:08:08.690] - Joe Goggin

And so then when you start having a family, I thought, okay, that was fun, it's time to slow down. And the opportunity came up for a position for a loan officer in our Danville office. And so I applied, and that's when I started work with Ag Credit, July of 92. And I think we affiliated with Ag First Farm Credit bank in Colombia in July of 94, just two years, two years after. So I've been here through that transition. Interesting. Today, starting in 2018, I actually moved from the Danville office to Lexington, and now I'm a Regional Lending Manager, which is basically I am headquartered in Lexington and our Lexington branch, but I also manage the Stanford and Richmond branches as well.

 

[00:09:03.380] - Caleb Sadler

Awesome. Now I know there was a stint there in between there and this is going back to my lifestyle days. Now you did move and go to Anderson Circle at one point in time in there and then came back.

 

[00:09:16.490] - Joe Goggin

I had gone, I think it was in '05, from Danville to our Stanford branch as Branch Manager and in '07 opportunity came up. Anderson Circle Farm in Mercer County was a very large cattle operation as well as crops. But Mr. Anderson, the owner, was wanting to get back heavy into the purebred Angus operation as well as maintaining the commercial herd. At that time they had, I think, 1200 cows, commercial cows, 12-1400. And the opportunity came up and actually Joe Myers and myself went in this kind of co-managers of Anderson Circle.

 

[00:09:59.610] - Caleb Sadler

I remember those days.

 

[00:10:01.140] - Joe Goggin

I was there a couple of years and then as that was getting kind of winding down and before it sold, I came back to Ag Credit then.

 

[00:10:09.600] - Caleb Sadler

got you, I understand completely.

 

[00:10:11.350] - Shelby Wade

So you've had obviously a long stint here with that credit. What has kept you here over the years and obviously brought you back after that stint? As far as an organization goes.

 

[00:10:20.780] - Joe Goggin

It's a great place to work. It's very satisfying. You get to do something where you can truly see that you're helping people. If you kind of have looked at your job as not so much as making loans, you're really working with people to kind of make their dreams become reality, whether it's buying a farm or getting in the cattle business or the sheep business or whatever. Sometimes it can be challenging. Sometimes you have to maybe tell somebody, maybe we can't do this, but maybe let's look at scaling back and do this type deal. And I think it's part of our job is to be sure we're not leading somebody down the path to get them in trouble. I tell newer loan officers, your job is really not making loans, it's assessing risk for both Ag Credit and the borrower. And you got to keep that in mind.

 

[00:11:20.180] - Caleb Sadler

Yeah, you bring up a good point there too. And I always look at it assessing risk side of things, but when you look at it, we're loan officers but we're also financial advisors at the end of the day as well. And we're advising people whether it's a right decision or wrong decision. So there's a whole different can of worms there that we play too.

 

[00:11:40.940] - Joe Goggin

That's the great thing about Ag Credit is. Like I said. The coworkers here. But they all pretty much farm and if they're not actively farming right now. They grew up in a farm.

 

[00:11:54.150] - Caleb Sadler

They had a hand in it.

 

[00:11:55.060] - Joe Goggin

They had a hand in it and they understand when somebody comes in and they start talking about whether it be a cattle operation or an equine we've got people that fully understand what they're talking about. Maybe some challenges they're going to potentially face and can help them guide through the path they need to go.

 

[00:12:15.660] - Caleb Sadler

Good. Awesome. The reason we have you on today really is our upcoming Kentucky State Fair, and you serve in a unique aspect, I guess you could say, from the association, as well as your own standpoint being on the State Fair Board. So tell us a little bit about your role there and the things that you do from a state level for the youth of central Kentucky or Kentucky in general.

 

[00:12:42.400] - Joe Goggin

Sure. So I was appointed to the Kentucky State Fair Board in May of 2016. And if we've got a minute, I'll tell you an interesting story about that. They changed, actually the legislation. They rewrote the legislation at the General Assembly during the session in the winter, spring of 2016. Well, I was somewhat oblivious of that. I hadn't really kept up with it. And prior to that, Kentucky State Fair Board members did not have term limits. There was a lot of at large appointees on there that really didn't represent any specific organization or segment of agriculture or any other business. And in 2016, the legislature put a bill through, and it really defined who sits on the Fair board. And in conjunction with that, put term limits. So you can serve a maximum of three, four year terms.

 

[00:13:36.510] - Caleb Sadler

Okay.

 

[00:13:36.810] - Joe Goggin

And then you have to rotate off. So now we have representatives. I represent animal agriculture.

 

[00:13:43.730] - Caleb Sadler

Okay.

 

[00:13:44.060] - Joe Goggin

So organizations such as Kentucky Cattlemen Association, kentucky pork producers, sheep and wool producers, and the dairy, they get together and they submit six names, and from that six names the appointee is made. At that time, the governor made all of the appointees. Now, some legislation was put through this past year that now split some of the appointees to the Commissioner of Agriculture, as well as the Governor maintaining appointees. But anyway, back to 2016, Warren Beeler was the Executive Director of the Governor's Office of Agriculture Policy. Governor Bevin was in office, and he calls me and he said, Goggin, I need a favor. I said, well, sure, Warren. I've known Warren for literally since 1980s, I guess. And I said what do you need? I've got to have ten names on the governor's desk by 10:00 in the morning of people I recommend to put on the Fairboard. I said, okay. He says, I won't put your name down. I said. Oh, whoa. Okay. What's that involved? He told me, I knew it was going to be a big time commitment. And I also knew Caleb and Shelby, that our CEO, Jim Caldwell at the time was on vacation, and he totally couldn't communicate with him where they were on vacation.

 

[00:15:04.650] - Joe Goggin

He said, I'm going to email you a form. I want you to fill it out and turn it right back around to me. It's a form you have to fill out in order to serve on any state board. I said, Warren, I don't have permission. I'm going to have to check on this. And he made the comment. He goes, ah, Goggin, don't worry about it. He said, These all come down to political appointees. Honestly, you've got a better chance of winning the lottery. Keep in mind, this was in March. And so I filled it out, turned it in, I kind of forgot about it. A month goes by, I really had forgotten about it. Friday of Derby weekend, he calves me. It was Oaks Day. He said, Goggin, and he was traveling to Ohio to judge a swine show, and so his cell service was breaking up. But in between clipped out words, I got the gist of his message was the governor was going to announce the Fair Board nominees on Monday and that I was in the final group. I said, oh, shoot. And so the first thing I did was called our CEO, Mr.

 

[00:16:09.770] - Joe Goggin

Jim Caldwell, at the time and said I kind of did the thing a month ago. And so he was fine. And Ag Credit been wonderful with it to represent in a way not directly, but as an employee of Ag Credit, you do kind of carry that name with you when you serve on boards like this, whether it's State Fair Board or your local cattlemens or Farm Bureau, whatever organization you're in. And Jim said, I just got one piece of advice. Joe said, don't do anything to embarrass yourself or the person who sent you there or Ag Credit. And said, Well, I don't plan to, but I would definitely. So anyway, that's how I never met the Governor. It's just that Warren called me back then and said he was shocked that the Governor at that time took all ten of the names he submitted and made the comment that he wasn't going to make political appointments. He wanted people on there that would do the job and work.

 

[00:17:09.440] - Caleb Sadler

At the time, that was a really good team that worked back and forth.

 

[00:17:13.050] - Joe Goggin

Exactly. Yeah, exactly. So that's kind of how I got on the board. I've served there now six years this past May, like I said, represent animal agriculture. And so we're excited about State Fair coming up here in just a couple of weeks. It's a huge undertaking. In the eleven days of the fair, we expect close to 600,000 people come through the gates that's in the fair. There's just so much that goes on when you deal. And like yourself and myself that grew up showing cattle, and my kids grew up showing cattle and market hogs, and you tend to get in the west wing where the livestock is, and you get isolated off and you don't really experience the rest of the fair. And it really is an eye opening experience to be on that board and see everything else that goes on, not only at the Fair, but all of the other events.

 

[00:18:03.480] - Caleb Sadler

Yeah, that's why I was just getting ready to hit on that. I used to show cattle growing up and whenever we go to the state fair, it was a week long trip. We always looked at it like a vacation.

 

[00:18:12.590] - Joe Goggin

Exactly.

 

[00:18:13.490] - Caleb Sadler

Either that or junior nationals we were going to that was our vacation for the year. And we go in and we'd stay in that west wing and we really wouldn't get out to experience the remainder of the fair. Shelby, I don't know where is it the same with you in the pig barn?

 

[00:18:26.030] - Shelby Wade

We did actually get out a lot. So like you guys, we were there, we camped out, took it as a vacation. My parents took off work and such, but we always took at least one or two days and went all the way around the fair. So my favorite part was going through and it's changed a little bit since I was there, but going through all the exhibit halls for whatever reason, the cake decorating was my favorite. Probably because they're like just crazy good. But, you know, all the tobacco that was in there, the hay, the corn, just photography, anything that you can imagine there is a category that you can compete in. So yeah, I actually really enjoyed doing that.

 

[00:19:09.050] - Caleb Sadler

There was one thing that I never really got to look at because I think it was after whenever the cattle moved out or whatnot, or it was at the end of the week was the pumpkin contest.

 

[00:19:16.920] - Shelby Wade

Yes.

 

[00:19:17.410] - Caleb Sadler

And when they bring those big things in there, I think that's pretty cool.

 

[00:19:22.530] - Joe Goggin

Interesting you brought that up the last three or four years, actually. And we started it somewhat as a joke. We had a couple of our board members that just kind of they're very outgoing and they said, hey, we're going to emcee this and just kind of make it a production. And we call it the Pumpkin and Melon Show now. And it's at the way in. Well, because last year, the way the schedules are, there's nothing going on in the west hall that first weekend and where it had always been held outside and it was hot and everything. We've moved the entries the weighing in of the giant pumpkins and watermelons into the west hall, put bleachers up. We had a huge crowd. It was actually the most viewed live stream of the state fair the last two years. It's phenomenal the number of people that tune in and watch that and then pick it up throughout the next ten days.

 

[00:20:15.800] - Caleb Sadler

Well, you bring that. I mean, we talk about that and we get on the topic of pumpkins and we're ag lenders at the same time, but I judged the cattle show at the Big E one year, and I think it's Connecticut, if I remember right. But it's a big deal up there for them. They'll have like 15 people or maybe more than that, and they'll bring these pumpkins in. And these people, I mean, it's like their baby. They've baby all year.

 

[00:20:39.250] - Joe Goggin

This year, for the first time, we're actually sanctioned with the national organization, on these giant pumpkins and watermelons. We actually had a state fair record last year on the size of the pumpkin. And this guy literally when that weight came up on the scales, they take such care of these pumpkins that when they're growing them, they actually roll them onto these pads so then they don't have to move them. They just go on underneath a pallet that this pad is on and pick it up. So when they're entered in their way, they're inspected. If you have any crack or blemish in it, then it's disqualified.

 

[00:21:17.910] - Caleb Sadler

Oh, no joke.

 

[00:21:18.890] - Joe Goggin

This guy, a year before his was disqualified, it had this slight and underneath it, it was starting to crack.

 

[00:21:25.910] - Caleb Sadler

Oh, man.

 

[00:21:26.680] - Joe Goggin

And this year it was exciting because he was down, everybody was inspecting. Then it got the go ahead to be put on the scales. And then when it won, the guy literally was sheding tears. He spent so much time and everything on it. It's like Caleb. One of us going to junior nationals.

 

[00:21:43.310] - Caleb Sadler

That's exactly right. Or winning or something.

 

[00:21:45.360] - Joe Goggin

Yeah.

 

[00:21:46.130] - Ben Robin

I was going to say for the listeners that don't know what is the size of that, how big is it?

 

[00:21:51.430] - Joe Goggin

Ben,I don't remember. I want to say 1700 and change.

 

[00:21:57.450] - Caleb Sadler

When you think about that in the size of a pumpkin.

 

[00:21:59.930] - Joe Goggin

Yes. What they go through, watering every hay and the fertilizer and fusing in with the water. They've got it down to a science.

 

[00:22:09.120] - Caleb Sadler

I always heard that they could infuse milk into the vein of the pumpkin and it would make it grow bigger. I don't know. I don't know the truth of that either. I talk like I like I am an expert.

 

[00:22:19.030] - Joe Goggin

But they're very open sharing. This guy will provide seeds for anybody that wants to get into it and grow giant pumpkins. He'll provide you pumpkin seeds to do that. So it's really a neat group, but it's become a very popular event at the state fair. That first Saturday, we weigh in the pumpkins and watermelons.

 

[00:22:39.690] - Caleb Sadler

Yeah. Do you ever cut the watermelon after they weigh them in?

 

[00:22:42.070] - Joe Goggin

I haven't, no.

 

[00:22:42.730] - Caleb Sadler

I was going to say I probably wouldn't want to eat that. It might be too sweet or might be a little bitter.

 

[00:22:49.950] - Shelby Wade

Like some of the things we've mentioned here for the listeners who maybe haven't been to the State fair as not as familiar with it as we are. The things that we're mentioning, a lot of these different categories of things that people enter into are youth for each FFA members. So usually age nine through 21, usually. And then we also have some adult entries, adult classes as well. So it's really all categories and all ages. And everybody is involved in these types of things as well. And even in of course, we're talking about livestock. We're livestock people, but even younger get to be involved in that with novice classes and things like that. So just kind of give a background on ages.

 

[00:23:30.490] - Caleb Sadler

No, that's awesome. I appreciate that. So I will bring up one thing because I think you played a vital role in this when they did it, and that was the conversion of the Sale of Champions over to a Championship Drive.

 

[00:23:43.900] - Joe Goggin

Yes.

 

[00:23:44.410] - Caleb Sadler

Which, if I could go back and look at my showing career, I wish this thing was in existence. And I think Shelby would agree. I wish this was in existence when I was showing because it recognizes so many people and it puts so many people and so many youth under the spotlight. So tell us a little bit about that side of it. And Shelby and I both know a little bit, so we might even be able to feed off each other here. But tell us a little bit about that transition and what made you all go to that route.

 

[00:24:11.740] - Joe Goggin

Of course, the Sale of Champion started, I guess it was in the late 1970s, and started out it was the Champion and Reserve market steer, market lamb and market hog. And then obviously, when the market goes up, came into competitive, being shown at the State Fair level, then that was added as the four species. So at the Sale of Champions in it, it was very successful in its goals of promoting the youth livestock showing and highlighting. But really, the one drawback to it was it only emphasized and promoted the four youth who had the champion and reserves of each species. Well, 8, 4Champions and four reserves for the four species. And so a group of State Fair board members, we went to Indiana, they had started theirs up there a few years ago, and we watched their Championship Drive and came back and said, this is what we really have to do. And I will give really most of the credit to Warren Beeler again as well as Dr. Richard Coffey who was head of the Animal Science Department at University of Kentucky recently. Now at Oklahoma State University.

 

[00:25:35.080] - Caleb Sadler

Yes.

 

[00:25:35.880] - Joe Goggin

Both of them really pushed for many years to go from a Sale of Champions platform to the Championship Drive. So what we do now is each of the four market animal species, we pick all of the whether it be class Champions, divisional Champions, or breed champions, depending on the species, which is, by the way, one thing we also changed in the steer market animal class. It was always just yeah, it's always shown by weight, and now we show by breeds. And so that has really picked up and helped our numbers. We knew that there were already some purebred registered steers in the state because they were going to the respective breed Junior Nationals. You had registered Angus Steers, you had registered Hereford Steers and other breeds. And so we decided, well, okay, we're going to have this Championship Drive let's also migrate the steers to show by breed and we pick a top five. It's a Championship Drive. So on each of the days during the show, say for the Market Steer, Market Hog, Market Lamb, Market Goat, we pick the class winners or the Divisional Champions or the Breed Champions, but then they all come back on Thursday night, that second Thursday night at 06:00 for the Championship Drive and it is really quite a production.

 

[00:27:01.650] - Joe Goggin

We pick all of our Market Animal Champions and Reserves and Top Five in each species all at the same night, back to back. It's a huge event. We've had 3000 or 4000 people in Broadbent Arena attending that and that is another one Ag Credit always from the very first Championship Drive stepped up and said we're going to help sponsor this and we're going to help underwrite the cost of live streaming. And that has been huge. Yeah, we get people tuning in from all across the country to this Championship Drive and watching it and really thanks to a lot to Ag Credit for helping underwrite the cost of live streaming that event.

 

[00:27:47.140] - Caleb Sadler

And I think not only this is going off of memory too, but not only does it recognize those four species that night, but the Dairy show is the prior week. So they actually recognize the Champions, I think from that show too.

 

[00:28:01.490] - Joe Goggin

We do. And actually we started last year with the Dairy having their own Championship Drive because we had all of the light rigging and all of the facilities were set up in Broadbent Arena to do it. And so they kind of got a taste by coming to the Market Animal Championship Drive. Really liked it. They had not had an opportunity to really have their own and showcase the Youth Show of the Dairy. And so now we do have a Championship Drive for the Dairy the week before.

 

[00:28:34.800] - Shelby Wade

Yeah, it definitely brought like fresh, you know, just a whole new perspective into the livestock shows. Like Caleb and I mentioned, we've done this for numerous years, I think I showed for 15 years and while I loved it, it's the same thing every year. Like you said, the few times we got to our Champion Drive of the hogs or of the cattle, it's just the hog people watching or just the cattle people. So like having this fresh new light and something that those kids can look forward to having three, four, 5000 people viewing, it's definitely exciting.

 

[00:29:08.400] - Joe Goggin

Yeah, you talk to people, that when those spotlights come on and it's really an exciting event. But now we see it filter back. If you talk to people who sell Market Lambs, market Hogs, market goats or show steers, when kids come to their place looking at those, they talk about wanting to get one to make the drive. And in the past you only had, like I said, in each species you're only picking two champion and the reserve. You only had two for each species. Now we've got 80 kids that go through that drive, through the four species. And so when they're looking to buy market lamb, hey, do you think it's good enough to make the drive?

 

[00:29:51.950] - Caleb Sadler

Exactly.

 

[00:29:52.480] - Joe Goggin

Just excited to make the drive then. Now we've added not only selecting a champion and reserve, but we go down five places. So we do a top five overall, which adds another level of excitement.

 

[00:30:04.000] - Caleb Sadler

That's exactly right. And when you look at it, when you look at it from a competitive standpoint, it certainly added a whole new dynamic. Even I used to show steers at that point. And we brought up the fact that when I was showing it was done by weight. I really wish, looking back now, we should have transitioned to a breeding show a long time ago because the competition level for those other breeds, for instance, in the steer classes is certainly picked up.

 

[00:30:34.700] - Joe Goggin

Absolutely.

 

[00:30:35.790] - Caleb Sadler

So I know one thing that you all have incorporated this year. And I know that Central Kentucky Ag Credit really prides itself on too. We sponsor a Sunshine class through the Fayette county Bluegrass Fair. And I know that you all have incorporated one this year for the Kentucky State Fair. So tell us a little bit about why you all did that and your thought process there.

 

[00:30:57.360] - Joe Goggin

Well, we did, and this is the first year we're going to have a Sunshine Class, and it's going to be the second Wednesday of the fair on the 24th 06:00. It'll be about 30 minutes after the market lamb show ends. And that's something that I brought up as a board member after seeing the one at the Bluegrass Fair that Ag Credit sponsors here locally. And for those who don't know, a Sunshine Class. It's a class where we offer for special needs kids who probably would never have an opportunity to be around an animal like a lamb, a show lamb, and actually have a chance to take that lamb, lead that lamb in the ring in the show. And we're really excited about this. We've seen it at the Bluegrass fair. I've heard about it at some other shows around the country. And it's really a moving experience because it's not only good for that special needs kid to get this opportunity, but you use the 4-H and FFA kids to pair them with a special needs kid, to work with them, to go in the ring with them. What a great opportunity for that 4-H or FFA member to get the chance and the experience of working with the special needs child who never gets this opportunity and actually go in the ring with them.

 

[00:32:16.700] - Joe Goggin

So it's just really a win win situation. It's something we wanted to do on the State Fair level, and I think it's going to be really big. We started actually in the past year a foundation, the Kentucky Exposition Foundation, that is separate from the Fair board to help raise funds for our championship drive and then also for events like this. The foundation is going to underwrite the Sunshine Class at the State Fair. And I think it's just going to be a really exciting event. And I hope the kids in the barn that have animals there get as much out of it as the kids participating themselves.

 

[00:32:56.710] - Caleb Sadler

I think they will. If I look back at my show career, and I think Shelby would say the same thing, that's just phenomenal. I wish that that was something that was in existence when we were showing from a youth standpoint. And what we do today, we try to give our expertise and our guidance onto people, and what better way to do that to a special needs individual? Makes you feel a lot better.

 

[00:33:23.860] - Shelby Wade

How do people register for this?

 

[00:33:27.210] - Joe Goggin

Actually, the staff at the fairgrounds is working on that and getting people to participate. But I know they're going to be working with some schools in the area and they're going to be working with some organizations. When you think of special needs, kids, can be a broad spectrum of different groups that they can work with. And we really hope to if we have 25, maybe even do two rounds of 25, it would just be phenomenal.

 

[00:33:58.960] - Shelby Wade

So if anybody interested, reach out to you or any other fair board members, go to the website.

 

[00:34:04.790] - Joe Goggin

Yes, the State Fair website, the expositions department.

 

[00:34:08.820] - Caleb Sadler

And you said that was the second Wednesday.

 

[00:34:11.380] - Joe Goggin

 Wednesday the 24th. And really something interesting that morning, that's our Sensory Awareness Day at the fair. And so that morning, our Kissel Entertainment, who has the midway rides at the fair, and they are huge supporters of the livestock shows, by the way. They're very large contributors to the championship drive and just a great family organization to work with. But Kissel Entertainment is going to open up the midway that morning for sensory awareness. And the rides will be available for these kids without any lights, without any sound, and so they can come and still

 

[00:34:54.990] - Caleb Sadler

That will be neat.

 

[00:34:55.790] - Joe Goggin

Take part in the midway rides where they may have some sensory issues. There will not be any lights on, no sound, no loud noises, and they can take part in riding the rides on the midway that morning. And that's another reason we wanted this.

 

[00:35:12.190] - Caleb Sadler

Class to back off that evening.

 

[00:35:13.930] - Joe Goggin

And so it just kind of dovetails the two together.

 

[00:35:18.400] - Caleb Sadler

 So anything new that's going to be coming up at the fair besides the Sunshine Class this year, or any, I guess you could say, particular exciting activities that will happen?

 

[00:35:27.440] - Joe Goggin

Well, we're just thrilled to after coming out of COVID in 2020, we had to have a scale back fair where we were one of the few fairs, though we did have our livestock shows and our World Championship Horse show. But that's all we were able to have we came back last year in 2021 with the full fair, but it's still kind of during the COVID, people were still apprehensive and it was very hot. If you remember back to August of 2021, it's kind of like what we've just come through in June and July here this year. But now we've got, like I said, the Sunshine class over in the south wing. Of course, we have Agland. Agland is where a lot of the commodity organizations come together. We have a very large display over there where they all have exhibits as well as the Department of Agriculture, UK College of Agriculture, Murray State, different organizations. And it's an area where people, whether you're involved in agriculture, and especially if you're not, you can come and learn about agriculture. And we have some equipment. We've got a couple of dealerships that are very good about bringing in some large pieces, piece of equipment, and it's really interesting to go over there and watch people.

 

[00:36:46.290] - Joe Goggin

Of course, we're so heavily involved in agriculture, we take that for granted sometimes. But when you go to a place, even Louisville, and people are so far removed and they look at a piece of equipment and absolutely have no idea what it's for or where food comes from other than the grocery.

 

[00:37:06.040] - Caleb Sadler

Well and that's exactly I mean, you brought up a good point there. I mean, all we're trying to do is educate the people at that point. They got to know where their food comes from and how things work and how the world goes around, essentially.

 

[00:37:17.730] - Shelby Wade

For those wondering, what are the dates of the Kentucky State Fair? So we'll get out the calendar here. First day, really action packed here August 18, that's a Thursday, and as Joe mentioned, goes eleven days and ends Sunday, August 28. And pull up a calendar on your phone, go on the website. There's all kinds of events every single day, livestock related, ag related, and of course, things that aren't even ag related, too. So definitely get out to the State Fair. It's an experience that everybody needs to take on at least once in their life. So we make it every year tradition, but definitely get out there and experience it.

 

[00:37:59.540] - Caleb Sadler

Absolutely, yeah. Tickets are cheap, too.

 

[00:38:01.310] - Joe Goggin

Yeah.

 

[00:38:02.310] - Shelby Wade

And a lot of free concerts and things of an evening that go along with your ticket purchased. So definitely a fairly inexpensive family event and very family friendly for everybody.

 

[00:38:15.810] - Joe Goggin

Yeah, and we've got special days at the fair, so reduced ticket prices on certain days. I would encourage everybody to go to the website, Kystatefair.org, and look up and see. We have a military day for any veterans can get in. And we have different special days like that. I know here the first week of August. If you buy tickets online, it's free parking, so that's a big saving.

 

[00:38:45.970] - Shelby Wade

Perfect.

 

[00:38:46.400] - Joe Goggin

So I just encourage everybody to go to the website, check out the schedule and there's something there for everybody. If you get outside of the livestock or the agriculture side, just go outside and it's just amazing to watch, as you can see, truly across section of society at a Kentucky State Fair. And one thing really that is extremely unique to Kentucky. We're the only state fair in America that has a saddlebred horse show and we have the World's Championship Horse show that is held during the state fair and it is a huge event. And people think of Kentucky a lot of times, they think of thoroughbreds and thoroughbred racing. But really saddlebread the show horses are a huge component as well and it is a very big event.

 

[00:39:39.440] - Caleb Sadler

Well, if you think about it, too, I mean, just looking at the Kentucky Horse park, I mean, there's a lot more to equine or horses than just your thoroughbreds coming out of Kentucky.

 

[00:39:49.950] - Shelby Wade

You mentioned the whole aspects of society that you get to see. I've got to tell this story, and I love to tell any time we talk about the state fair. So I grew up in the hog barn, of course, and those of you who've been around hogs, you understand, they have a smell, they have a very strong smell. But watching these kids from inner city schools coming in, holding their noses, dodging, you know, piles of poop and such, they do. And we try to clean up as best as we can, but I always love talking with those kids, though, and their teachers and just kind of like introducing them a little bit to what we got going on. And it's not just like a stinky animal, but I always did enjoy those interactions with those people that I wouldn't necessarily get to have at the farm or, even here where we work. Ag Credit.

 

[00:40:43.990] - Joe Goggin

Absolutely. It's like Caleb said, it's a great educational opportunity, people in agriculture to educate our urban cousins.

 

[00:40:53.070] - Caleb Sadler

That's exactly right. Yeah. I don't even know that we brought this up, but the Kentucky State Fair, if you're listening, is located in Louisville at the Kentucky Fair and Expo Center there off of Waterson Expressway there.

 

[00:41:06.840] - Shelby Wade

Very easy access.

 

[00:41:07.880] - Caleb Sadler

Yes, very easy. Lots of parking. So make sure you get out and.

 

[00:41:10.960] - Joe Goggin

Visit and concerts most every night. And they're all free. Yeah.

 

[00:41:15.130] - Caleb Sadler

Awesome. Well, Joe, we really appreciate having you on to Beyond Agriculture. Maybe we look forward to having you back on at some point in time as we may put out another episode for the podcast. But to our listeners, we thank you for tuning in again and be sure to go out and like, subscribe and share our podcast.

 

[00:41:34.720]

This episode of Beyond Agriculture is brought to you by Central Kentucky Ag Credit.Thanks for listening to the podcast. Be sure to visit Agreditonline.com/BeyondAgriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you're you can join us next time for Beyond Agriculture.

 

 This week join Caleb, Tom Zack, Ben and Shelby and learn about how lines of credit can be used throughout the year. Hear Tom Zack's thoughts on rising input costs and how hay production has been effected by the weather. Caleb helps to explain when it is beneficial to have a line of credit and Ben updates everyone on how inflation and rising interest rates can effect the economy. 

View Transcript

Caleb Sadler (00:01)

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations, and events taking place in our community. Who we are and what we do is Beyond Agriculture. Hello and welcome in to Beyond Agriculture. Caleb Sadler back with you today. I'm also joined with Shelby Wade and Tom Zack Evans, and also the man behind the scenes, been Robin again with us back in our Paris branch today. It's good to have everyone here today. And good morning. How are y'all doing?

 

Shelby Wade (00:38)

Good. Caleb, how's it going with you?

 

Caleb Sadler (00:39)

Good, going excellent. Coming back off a good weekend. Busy weekend at that  Tom Zack, what did you all get into this weekend?

 

Tom Zack (00:48)

It has been busy. We attended the antique tractor show here in Bourbon County and Battle of Bluegrass Pool that Ag Credit was a sponsor of. And I think they had one of the biggest turnouts they've had in several years.

 

Caleb Sadler (01:01)

Yeah, I was out there on Saturday and we were talking there. My family, of course, we exhibited a couple of gas engines, and it was probably one of the biggest shows that we've had out there in a long time.

 

Shelby Wade (01:13)

And the weather was perfect.

 

Tom Zack (01:15)

Yeah, it was. It cooled off some. We just concluded Harrison County Fair last week. Had really good turnout for it from livestock shows, the tractor pull, we work the gate, Ag Credit. Did Thursday night had, I guess, one of the biggest nights of the fair. My gosh, that was really good. And the other thing that can't go without mentioning is the rain we've gotten. I think all of central Kentucky was desperately needing the rain. And now I think I got a little mud on my feet yesterday.

 

Caleb Sadler (01:51)

It feels good. Finally, I was actually talking we went and ate dinner last night in Lexington, and I was talking to a borrower that ran into at the restaurant, and he was talking about his tobacco, and he said they were getting ready to start topping, but they're actually going to start with the latest tobacco they set. And then the earliest is actually looks like it's stunned a little bit from being so dry early on, so man, it's been tough.

 

Tom Zack (02:13)

Yeah, the rain has really been a blessing.

 

Caleb Sadler (02:15)

Ben, what's new with you? It's been a while since you've been on and anything exciting on your end?

 

Ben Robin (02:21)

Yeah, that's been a while. I haven't got to join you all lately. Now we're busy on the farm and taking a few trips, trying to get the girls out and about before they start school, before we get back in the groove of that. So had a pretty good conference this weekend with Farm Bureau Generation Bridge and so just watching it rain.

 

Caleb Sadler (02:44)

Yeah, well, I know what you're meaning on that one. Now, you all were recently in DC. That was a pretty neat trip, wasn't it?

 

Ben Robin (02:50)

Yeah, that was kind of one of the spontaneous trips we took that we didn't really have planned, and it was fun. First time the girls had ever been to DC. First time they'd been on a plane. So we drove out there with one of my wife's friends and flew them back. So it was awesome. Fun trip. Yeah, we really enjoyed it. Really hot out there. Gosh, it was hot.

 

Caleb Sadler (03:08)

We were talking there earlier before we got started recording, and I remember going one time this has been a few years ago, actually, I think it was '18 when I moved to the Paris branch, and we went to the Cherry Blossom Festival. And my gosh, the amount of people is unbelievable. Anytime you're really in DC, it's that way.

 

Shelby Wade (03:31)

I've never been. I'm looking forward to going, but I just haven't been yet. Maybe next time i'll hop on with Ben, we'll go. Yeah, you and the girls. I'll experience it, too.

 

Ben Robin (03:38)

They want to go back. They enjoyed it. They, of course, wanted to see the White House, so we did all that, and it was really fun.

 

Caleb Sadler (03:45)

Now, did you all get to go inside, like tour inside the White House?

 

Ben Robin (03:48)

No, I guess the president had Covid. They didn't have any tours, but you can actually get a lot closer. Last time we were there, you couldn't get close to the they had, like, a barricade up before you can get to the fence, so you could actually go right to the fence.

 

Caleb Sadler (04:06)

When I went time before last, that was one of the tours that we went on. We actually got to go through the White House, so it was really cool.

 

Ben Robin (04:14)

Yeah, no, we didn't get to go in, but we got to see it. It was a fun time.

 

Caleb Sadler (04:17)

Well, back on topic here, just kind of telling you a little bit about what's going on in our lives and what we've been going through the past couple of weeks here, but one thing that we wanted to get in touch on here a line of credit and what it is and truly what it can do to help your operation. So, Tom Zack, tell us a little bit about what technically a line of credit is.

 

Tom Zack (04:39)

Well, we offer some different types of lines of credit here at Central Kentucky Ag Credit, and they offer another tool in your toolbox for cash flow purposes throughout your cattle cycle, your crop year, whatever your operation is, they are another tool there to help you manage risk and also manage the cash flow. And so the most popular would be the crop operating line of credit. So whether your tobacco, corn, beans, wheat, whatever crop you're raising hay sometimes in the spring, you're putting a lot of inputs in. And like this year, things were extremely high, the highest we've ever paid in our life.

 

Caleb Sadler (05:29)

Prime example of that, we've had numerous people come back in and needed to increase their line of credit because they got a fertilizer bill that they were not prepared to see. And I know we've done several that way here across the association and in this branch as well.

 

Tom Zack (05:44)

Yeah. So you're hit with a lot of cost in the spring and sometimes your checkbook just can't handle all that. Another thing is sometimes you could go ahead and lock in some prices earlier if you have the cash flow to do that and lock in a better price than what you would be paying maybe later on for these inputs. So you have the cash there to go ahead and do that. So the crop operating line is one of the most popular. Caleb, I know you deal with a lot of the feeder lines of credit if you want to talk about those.

 

Caleb Sadler (06:24)

Yeah, so the feeder cattle lines of credit, they were very similar, I guess you could say, into a crop line of credit. But they're on a twelve month cycle generally is how we set those up on. And what those lines of credit are used for are to purchase those livestock. If you're turning stocker cattle or feeder cattle out on an annual basis, you'll buy, fund those cattle, the purchases of those cattle off the line of credit. You may have some expenses associated with those cattle in terms of vet, hay, mineral, things like that through the course of the twelve months. And then once you sell those cattle, you would turn that money back to that line of credit. And as long as that line of credit is revolved or the largest principal balance you've had on that line has been turned to the past twelve months, we're good to revolve that line and turn that back over for another year and renew that. I know that there are some unique tools that we have in the toolbox in terms of for young, beginning, smaller farmers. Regarding FSA guarantee lines of credit, tell us a little bit why it's different between those and just a standard in house line of credit.

 

Tom Zack (07:24)

That's right, Caleb. So we offer lines of credit from one to five years. Sometimes the beginning person coming in might just be twelve months and as long as they cycle that line properly, then we can do three years the next time. Sometimes because of the size of the accounts, they're still just twelve months. But on our FSA guaranteed lines of credit, the way those guarantees work, we're able to go out five years on those lines of credit. So that's pretty nice, you're not having to touch those. But those do come with some extra criteria that we have to follow throughout the year per FSA. I was also going to mention that a line of credit for someone's not familiar, it's kind of like a credit card, but it's a lot lower interest rate. Typically ours follow prime. So if prime goes up. Which we've been experiencing. Federal Reserve has been raising rates and so anybody with a line of credit will get notification that that rate has gone up. But it is like a credit card where you would use it to help with those cash flow purposes and then pay it back when you sell your crops.

 

Tom Zack (08:37)

When you sell your cattle. That sort of thing.

 

Caleb Sadler (08:40)

So, Tom Zack, I know that you brought up a really good point, and I'm going to get off topic a little bit here and maybe dig into the weeds a little bit, but you referenced there that our lines

 

Caleb Sadler (08:50)

 of credit are tied to prime, and you said that the Fed sets that rate. And just recently, I know that the Fed raised interest rates. Ben, tell us a little bit about why the Fed has been raising these interest rates of recent and the last jump that they just did last week.

 

Ben Robin (09:08)

Yeah. So you kind of discuss a little bit of how the rates are set at the Federal Reserve level. But really the main purpose of raising rates is to slow down the economy. When there's money moving through the cycles, real estate is in demand. It's cheaper to borrow money. So there's a lot of movement in the markets. Well, the Fed controlling interest rates. They have the barometer of how the economy is going. And if things need to slow down, they raise rates, try to pull the reins back a little bit. That's the easiest explanation.

 

Caleb Sadler (09:47)

Yeah.

 

Tom Zack (09:47)

I would say this inflation is the highest it's been in our lifetimes. I'm sitting here as a 37 year old, and inflation has never been this high. And as they raise rates, then less people can afford to buy stuff. So it's going to slow the economy down. And I think they're trying to target in that 2% to 3% inflation rate and where it's over 9%.

 

Caleb Sadler (10:11)

The last article that I read, the inflation rate was 9.7% and no real signs of slowing down right now.

 

Tom Zack (10:18)

And they're trying really hard to raise these rates cautiously to slow the economy down, but not send us into a recession. Some would argue that we're already in a recession, but the Federal Reserve is trying not to send us into a deep, long recession like we've experienced in the past.

 

Caleb Sadler (10:36)

So we'll get back on topic. Thank you both for answering that for me there and pitching in some Shelby, what should a farmer look to have in preparation to come in to get a line of credit?

 

Shelby Wade (10:50)

Yeah, great question, Caleb. And we get this question a lot. So it's basically going to be if you've never had a line of credit or any other loans with us, bringing the same things that you would just get in a tractor or a landloan. So have on hand recent tax returns. We typically ask for the last three years and then an updated balance sheet. And that updated balance sheet is going to have all the things that you own, all your assets, all your equipment. If you've currently got crops in what you've gotten growing crops, things like that. So have all that ready, bring that to us and then we will kind of simulate from there how big a line you need versus what you think you need. And we want to make sure you have enough but also not go too crazy to kind of get you in a little bit of trouble and make sure it fits your production history. Now, if you're a new farmer, obviously you might not have those historical tax returns, these things that we would need to kind of establish what you've done in the past. We're going to look at what your goals are, how many acres of corn you're looking to grow, how many head of cattle, whatever.

 

Shelby Wade (11:55)

Kind of look at your goals and go from there. Based on current market like you mentioned, feed rates, fertilizer, what it is. So those are kind of the types of things we look at to establish the right line for you.

 

Tom Zack (12:09)

I'll just add to that that if you're a beginning farmer starting out, a lot of times cash is tight because you're trying to get your operation established. So the beginning farmers typically need those lines of credit. Also, the larger operations need the lines of credit. Me personally, I'm not afraid to admit that I'm not a large operation. We're just square baled hay and some cattle, not a huge operation. When I was a beginning farmer, I did have a line of credit because I was raising tobacco and just strictly for cash flow purposes. But now, just with the hay operation I don't have a line of credit anymore. But someone with a larger operation probably would because they got a lot more expenses going out. Also, folks with feeder livestock, a lot of times they have lines of credit because they're purchasing large amounts of cattle and then of course when they sell those cattle, they can pay that back.

 

Caleb Sadler (13:19)

I know we've talked a little bit about it the term wise and we've talked a lot about revolving lines of credit. But there are multiple kinds of lines of credit that Central Kentucky Ag Credit offers, whether that be if you were looking on a construction loan or if you were building a project on the farm. So we offer both revolving line of credit as well as a non revolving line of credit. Shelby, tell us a little bit about the non revolving line of credit and what those we tend to set those up for.

 

Shelby Wade (13:50)

Yeah, that's a good point, Caleb. The nonrevolving lines of credit are also very useful. A lot of times we set those up for, like you mentioned, construction type deals or farm improvement loans. So basically we'll set it up for you. You can take the funds out as you need and then at the end we'll term it out on a certain term depending on what the loan looks like. And we also do that too with breeder cattle we'll do a certain amount of time, usually three to six months depending on how many head you're looking to purchase. So that way you don't have to purchase them all in one place. You can shop around and get the best deal. And then once you get them bought, we'll term out the amount of funds you spend. If you don't use it all, that's great. We'll only term out what you've spent on those catalog or the project.

 

Tom Zack (14:34)

I'll give you a couple of examples on that just for folks listening that maybe haven't done that before. I've got a gentleman right now, he's building a farm shop and of course supplies are hard to come by and so we actually gave him twelve months to do it. And so he's pulling out money as he poured the concrete, as he got it framed, he's going to insulate the inside and put some heat in it and all that. So as he's building that as a non-revolving line because he's just pulling the money out. And then once it's done, then we'll put it out on terms where he can make monthly or annual payments on that. Another one I did recently was just a farm improvement loan. They were doing some dozing and fencing on the farm and so they were having to wait on the dozer guy to get there and then they were having to wait on the fence builder to get there. So instead of paying interest on that money the whole time, you only pay interest as you pull it out. That's people's number one question generally is do I have to pay interest on this the whole time?

 

Tom Zack (15:42)

No, it's just when you pull the money out.

 

Caleb Sadler (15:45)

Yeah.

 

Caleb Sadler (15:45)

And the nice part about the line of credit feature is if you don't know the amount that you're going to need, we are always able to set up a larger amount just out of abundance of caution for you and then turn around and you term out whatever you use. We're not going to term out the full amount, it's just based on the funds that you use at that time. So one thing that we've got a little spreadsheet here that we're going by today a little bit, but one topic that I see on the sheet is renewal season. And this is something that's kind of evolved over the course of time as production has changed in central Kentucky. But when we were predominantly tobacco producers back in the would have said that there was a set renewal season of probably coming up in the spring. Now when you start to look at our portfolio, really the renewal season is all twelve months of the year because everybody's operation is totally different now. It's not just heavily dependent on tobacco or row crop production. A lot of these cattle guys, there's a couple of lines of credit right now that we're working on renewals for stocker and background guys.

 

Caleb Sadler (16:49)

So I would just say that right now the renewal season is basically twelve months out of the year. Now obviously that we're hit with that more heavily in the spring. For those guys that have different aspects of the operation, whether it be cattle, grain, corn, soybeans, or tobacco, those are probably still on that spring renewal schedule, just like normal.

 

Shelby Wade (17:16)

And renewing your line of credit just for those who aren't fully aware of what the process is. Is basically if we've got you set up for a year. Twelve months. Come back to us with your production history. All you've spent. What you've grown. Things of that nature. And if the line worked for you. That was a good amount. We'll renew it for another year or we can take it on out. Or if you don't want the line of credit anymore, we can cancel it. It's not something you have to do. And if there's an issue getting repayment back on the line, we can term it out and put it on terms if need be. But that's kind of a little bit of example of what we mean by renewal.

 

Tom Zack (17:56)

One of the biggest things that we look for is that the line of credit has been turned. That's what we always ask. We look back on the transaction history to make sure that you didn't just take all the money out and it's just kind of sitting there as we would call stale. We like to see that money cycled as you sell your crops, as you sell your cattle, cycle that money back through. That's also cutting down on the amount of interest you pay because it's back on the line. Then when you have more expenses come up, you would pull that money back out.

 

Caleb Sadler (18:30)

So as we're talking about it here, one of the tools that we look at, and Shelby brought this up earlier with requiring three years of tax returns and for the application process. But that's actually one of the tools that we look at when we try to establish and set up a line of credit when you look at the tax returns and the first place we go to is that Schedule F. And if we're looking about setting you up a line of credit. We don't want to set you up a line of credit that's bigger than your operation because that tells us right there that you're not going to turn enough money through the line of credit and there's going to be some stale funds that would establish do that. So that's one of the first places that we go to is the Schedule F on the tax returns and looking at that gross farm income that you have to make sure that we're going to set a lot of credit up that adequately funds your operation. Not too big, but not too small either.

 

Ben Robin (19:20)

You talked a little bit about that there, but you got young beginning farmers. What if they don't have the tax returns, what do you do then?

 

Tom Zack (19:27)

Yeah, well, in that place, Ben, we rely heavily on projections for that kind of stuff and we use the UK, University of Kentucky, Ag econ budgets a lot and we can tailor those to your operation. So don't think that just because the university says this much mineral or this much hay, we tailor that to your operation and what you think you're going to realistically use, but we can use those projections, say, okay, we think based on this, that you're going to gross 80,000 off the farm and you're going to have 60,000 in expenses to gross at $80,000. So that's a big tool in our toolbox to help with beginning farmers that may not know what they're going to need.

 

Caleb Sadler (20:16)

And you brought up a really good point and this kind of goes back to the young beginning farmer side of things too. But I would encourage those people, if you're starting out farming right now or you're a young beginning farmer, go out and look at those budgets that UK has to offer because those are a great place to get started with knowing how much you're going to need and how much return you're expected to have.

 

Ben Robin (20:38)

That's what I was going to say, just to see if it is going to be profitable, given the current Ag landscape in the market.

 

Caleb Sadler (20:44)

And I tell you right now, if you look at the way commodity prices have been the past three weeks, we're knocking on the door of some producers. If they didn't lock in some prices, these fertilizer prices that they put this stuff on with, it could be getting really close to a break even right now.

 

Tom Zack (21:00)

That's right. I was on an adm call, they have a conference call once a month I call into, and that was last week. And a lot of these fertilizer prices, whether it's Urea or Murate, are getting down in that 700 range, depending on your supplier. I think in Cynthia's it was 740 a few weeks ago when I checked. And based on that ADM call and these world economists that are on there, that's probably about as good as we are going to see on prices and that's going to carry on through the fall. If you're an operator that thinks you can lock in a margin for next year with those kinds of prices, then you ought to probably look about doing that. They said obviously, that as we go into winter, fertilizer will follow those natural gas prices pretty heavily. So look for fertilized prices to come back up as we go into winter.

 

Caleb Sadler (21:58)

That gives you some good insight going forward next year, looking at 2023 growing. So make note of that. Go ahead and try to lock in some fertilizer prices right now. So, Shelby, I know that you offer a different aspect because you all do finish out some pigs and things like that. What are commodity prices like right now on that end of it?

 

Shelby Wade (22:17)

Well, as you mentioned, our biggest input is going to be feed, soybean meal particularly, and of course, corn. We don't grow any of our own crops. We purchase from local farmers, which one was 7.50 cash. That's what I had to pay for it and did enjoy it, but that is what it is. But like you mentioned, the price for corn going into fall specifically is going down continuously, which is for my side of things. I like to see kind of being a little selfish because the cheaper I can get corn, the more margin I have on my animals. So I'm looking forward to kind of getting a little bit cheaper according to the fall. But like you said, the other livestock prices in general are pretty strong. I don't sell any of my animals to the market, but I know, for instance, hogs this summer have been over $1.10-$1.15 market, which is, I shouldn't say abnormal, we've seen that before, but that's a very strong hog market here.

 

Caleb Sadler (23:23)

I remember when it was $0.25 there.It wasn't that long ago.

 

Tom Zack (23:27)

Yeah, speaking of that, we sold some pound cows off the farm just a few weeks ago and a $1.05, and I don't remember ever selling these were 1500- 1600lb pound cows that sold amazing. So there's really strong demand for that stuff right now.

 

Caleb Sadler (23:46)

So getting back on topic, talking about lines of credit and things like that, and Tom Zack, and Shelby I will let both of you all answer this question, but what do we look for at Ag Credit in terms of collateral position to secure those lines of credit? Whether that be equipment, cattle, or real estate.

 

Shelby Wade (24:04)

Any and all, we'll take it all. It all depends on the person and what they have to offer. For instance, if we've got your mortgage loan with us, we've got your farm, and we have an open end in there, we can use that to secure your line of credit. Most usually I'll say, though, the lines of credit are secured with the crop that is being raised and or if it's cattle the cattle that are being purchased and whatnot and also equipment. So basically we'll look at your asset list on your balance sheet and see what we have on there and what we can use to best meet our, of course, credit standards and what's going to work for you.

 

Tom Zack (24:42)

One of the first things that I look for is to find collateral that's obviously free and clear. So you might have some equipment loans with another lender or whatever, and they have all your farm equipment taken. So we would say, okay, your cattle are free and clear in that case. So that's the first thing I look for is something that's free and clear. And then obviously we need to have enough collateral to cover the line of credit. And sometimes that's an accumulation of cattle equipment. And if it's a really large line of credit, then we would take real estate in that case. So it's just kind of tailored to meet your needs and your operation. And that's what we're here for as loan officers at Ag Credit, is to help tailor this loan, the time of year, the amount of the loan, the type of collateral, all that to your operation.

 

Caleb Sadler (25:41)

And what I was just going to say, I was going to feed off of that a little bit, too, because that's one area I think that we look at a lot. If you didn't have the collateral or to secure a line of credit, that's where we typically bring in the Farm Service Agency with an FSA guaranteed line of credit that allows us to extend our underwriting standards to where we can make a credit that we typically wouldn't be able to make. And nine times out of ten, if we're making an FSA guarantee line of credit is because the collateral, there's just not enough collateral to secure the loan to keep the loan in house. So just as we're wrapping up here today Tom Zack, I know that you do a lot in the hay side of things and tell us a little bit about how the weather has affected your operation this year.

 

Tom Zack (26:28)

Yeah, so we had a really good first cutting that was back early in May. Off the top of my mind, it was around May 10 or May 15. The weather cooperated. We have a nice window there. The hay barns are full of roll balls that are good enough they could have been square baled. The quality was just phenomenal. And then we ended up getting a really good second cutting on our alfalfa fields. But it turned off dry. It turned off dry right after that kind of the middle of June, right after our second cutting of alfalfa, It turned off dry for a lot of central Kentucky. As I was driving around to some of our equipment dealers here, the southern part of our territory, Lincoln. Garrard down through there, were even drier than us. So we got really dry in June, really from the middle of June and the middle of July, we had guys irrigating tobacco and stuff and got really dry. So that kind of just got really hot and really dry for a month. And it kind of just shut things down. Other than the weeds, it seems like the weeds have just gone rampant.

 

Tom Zack (27:38)

And now here in late July, we've started getting rain. And like we said, we got a lot over the weekend. It was kind of muddy, so things have greened up and started to grow. We're hoping we got a third cutting that is ready on alfalfa. Now grass hay fields are a little different. That hot dry spill really shut those down, and we're hoping that over the next month or so, maybe those grass hay fields will kind of rebound.

 

Caleb Sadler (28:07)

Yeah, hopefully. We'll get into the fall here, we'll get some really nice weather and some good rain at some appropriate times and maybe we can get a good fall cut in the Hayden. How has the weather impacted your end of things, the cow side? Has it been more stress on the cow herd?

 

Ben Robin (28:24)

Yeah, I was just going to kind of chime in with Tom Zack. We're talking about operating lines credit and Tom Zack is obviously hay producer. What's the haysupply look like this year?

 

Tom Zack (28:37)

We still got some guys that are looking for hay, to be honest. I think like we said, we had a good first cutting. Now with that said, the quality of the first cutting was good, but as far as quantity, it was probably down a little bit from the past couple of years. And I think that's where some of our large beef cattle guys that run a lot of cattle are still looking for some hay then on the square bale end of things. We're doing good, but we definitely need a strong finish to the year. Hopefully these rains will get that for us and the hay supply will be okay, but yeah, I think your larger guys are still looking for some round bales.

 

Ben Robin (29:15)

That's why I was thinking too, with the way the drought has been and a lot of cows moving through the market out west, feed them some of that hay making its way out there already.

 

Caleb Sadler (29:26)

That's why I was just about to say there's a ton of cattle that are making their way from Texas up this direction and that drought down there. And it wouldn't surprise me if we don't see some hay that is going in the opposite direction going back down there.

 

Shelby Wade (29:41)

You've been talking about hay, but from a pasture side of things as well. I know that there's a few people that I've already heard of and talked to that have started lightly feeding bales and it's the end of July, so that's kind of scary to think about going into winter and fall. Hopefully these rains that we've got in the last couple of weeks really kind of help get us more grass coming in for pastures. But I'm kind of going to think that there's going to be a definite hay shortage going into fall, winter.

 

Caleb Sadler (30:09)

Yeah, I would have to agree with that. And not only the rain side of things, it's just been so hot that the grass is just not growing.

 

Tom Zack (30:15)

Those full season grasses just won't grow in this hot weather.

 

Caleb Sadler (30:18)

That's exactly right.

 

Ben Robin (30:20)

You're talking about that, asking how the cows are doing and everything. We've more intensely rotationally grazed this year and made the intention to split our fields up a little more and we've been able to rotate every couple of days and now we've got plenty of grass for the time of year, obviously theres been moisture, but that's made a huge impact on our operation, just being able to more intensively graze those fields and cows are good. They're slick and trying to keep flies off of them this time of year.

 

Shelby Wade (30:54)

Yeah, that's always difficult.

 

Caleb Sadler (30:57)

Yeah, we're getting ready to go into fall calving too. So that's a notorious time, I think, for bad face flies and everything like that. Well, as we're wrapping up today, I want to thank you all for joining in. Also, I would like to go ahead and extend some thoughts and prayers with our people in Eastern Kentucky. Those people were just hit with a real devastating flood. So our thoughts and prayers with them from Central Kentucky Ag Credit to those people there in Eastern Kentucky. Thank you all for tuning in and listening to Beyond Agriculture. And be sure to go out and like subscribe and share our podcast. Thank you.

 

Speaker 5 (31:42)

This episode of Beyond Agriculture is brought to you by Central Kentucky AG Credit. Thanks for listening to the podcast. Be sure to visit agreditonline.com Beyond Agriculture, access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

 

Listen to Lee as she discusses the inflation, supply vs demand and what advice she has for today's youth. Lee is the co-owner of Blandford Feed, CFO of Clements Ag Supply and a Director of the Ag Credit board.

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Speaker 5  (00:01)

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations and events taking place in our community. Who we are and what we do is beyond agriculture.

 

Patrick Durham  (00:21)

Welcome to Beyond Agriculture. My name is Patrick Durham. I'm here with John and Saravard from the Stanford office. We're here today with Lee Hood. First off, I'd like to start by just checking in and seeing anybody got any rain lately?

 

SaraVard Von Gruenigen (00:38)

We were talking about this before the podcast and I was nervous to say what kind of rain I've gotten because I don't want to hex on me.

 

Patrick Durham  (00:44)

Yeah. So I assume, John, you've had some rain yourself.

 

John Peek (00:49)

This is Lincoln County Fair week, so we're almost guaranteed rain during the fair. We've got a little rain at home this week, so it's been good.

 

SaraVard Von Gruenigen (00:56)

That's good. I hope everybody is getting some rain across the state and in our area. We're here today with Lee Hood, CFO. Clements AG Supply and owner of Blandford Feed in Springfield, Kentucky. Lee is also a Central Kentucky Ag Credit board of director. Afternoon, Lee. We're glad to have you here today. Lee, do you mind telling us a little bit about yourself?

 

Lee Hood (01:19)

Sure. Thank you, Patrick. I was born and raised in Springfield and had the fortune of growing up on a 2000 acre farm that my dad managed full time. We raised cattle, hay and row crops, and my brother and sister and I showed cattle through 4-H and FFA. I graduated from UK in 2004 with a bachelor's degree in accounting. Fast forward several years and now my fiance, JP Blandford and I together have six kids and one granddaughter. We own and lease a total of 650 acres where we run about 160 mama cows and background 300 feeders every summer. I started working for Clement's Ag Supply about 17 years ago. I love my job there because I get to do the accounting work that I enjoy while being a part of all of our customers farming operations. In 2021, Mr. Clements was gracious enough to let JP And I purchase a portion of Clemens AG Supply, which we now operate on our own as Blandford meals in conjunction with Clements Ag.

 

SaraVard Von Gruenigen (02:29)

And you all sell feed, seed and a little bit of everything like a regular farm supply store would, correct?

 

Lee Hood (02:35)

 . Between the two businesses, we could pretty much cover anything you need, anything for animals, crops.

 

SaraVard Von Gruenigen (02:41)

And both of you work there together and get along?

 

Lee Hood (02:44)

We do.

 

SaraVard Von Gruenigen (02:46)

Good.

 

Lee Hood (02:47)

We do.

 

SaraVard Von Gruenigen (02:47)

Yeah.

 

Lee Hood (02:48)

We work together during the day and.

 

SaraVard Von Gruenigen (02:49)

At home, both of you, for a long time through my time with the Springfield stockyards and great people and they do a great job there.

 

Lee Hood (02:58)

Thank you, Patrick.

 

SaraVard Von Gruenigen (02:59)

Lee, can you tell us more about Blanford Feed for us folks that are in the Springfield region? Tell us about what supplies and offers and the products that you all have.

 

Lee Hood (03:10)

Sure. So we bought out the portion of Clements AG supply. That pretty much anything that would deal with taking care of an animal. So we sell a lot of bulk feed bag feed, fence, other farm supplies. We have the gooseneck trailer part of the business. Mineral for, cattle, sheep, goats, everything. Pretty much anything that your animals may need, we would have that for you.

 

SaraVard Von Gruenigen (03:37)

What do you think is your most peculiar or different farmer that you have encountered in your feed business?

 

Lee Hood (03:44)

We're seeing a lot more sheep in our mix. It used to be pretty much everybody had cattle and that was it. But now we're seeing a lot more sheep. We haul a sheep feed from Campbellsville all the way to Shelbyville.

 

SaraVard Von Gruenigen (03:58)

I've noticed that even with our customer base, it's not like a predominant part of their livelihood. But I've seen a lot of my cattle farmers like oh, yeah, I got about 40 of them. Hair sheep. They call them Hair sheep?

 

Lee Hood (04:09)

Yes.

 

SaraVard Von Gruenigen (04:10)

I don't how you pronounce katan. Is that catan?

 

Lee Hood (04:13)

I'm not sure.

 

SaraVard Von Gruenigen (04:14)

Yeah. But yeah, it's pretty common in our area, too. It's getting to be more prevalent.

 

Lee Hood (04:18)

Right.

 

John Peek (04:19)

Well, I'm just really interested, Lee. I met you a few times, but I don't really know you that well, so I'm excited to hear. So you grew up in Springfield? In Lincoln County. I didn't realize that. That bigger farm and operations. Really? Where I'm at over in Lincoln County, mostly smaller type operations, but that's pretty big. What would you say that's done for you? I mean, give you different perspective than some people around here?

 

Lee Hood (04:49)

I think it's given me a broad perspective. I felt like I was lucky that I was exposed to cattle and row crop. The owner also had horses, so I was around that a little bit. I got to run all different kinds of equipment. Rolling hay, running combine. So I felt like it gave me a pretty broad experience.

 

John Peek (05:11)

Absolutely.

 

Lee Hood (05:12)

Rather than just a small farm.

 

 (05:13)

Yeah.

 

Patrick Durham  (05:14)

At one point, I can't remember how long ago it was, he even had a horse that ran into Derby. Correct?

 

Lee Hood (05:20)

He did, yeah. I forget the year, too. It was probably maybe ten or 15 years ago.

 

Patrick Durham  (05:26)

But yes, remember the whole town really got behind it.

 

Lee Hood (05:30)

Yes. The horse's name was actually Where is Springfield? Because so many people have not heard of the small town in Springfield.

 

Patrick Durham  (05:39)

Lee, just a few questions along the way. Your position and the things that you've done in your career with agriculture. In the times that we're in with inflation, it's a common topic these days. It's kind of like covid and stuff. We kind of like to get away from it, but it seems to be here and having to deal with it. From your position, what do you see as being some of the key problems causing increased input costs today? With the inflation and stuff that we're.

 

Lee Hood (06:07)

Seeing, I think a lot of it simply boils down to supply and demand at a recent meeting we heard an economist speak on that very topic in the current conditions in the world and when he explained this to me, it kind of all made sense. He said that prior to the pandemic, most people spent about 70% of their disposable income on services and 30% on goods. Then during the pandemic there were all these non essential business shutdowns which were a lot of the service oriented businesses. So people kind of reverse that and they spent 30% on services and 70% on goods. Then you add in the fact that they had extra money from government stimulus and things like that, that there were just so many goods being purchased so fast that inventories were depleted, then production facilities were slowing down because of social distancing and it's just created this huge backlog. And any time that happens when supplies are low and demand is high, then the only way to correct that is prices to go up.

 

SaraVard Von Gruenigen (07:18)

I know when I was in college I didn't like my economics class too much, just wasn't my thing. But I remember I had an economic teacher and he always talked about the law of supply and demand and he would draw these graphs and he would say, one's gun and one is butter. Every time I hear people talk about supply and demand, I think guns and butter.

 

Patrick Durham  (07:44)

What's some of the ways in the Ag business that you've seen through your all store that people are dealing with that cutbacks or are they paying more attention to other inputs or what are some of those trends that you're seeing?

 

Lee Hood (08:00)

Definitely people are cutting back but not completely cutting things out, which is good. A lot of people are being just more mindful of each of those inputs. We found that a lot of people soil tested this year that maybe normally wouldn't have just to give them that extra information and know what they're purchasing is going to do them some good. And even if they didn't, they would ask the question, what does my hay field really need? Rather than just well, this is what I do every year, you know that people were thinking and asking questions and market prices have increased, which helps. But I think still just being mindful of each of those inputs and learning what input gives you the greatest return is probably the best solution.

 

John Peek (08:49)

I think going back to the supply and demand thing and we've seen it in every facete, toilet paper I think was the big thing. But people going out and stocking facetup on stuff and that's no different in agricultural supplies and the supply and demand, the supply chain was stressed anyway. But when you go and people are stocking up on that stuff and it causes huge demand and then a big price swing because people can get what they want to out of it, it really puts a strain on the economy and causes these price swings and it's increased prices. It's not just a swing, it's a swing up. And it's probably never going to swing back to where it was before.

 

SaraVard Von Gruenigen (09:29)

I think that's the worst part. Whenever we see input prices increase, the farmer's fears always, I don't think this is ever going to go back the way it was.

 

Lee Hood (09:38)

Right.

 

SaraVard Von Gruenigen (09:38)

And when are my prices that I get when I sell my goods, when is that going to go up to meet that? Remember when we had the big cattle price increase back when was that, '14 somewhere? I remember that was the big thing. It was like, finally we're getting caught up. But then it seemed like all the.

 

Lee Hood (09:58)

It wasn't very long.

 

Patrick Durham  (10:00)

Yes, that's a good lead in. Lee, in your position, say you did have the magic mirror to look into. Where do you see prices going from here? And what do you think the next couple of year outlook is as far as prices and inputs and stuff?

 

Lee Hood (10:19)

Well, I certainly wish that they would just drop as fast as they came up, but unfortunately I don't think that will happen. From what we're seeing right now, things are leveling off. So that is some relief. I think that will give a chance for some supply chains to catch back up. I know that for example, we're a Gooseneck dealer and we have some trailers on order, but if I ordered a brand new one today, it's at least a year before I can get it. So if you think about that, it not only stinks that you can't get what you want in a timely manner, but they've already got that price set for the next year and they already have those supplies bought for the next year at this current price. So it's not going to go down right away, but hopefully in time it will. We have been through periods where maybe fertilizer wasn't as high as it was this year, but I remember one year there was a big spike and everybody got scared. But in a couple of years it did come back down to a more reasonable thing. So I think we're just kind of in a cycle right now and hopefully within a year or two things will start to normalize somewhat.

 

Patrick Durham  (11:35)

I hope so. We've got several years ahead of us that it's going to be some trying times in the Ag business, and I think so too. And hopefully one thing comes out of this. People will start paying a little bit more attention to their inputs and different things and do a little bit better job of managing. That's something definitely we see from our end, for sure, from the lending side. Lee, you've been successful as a business owner. What would be a good piece of advice you give to young people starting to get into the agricultural field?

 

Lee Hood (12:14)

I would say to expose yourself to as many things, agriculture as possible. It's always amazed me how every part of agriculture every subsection of agriculture intersects together. So no matter where you work, just work anywhere, whether it's a farm, a greenhouse, a farm supply store like ours, the stockyards, anywhere, you're going to be exposed to ag in some degree. And then what you learn there will build onto something else. And then later when you kind of get to the agriculture field that you want to I feel like with anybody in agriculture, when they're hiring someone, they want to know what your ag background is, and they want to know that you can connect to that ag job that you're going to be doing. So any of those previous jobs you did in agriculture are going to help you somewhere. You will learn something from them and use them and whatever you're going to do.

 

SaraVard Von Gruenigen (13:19)

I'm a testament to what you're talking about because my family has a farm. My family is generational farmers, but due to family circumstances, I didn't really have much farm background as a kid growing up, like most farm kids have. But whenever I wanted to get in farming and so I did just what you said. I got involved in agriculture through my husband. I helped him with his stuff, and then I got jobs in agriculture. I did co-op type jobs during college. And even though I didn't grow up farming, now I've got the knowledge to come to an employer, like you said, and be able to give what I know.

 

Lee Hood (13:56)

Right? Yeah. You saw the exposure.

 

SaraVard Von Gruenigen (13:58)

Exactly. And it's amazing. The stuff that I learned just through I worked with the Kentucky Beef Council, and the stuff that I learned through that program was just amazing. And of course, the hands on experience on the farm too, that later on got right.

 

Lee Hood (14:11)

Even my hands on experience growing up on the farm was great. But then when I came to work at Clements Ag Supply, I learned so much more from a different perspective. Yes. So to expose yourself to as many things as you can, I think is the key.

 

SaraVard Von Gruenigen (14:26)

Good advice, I think.

 

John Peek (14:27)

And I just like to add that too. I just came back from a vacation trip out west and even expose yourself to different areas.

 

Lee Hood (14:36)

Sure.

 

John Peek (14:36)

Because I saw so much stuff out there that we just don't deal with here. There are advantages out there. There are advantages here. Every place has its own issues that they deal with. And it was really eye opening to me to be out there and see how they did things versus how we do things. It's just a vast agricultural community in the nation and how that all goes together. I don't think we can ever stop learning. So I think that's great.

 

SaraVard Von Gruenigen (15:04)

We just got John back at the Stanford office and we've been dogging him about questions. So can you explain a little bit more about where you all visited while you were out west?

 

John Peek (15:13)

So we actually flew into Denver and then we made a big circle. We went southwest and into Utah and up through Salt Lake and over to Yellowstone and then back east. We went up into Montana and back down to Denver. But the agriculture out there, there's a lot more challenges, a lot drier out there, so there's a lot of irrigation. I don't see any irrigation around here. That was fascinating to me. I was visiting with a friend out there and he was telling me about the water rights out there and how that all works. Of course, I'm a cattle farmer, so then I got to go out and look at cattle with him. And it was 96 deg out there, and I wasn't sweating and the cattle were happy and they weren't standing in a pond and they weren't panting and there weren't flies all over them. There weren't tree in sight, but they were really happy. And my cows at home at 85, they're looking for shader standing upon, and I don't think we realize what fescue does to our cattle, and that's something they don't deal with out there. So it was just very eye opening to me, the differences and the different challenges people have.

 

John Peek (16:26)

And I'd say I probably wouldn't want to go out there in the wintertime and spend much time with him. That'd probably be a big challenge for them out there.

 

Patrick Durham  (16:34)

Along with that. Lee your brother lives in Iowa. What's some of the challenges I'm sure you all talk quite often what's some of the challenges he sees there versus what he's used to here in Kentucky, right?

 

Lee Hood (16:47)

Yeah, that's right. Patrick he moved to Iowa to farm about four years ago, so he spent 30 years farming in Kentucky and then had to learn how to farm in Iowa. One of his biggest challenges is the winter, and he is not at all happy about that because they have snow from, I think from October through March or even April. So he's also a cattle farmer, so dealing with that in that kind of weather is certainly a challenge for him. But then in some ways, he has the hot summers like Kentucky, too, but they have a lot more row crop ground, so they will graze corn stocks in the winter after harvest, and they kind of have more capacity to do some cover crops than even they graze. It's just unique.

 

SaraVard Von Gruenigen (17:35)

You are talking about those Midwest winters. It made me think about a story that one of my college professors told me. He was from the Dakotas and he had a real dry sense of humor, and he would say, talk about the snow that they got and all this kind of stuff. And he said, well, basically, you just go out to the barn, you tie rope to yourself and wade out in the snow, and if the rope quit jingling, you better get the pulling. I remember we always had the funniest stories from them about their winters out there.

 

Patrick Durham  (18:01)

And I think, too, with your story, John, traveling out west and telling about your brother's experiences in Iowa. I think it's a big plus for young people, whether they attend college, trade school or anything. Don't close your mind to just an idea. Open your mind up and do different experiences, and later on you can tie those experiences all together into a career path. Experience everything you can learn what you can, and then put a plan together. Because my career path has been a little bit everywhere eventually. I've always been around agriculture, though, so that's the one thing that kept me on the forward path. Lee being the CFO with Clements Ag Supply, you obviously have an extensive finance background in agriculture. What's some of the ways you see the farmers being able to utilize what Ag Credit has to offer to help them through the ever increasing rise in operational cost inputs and the market volatility that we're dealing with in today's times.

 

Lee Hood (19:13)

I think that probably the thing that will help anyone the most through these challenging times is to be financially strong. And that's not something that happens overnight. It takes a while to develop that and to get to that point. So I would first advise people to listen to their loan officer, to listen to you guys, because not only do you have ag backgrounds and you farm too, but you're in the finance industry. So as a borrower, as a farmer, if you would engage your loan officer, talk to them, share ideas, share your plans and your thoughts, then together the two of you can make the right decisions for your operation to help you become more financially stable. And that will help you whether any storm, whether it's market volatilities or droughts or anything. The other part to that, I think, is good record keeping. With my accounting degree, I feel like I keep records on everything and I write everything down. But we were talking about inputs and learning what input is the most valuable, what gives you the most bang for your buck. The only way you can really know that is if you keep records every year.

 

Lee Hood (20:32)

And then you can see when you make those changes, what effects they have, whether it's increased yields or increased calving rates, conception rates, things like that. That's the only way you can truly know what's working for you, is if you have good records.

 

John Peek (20:48)

Right? I'd just like to add to what you said there. I really wish people would spend more time with us, talking to us about what they're thinking about and what they're planning to do at Ag Credit or any lending institution. We're in the business of making loans, so the fact that you come in there and pitch us an idea and we say no to it, the reason why we would say no would be because we think it's too risky. Sometimes people come in and they don't know whether an idea is a good idea or not. And that's good to come and run it by us. But if we say no to that, we're not saying no to you as a person. We're not saying we don't want a relationship with you. We're not saying we won't lend you money in the future. We're just saying right now we think that's probably not the best move. At the end of the day, it's not our operation, but we want to be a partner with borrowers. I just think people sometimes take it hard if we don't go along with an idea they've got. But it's not necessarily that we think it's a bad idea, but it may not be right for you right now.

 

Lee Hood (21:51)

Right.

 

John Peek (21:51)

And if you'll talk to us more about it and we can analyze it and look at it any which way you want to, maybe it's something that we can work into in the future. You just have to take a little time. But I appreciate you saying that.

 

Lee Hood (22:05)

Thank you.

 

SaraVard Von Gruenigen (22:05)

I also want to kind of go over when you were talking about record keeping. A lot of farmers, that tends to be not their strong point. One, they want to be out there doing things. And then also, two, farmers have a strong conflict with Uncle Sam. It's kind of a battle that we often see where they don't have records, but what we have our tax returns. And so then we're battling the tax repair versus what we need to do. And so I agree with you wholeheartedly. When I have a borrower come in with good records, it's just like a breath of fresh air, and it helps them get accomplished what they need to accomplish. Because your operation may be meeting these certain goals, but those tax records that were handed to your taxpayer in a shoe box that they had to muddle through may not represent that. And so it's very important. So I'm glad you mentioned that.

 

Lee Hood (22:58)

Oh, thank you. And that kind of goes along with it's a whole picture thing, I think, because just like, if they had the good records, then when they pitched the idea, like John was talking about, yes, it can help you put all of it together and piece by piece get to where they want to go.

 

John Peek (23:14)

That's right.

 

Patrick Durham  (23:15)

And I've often heard the added tools and the tool belt. And John, you brought up a good point with the relationship. We are a relationship lender. Farmers look at us need to look at us more as a tool in their tool belt. We have lots of tools, Lee. You have lots of tools. You're professional in your field. We're professionals in our field. So it's a joint effort if you come in to us to see us, ask questions. We're here to work with you, build that relationship and help everybody out. That way we can build a lifetime of relationships there and do future business together and everybody be successful. Lee, being one of the younger members of the Ag Credit Board, how do you see the future of agriculture changing and how do you see Ag Credit changing with it?

 

Lee Hood (24:14)

Patrick that's a good question, and I think it really ties into what we were just talking about. And even though we've talked a lot about cost and inflation and economics and everything going on today, it's all very important. But that's not everything. A lot of farmers today are young. Maybe they're just starting out. They have families. A lot of them have full time jobs in addition to their farming operations. So their lives are hectic with those jobs with kids sports, kids FFA activities. So I think that they are looking for more than just a loan with a good interest rate. I think they are looking for someone to help them out, someone to have that relationship with, who will provide them great service, who will help them with their operations and offer them the sound advice like we were just talking about. I think they're looking for more of a whole package, not just get a loan and be done. And I think that's what Ag Credit offers, that's what Ag Credit was built on. In addition to that, I think they're looking for conveniences with technology and things like that, which Ag Credit, is adding those things into the mix all the time.

 

Lee Hood (25:31)

So I think today's atmosphere, along with what Ag Credit has to offer is really just perfect for what the farmers are looking for.

 

SaraVard Von Gruenigen (25:40)

We actually just recently added for some loan products where we can find digitally now.

 

Lee Hood (25:45)

Yes, we've talked about that at the board meetings.

 

SaraVard Von Gruenigen (25:47)

It is amazing how much we have used that product, because, like you said, and just like my husband and myself, we farm pretty good size, but we also have these W-2 jobs where we have to be at work the same time. Ag Credit is open, so it's been super handy for those folks that are coming to work and they don't have to take a couple of hours off work for some loan products. We can now do that online and digitally. It's great.

 

John Peek (26:12)

That is good, and I'm really excited. Agriculture is challenging right now, but if you look back through the history of America and agriculture, good managers are successful. And I think that kind of goes back to what you were talking about, keeping good records. And I've always heard you can't manage what you don't measure, so you have to keep good records and you have to know whether you're making money. And like I said, we want to be a partner in that. But I'm excited because agriculture is challenging, but there are people out there doing very well, and will continue to do so. Yeah, I'm excited about what's coming up.

 

Patrick Durham  (26:51)

In closing, Lee, we've had obviously a lot of great conversation today and a lot of topics I think a lot of people will get a lot of useful information and a little inside look on what some of the things you do on a daily basis. In closing, what would be a good piece of advice that you could give any young farmer right now? What would that be?

 

Lee Hood (27:16)

Probably, first of all, work hard. Nothing worth having comes easy. And that's especially true of farming. And the hard work never goes away, as we all know. But second, find a mentor. Maybe it's a family member. If your dad farms, if your grandparents farm, maybe it's your loan officer, just like we were talking about having that relationship with them, or the person you buy your supplies from. I know a lot of people seek advice from JP and from Pat, depending on what they want to know about. But no matter what, there will always be challenges to farming, and there will always be something to learn, which we've mentioned, too. But having that person that you can trust, that you can confide in, that you know is an expert in their field, they can help you through those challenges and help you to learn. And that will make you more successful.

 

Patrick Durham  (28:14)

Absolutely. And that's one thing I think is very important for younger people and even older people like ourselves. We're never going to stop learning. We're always going to learn something different. And there's always going to be somebody that's experienced what you're trying to learn. So find those people, search them out and ask questions. There's never a dumb question, right? Maybe every once in a while. But reach out to those people. Ask the questions, like you said. Find somebody to be a mentor and pick their brain. In the long run, I think both of you will learn a lot. They can learn something from you as well. It goes both ways.

 

Lee Hood (28:58)

Yeah, that's what I was just thinking. Even as the mentor, once you reach the where you've experienced enough that you can mentor someone else, you still find that you learn from that other person.

 

Patrick Durham  (29:09)

And hard work, like you said, that's a big thing, raising two teenage boys. Sometimes I wonder if maybe that's lost, but you know youfive-acre need a five-acre tobacco patch or something to let them experience what hard work really is. But I'm not sure dad wants to go back down that route. But Lee, thank you for being here with us today. We appreciate you taking the time out of your busy schedule and being here with us, and look forward to visiting with you down the road.

 

Speaker 5 (29:47)

This episode of Beyond Agriculture is brought to you by Central Kentucky Aggregate. Thanks for listening to the podcast. Be sure to visit Agreditonline Combeyondagriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

 

Join the Ag Credit as they speak with Dr. Kenny Burdine about the current cattle markets and where he predicts they will go this fall. Shelby talks about the Kentucky Ag Finance Program and how it works with Central Kentucky Ag Credits AgStart for young, beginning and small farmers.

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Read the Transcript

Caleb Sadler (00:01)

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations, and events taking place in our community, who we are and what we do beyond agriculture. Hello, and welcome in to Beyond Agriculture. Caleb Sadler back with you today. We're in our Lexington branch, and I'm also joined today with Ben Robin, the man behind the scenes running our tech, as well as Shelby Wade. And we have a new cohost with us here today, Ben Van Hook. Welcome to the show, Ben, and tell us a little bit about yourself.

 

Ben VanHook (00:44)

Yeah, so, my name is Ben VanHook, born and raised in Harrison County, Kentucky. Grew up on our family farm there. We raised tobacco. We were unique in the sense that we grew seed tobacco as well as well as leaf tobacco. So had a couple of greenhouses there and raised tobacco and spent lots of time summers in the tobacco field, something I'm never going to forget. My brother and I joked we'd be out there chopping weeds and we would always have to recruit our buddies to be some cheap labor and for my dad, and we'd always bet on who would last the longest, how many days they'd last in the field. So we didn't have an option. We were out there no matter what. But I grew up in Harrison County, played football and baseball there, so spent a lot of time on the farm when I wasn't active in sports throughout school and really was involved in agriculture, but really developed that passion for agriculture when I was a senior in high school. Actually started taking AG classes prior to that point, I was in engineering, the Pathway, but kind of switched roles their senior year and had class with Savannah Robin, and she volunteered me for everything that she could get me in and really pushed me to develop myself more in agriculture and went on to the University of Kentucky and majored in agricultural economics, minor in business.

 

Ben VanHook (02:10)

And actually, Dr. Burdine was my academic adviser, so I know him personally outside of today's podcast, but so he guided me throughout school and took his class. And Dr. Isaacs and was very involved in the agricultural economics department, worked for Dr. Isaacs as well as a lab assistant teaching his Excel management classes and things like that, and also worked out at the Spinal Type Research farm out here on Ironworks, doing tobacco and hemp research as well through school. So happy to be here. Just joined Ag Credit back in May as a loan officer and like Caleb said, training here in Paris and will eventually be in our Lexington office.

 

Caleb Sadler (02:54)

Thank you for that, Ben. I really appreciate it. Before we get into today's guest and today's podcast topic, there are a few things that we need to bring up in regards to what's going on within the association or in our counties in the community. So first topic that we needed to bring up was Mr. Jim Caldwell's retirement, actually retiring from Central Kentucky Ag Credit after 40 years of service, June 30. So starting on the 1 July, our new President and CEO elect, Jonathan Noe becomes our new CEO and go out and listen to that podcast with him and Richard Medley. It's a good way to get introduced to him. So congratulations on Jim's 40 years and we wish him well in retirement. And some other things going on in our communities right now is one big topic for the summer is county fairs. We have a lot of those coming up. Bourbon County just concluded. We have Garrett County, Madison, Estelle, and Harrison County coming up. So all of our listeners be sure to attend those county fairs. Central Kentucky Ag credit is a proud sponsor in those events. So one thing I will bring up that just happened was congratulations to Finley Ben's daughter.

 

Caleb Sadler (04:19)

I think she was reserve champion or was she champion at the goat show costume?

 

Ben Robin (04:26)

She was champion.

 

Caleb Sadler (04:27)

Now tell us a little bit about what it was.

 

Ben Robin (04:30)

Yeah, so Finley has this little goat that she's been working with. And when we first got it, she loved to jump up on purina tubs and so she would just jump up there and hang out. Well, my wife got the idea to when she talked about showing, having costume contests, that Finley was going to be a lion tamer and the goat, Ruth, was going to be a lion. So she got her a lion mane. And so put the lion mane over Ruth and walk through the ring. And Finley had a top hat and look like she was lielion tamer from the circus.

 

Caleb Sadler (05:09)

The pictures are pretty cute. I would say.

 

Ben Robin (05:12)

Our listeners, one of my good friends, I sent it to him, he was like, you have to do a second take like that looks like a legit, like there's something weird going on there.

 

Caleb Sadler (05:20)

It really did look like a lion at first take. Yeah, it really did. The mane looks really good.

 

Ben Robin (05:25)

It was pretty good.

 

Shelby Wade (05:26)

And talk about the county fairs a little bit more at Central Kentucky I Credit, we support all of our local county fairs. A lot of times you'll see us out there just supporting our local youth and just agriculture, the agriculture projects that are there. So definitely get out and support your community. And it's always a good fun, good time.

 

Caleb Sadler (05:45)

All right, one other topic that we need to bring up is an event that's taking place. We just had one in Winchester, Kentucky, and that is a farm to table in Stanford with the Black Soils. That is a big event that's coming up there. And I would encourage you, if you're interested in attending that event, to reach out, to go to the website for Black Soils or Central Kentucky AG Credit. We can get you in contact with those people to attend that as well. So another event coming up. We're getting really close to Kentucky State Fair time in August. We just wish good luck to those exhibitors and really look forward to seeing them in Louisville at the Kentucky State Fair. So without further ado, I'd rather turn the mic over and introduce our guests with us on the show, mr. Kenny Burdine. And Kenny is an extension professor with the University of Kentucky. Kenny, tell us a little bit about yourself.

 

Kenny Burdine (06:42)

Yeah, thanks, Caleb. First of all, I appreciate the invite. Good to see everybody and good to be on. A real treat to be on with three former students and some friends. And one of the things that I guess I enjoy the most about my job is this very thing is that I get to know so many folks through my role as an instructor in the college and then a good chunk of those students to get to work with afterwards in different roles. And lending is one of those, and that's something I sincerely enjoy. You ask about me background. I grew up in Jessamine County. That's still my home, so I live there now. I grew up on mostly tobacco farm. We had tobacco, but we had some sheep and some cattle and horse too. So like everybody else, I grew up in the eighties in Kentucky. I grew up in tobacco field in a lot of ways. I've actually been at UK about 23 years. My role has changed some, but I am an extension professor now, so I get to do a lot of things. I get to travel the state and work a lot of good people, do a lot of extension programming, get to work on your publications and articles relative to the livestock sector.

 

Kenny Burdine (07:42)

Enjoy doing that. There's a few things that I think are more entertaining and informative than following AG markets. And I get to do that for a living and that's a real blessing.

 

Caleb Sadler (07:51)

Thank you, Kenny. And it is really a great to have you on beyond agriculture, and hopefully we get to have you back on here too, in the future, maybe in the fall or something like that as well. Because as everybody knows, the cattle cycle is certainly an evolving thing. And right now, if you talk to somebody, they'll tell you that we're going into the peak of the cattle cycle. So one thing I might ask right now is what do the markets kind of look like from a cattle background standpoint? And then we can get into the other commodities too, like poultry or swine or any of that stuff.

 

Kenny Burdine (08:23)

Sure, So starting with cattle, especially the cow calf level, we've honestly had several frustrating years back to back. We're in, I guess this is our fourth year of herd liquidation. So the cow herd is getting smaller, quite a bit smaller and still as we speak. But on the same note, we've had so many things that have really limited our ability to capitalize on the tighter supplies. So it was COVID in 2020, it was rising input prices, and it was an expensive feed in 2021. And we're dealing with inflation right now. So in reality, I don't think we're seeing the kind of price levels that we're going to see once we work through kind of the glut of beef production that we're dealing with right now that's drought driven. So longer term, the next several years, I think the cattle market looks extremely bullish. I'm very positive on it. We've seen heavy feeder cattle move up a fair amount here lately. Even this calf market, I always kind of watch a five weight steer, kind of as my baseline, if you will, for a cow calf operation. He's selling for about the same price that average that he was back in the spring.

 

Kenny Burdine (09:25)

And that's unusual. And I think because supplies are going to get tighter as we move through the year, I think we may see an unusual year where our calf market may actually be higher in the fall than it was back in the spring, and it wasn't too bad in the spring. So I think we're going to see our strongest calf market probably since about 2016, if I had to guess, when the dust settles on 2022.

 

Caleb Sadler (09:45)

And I would say this, and this is just me being the economist that I am in a loan officer at the end of the day, we've had several borrowers at Central Kentucky Ag Credit, that really started buying in on these stocker backgrounders early. So they were able to really soften that margin or really grow that margin that they had because they were able to incur some calf costs that were a little cheaper if they got them in November, or at the end of October. And then going into some long yearlings. Right now, looking at the board today, current board, it's up $3. So, I mean, that's really strong coming into the 4 July.

 

Kenny Burdine (10:22)

Absolutely. With input prices where they are, the truth is we need a really strong fall market for cow-calf operations to really offset the increased cost in fertilizer fuel, what have you. You mentioned stockers, though, Caleb, and this is going to end up being, I think, one of our better stocker years. One thing that high feed prices do right, is it limits how aggressive feed yards are when they're looking to place calves in the spring, right? So in one sense, your stock operators have a little bit less competition for calves in the spring of the year. They get a better buy on them. And when feeds higher, those price differential, price slides, we call them, right, the difference was by weight, those tend to tighten up, so it costs more to put weight on cattle via feed, and that tends to translate to higher value on feed or I'm sorry, higher value of gain. When we look at what we can do on the stocker side. So this is going to be a pretty darn good stocker year when the dust settles here in the fall.

 

Caleb Sadler (11:20)

No, I would agree. And honestly, if you look right now at the weather standpoint, too, they always tell me that a drier year, even though the grass is lighter, you'll still put more pounds on those cattle. And I don't know if there's any truth to that or not, but we were talking about it there's at the break a while ago. And Ben, you can pitch in here, too. I don't know what it's like down in Cynthiana exactly, but we're dry. We need a rain, let's put it that way.

 

Ben VanHook (11:49)

Yeah.

 

Ben VanHook (11:49)

And I'd like to touch a little bit back on my introduction there. I know I spoke on my tobacco background, but now we currently have beef cattle. We have a commercial herd of breeder cows, so I'm still involved on the family farm, and we produce our own hay as well. So I just wanted to ask you, we're pretty dry, and we've got some rain forecasted for this weekend, but it seems like the percentage keeps trickling back. What are some ways that producers can manage throughout this dry period with the next couple of months coming up and how they handle and make strategic decisions?

 

Kenny Burdine (12:24)

Yeah, great question and give you the best I can do in terms of answer, but we're in that time of year, and we'll be for a while still where rain are just so spotty. My wife and I were actually moving cattle Sunday afternoon. In the last two weeks, I've been shocked how much pastures deteriorated. It's a combination of lack of rain and certainly heat both right. But it's certainly a challenge that's out there. As we think about strategies, there are some things we can manage, some things we can't. Always, when I get into a situation, like I always say, think about rotational grazing, the more that we can rotate cattle, keep them moving, that always helps. I was optimistic about getting some rain was at about ten days ago now, I guess it was would have been last Sunday, I suppose, and even started raining in the middle of the night wife even woke me up and told me. And we got up in those two tents in the gage. Right. So you get into those kind of things all the time. Yet I've got some friends that got an inch or more. So being like you, I'm hoping that we think I'm hoping that we're able to get some more rain here in this next it looks like some four or five days ahead of us with some possibility, but I think rotational grazing first.

 

Kenny Burdine (13:35)

The second thing that I always like to think about is that we're in a situation like this where it's dry. I start thinking about, okay, what about winter hay supply? And I'm getting increasingly worried about that. And frankly, I was even back before it got dry here in Central Kentucky because so many parts of the US are dry. And if you look at hay stocks coming into this year, they were fairly low in a lot of places. So we may see some pull of the hay that we do have into other parts of the country. And you combine that with high fertilizer prices and I don't have any way to track this, but I guarantee on average folks applied less fertilizer than usual this year. And I would have done the same thing by the way. Okay. But my point is we're going to see lower production levels in all likelihood. So you combine all those and I think hay supply could be an issue come forward. So planning ahead for that I think is important. And then the third thing I would say sorry for the long answer no, but you've got to think about long term decisions and sometimes that means you cull a bit harder and you're like this.

 

Kenny Burdine (14:32)

And the reason I wanted to mention this is because we're in a unique situation now where we've got an extremely high cull cow market, right? I mean run of the mill cull cows are in the 80 to 90 cent range, some of them pushing a dollar.

 

Caleb Sadler (14:43)

Well, I was going to say I talk to Ben and I think he's got a really good example of this this week. I mean the cull market right now is just unbelievable.

 

Ben Robin (14:52)

That's what I was going to try to chip in and get your opinion on that. There's a lot of cows moving through the market and bulls and what kind of effect that's going to have on everything. Cow numbers.

 

Caleb Sadler (15:03)

Well, I mean when we also talk about it too, we're not the only place that's experiencinga drought. I was just had somebody in my office there earlier that made a comment that they had a couple of loads of cows that came out in Texas that were really thin and needing a place to go for them. And really there's not a real good place around here because we don't have the grass to put the pounds back on them right now either.

 

Kenny Burdine (15:26)

I've been shocked how strong the cull cow market has remained despite how many cows we're moving. It's a stunner. We've kind of got the perfect storm, right? We've had some challenging years, the cow calf sector back to back. We've got high cull cow prices and we've gotten dry in a lot of places. That's a recipe for moving cows. It's an opportunity in one sense, right? If I have to unload some cows, this is not a bad time to do it. The other thing that I would say is that if you kind of look at what the cull cow market is relative to the breeding stock market, I think breeding stock is a better buy right now, relatively speaking. So by that I mean it's probably not a bad time, if I had to, to think about unloading some cull cows, buying some young, breeding stock some bred heifers, something like that, have a younger herd. Right. Maybe a better quality herd in the next few years when I think prices are going to be better. Ben to your question about numbers. I'm trying to think when I ran this, I would have ran this back around the end of may, but we had moved we've slaughtered 220,000 more cull cows this year than last year. And to put that in perspective, I mean, last year was a pretty big cow movement here, too. So we're on track if that were to kind of continue forward, we're on track to harvest about 500,000 more cull cows this year than last year, which that in and of itself is two and a half, 3% of the US. Cow herd. Combine that with heifer retention, I think we could have 700,000 fewer cows in 2023 than we do now. So that's a tighter supply I think we're looking at down the road.

 

Caleb Sadler (17:05)

I was getting ready to bring that same thing up as we were sitting there talking. I wrote it down here, and that was heifer attention. You might speak into this, but if you look at the cattle on feed report right now, are there any signs of any heifers that are not being on me? A lower amount of heifers being on feed, maybe that producers are keeping back more, or no insight into that.

 

Kenny Burdine (17:27)

We're seeing the opposite. Okay. Heifer numbers on feed are pointing to the fact that we're keeping back fewer heifers for replacement, right? Yeah. We only get two estimates from USA on true heifer retention for cow replacement. One in January, 1 in July. So the january one was down. I forget the number 3%. I think july will be down, too. So all we can look at right now, really, is heifer slaughter placement of heifer on feed. And what it's pointing to is the same thing a calorie getting smaller.

 

Caleb Sadler (17:57)

Yeah. And we feed into that, too. That's a good way to transition from what else I wrote down, is how long do you really think this calf market will stay strong at that point in time? If we have less cows on the market, obviously, that's just less calves. They're going to be at the sale barn. I don't know how long that will take for. I mean, typically, you might go in to see or you tell us how long the cattle cycle is at that point in time before we start seeing that come back around.

 

Kenny Burdine (18:23)

That's the million dollar question. Right? I think we'll see a good calf market this fall. I think we'll see an even better calf market in 2023. And I think also in 2024 now, weather is going to impact that, right? We could see multiple back to back drought years. I hope we don't, but it's possible things could change quickly. So even if we started, even if weather got better in 2023 and we started rebuilding this hurt, right. It still takes some time to do that. So if everything changes at the drop of a hat, we're two or three years away from bigger calf crops, right. So it's going to take at least that long, probably longer. The other thing, though, is you also can't ignore that in reality the value of cattle is driven by the value of beef. Right. And that all kind of starts at the retail level. So what happens with the other species affects that, too. Fortunately, we're seeing high prices retail pretty much across the board, but that can change, too.

 

Caleb Sadler (19:21)

And I know that our export levels right now on the beef side are up right now. Are we seeing that maybe as a correlation to we're exporting more beef or is it just for the fact of a demand right now for it?

 

Kenny Burdine (19:32)

I think it's both. Exports are up, frankly. US. Demand has been strong and we're seeing good export. Most everything fundamentally looks good. I think the supply picture, beef production is artificially high right now because of the dry conditions. Because we're culling so many cows, we're pulling cattle forward. If you look at cattle on feed and the placements in the lower weight categories, a lot of the placements are in the lower weight categories, which is unusual right this time of year. But it's drought driven, so that's going to eventually work the system and we're going to be tight on supplies eventually. That's not sustainable is what I'm saying.

 

Caleb Sadler (20:09)

Yeah, and I was talking to somebody there yesterday and we were talking about as we move into the fall run, typically our basis here gets narrower. And he was telling me about some cattle that were trading out west right now, that we're above the board and not just a little above the board. They were substantially above the board trading. I mean, I know it takes longer, further for us to get cattle out west and cattle our value based on proximity of feed and feeding out those cattle. But why do those cattle out there, why are they trading so much higher above the board right now?

 

Kenny Burdine (20:47)

It's transportation costs, Caleb. It really is.

 

Caleb Sadler (20:51)

Well, if you couple that with $5 fuel, it doesn't take long to add up at the end of the day.

 

Kenny Burdine (20:55)

Exactly. All those things that we talk about can impact basis. But on the same, the bottom line is if I'm in Kentucky and a feed yard in western Kansas buys a group of steers, they got to get them there. Right. So our cattle prices typically reflect those transportation costs. And with diesel fuel where it is now, I don't think we're going to see an unusually strong basis here this year simply because of transportation costs.

 

Caleb Sadler (21:23)

So you think maybe we could be backwards a couple of cents off that basis than what we typically average?

 

Kenny Burdine (21:28)

Maybe we will be right. I mean, rule of thumb, a lot of folks use is roughly diesel fuel price per loaded mile. Now that works pretty well in kind of a normal diesel fuel price range. It doesn't work when you get to five, $6. The point being the transportation costs go up with fuel cost. And frankly, it's not just fuel cost, right. It's the cost of maintenance and it's the cost of the trucking. Right. It's all that kind of stuff. So yeah, that's going to impact our kettle prices. I think they'll be good. But I still think you'll see that differential between what we see in Kentucky versus what you see out there in the major cattle feeding areas.

 

Shelby Wade (22:03)

One of the things that you talked about there, Kenny, especially when Ben was asking about what producers here locally could do to kind of offset this drought year we're looking at potentially having one of the things I know you talk a lot about with your students and with other groups across the state is LRP insurance. And so for those who aren't familiar with that term, livestock risk protection. So tell us a little bit about that. And are more producers using it these days? I know it seems like it's a little bit more attractive nowadays, so it gives a little insight on that.

 

Kenny Burdine (22:35)

Absolutely. So I'm trying to think, I started UK in 2000, Shelby. I first started doing programs on futures and options, I think in 2001, maybe the very next year. And when I would do those programs, because we're talking about futures and options, the only risk management tool that we had was really the board, right? Yeah. And when I'm using the board, I'm locked into 50,000 pound quantities. So when LRP finally came around, we finally had a tool we could use to manage price risk in feeder cattle that could be scalable at a small level, so I can buy it on a few head. So a lot of our smaller operators that aren't trading in truckload quantities of cattle can utilize this tool. Simple way to think about it is you're buying an index insurance product that pays you based on movement in the CME feeder cattle index. And that index is seven day weighted average of feeder cattle in twelve major states. So when Caleb asked about prices out west, it's really those states that define that index. You got to think, okay, that index isn't go to transitransitionstion into kentucky, perfectly. But the idea is if that index moves and feeder cattle prices are lower out there, they're going to be lower here too.

 

Kenny Burdine (23:39)

So that's the idea. So it's a good product. You mentioned it being more attractive now. And that comes down to premium subsidy. When I first started doing programs on LRP, the premium subsidy was 13%. Right now, depending on the level you buy, it's 35, 45 or 55%. Now when I work with folks, I usually push them towards one of the higher coverage levels, which usually means one of the lower subsidy levels. The way to think about it is, on average, you're going to be paying about 35% less than what you would pay for a comparable put option. That's a pretty good subsidy.

 

Shelby Wade (24:13)

Yeah.

 

Kenny Burdine (24:14)

And it's attractive enough now that even larger producers that could use futures and options, it's looking more attractive for them to be using LRP, too. So if that's not in your risk management toolbox, it probably should be.

 

Caleb Sadler (24:28)

In my brief experience with it, it leaves the upside open. It still allows you to capitalize on the market. It protects the risk. So, I mean, the producer really just has to get comfortable with where they want to be at and what they think they can't take anything less than those cattle are for.

 

Kenny Burdine (24:44)

Work with your lender and see what level of LRP insurance you need to cover your downside. And then you hope for the best, right. You hope you spent some money on premium and didn't need it. Right? That's the best case scenario. Yeah.

 

Caleb Sadler (24:56)

Well, and we were talking I know the LRP really gained some traction here recently, and it had to do around that premium. I'll let you maybe get some insight into that because I think there before it was maybe paid ahead of time. And now you don't have to pay it until it's after you sell the cattle.

 

Kenny Burdine (25:14)

They made several changes to it over the last two or three years. Kind of hard to keep up with, truthfully. The premiums were increased. But yeah, what you're referring to was initially I don't know, actually, when this changed, I think 2020 I could be wrong, Caleb. Initially, though, you had to pay premium upfront, and now you pay it basically at the end of the policy. So it works the exact same way as PRF insurance. For example, if you're doing indemnity, then you never actually end up paying the premium if it offsets that. Right. And if you do, you pay it at the end. So it just makes a little more palatable sometimes. So in most cases, in a cattle scenario, you can deal with that after the cattle are sold.

 

Caleb Sadler (25:49)

Well, that's exactly right. And if you're looking at it right now with extremely high input costs, that's just something the producer doesn't need right now. You don't need to add another bill that's unnecessary at the time of purchase. So it really works out great for farmer

 

Ben VanHook (26:04)

At Ag Credit, we deal with a lot of young, new and beginning farmers. How does somebody who doesn't know a lot about LRP insurance learn and go about maybe enrolling in that?

 

Kenny Burdine (26:13)

That's a great question. So there are multiple ways that you can learn about any of those risk management tools. I like LRP, first of all. Right, on my team, we do a good job, I think, at the county level, doing extension programs on things like this. And one of the parts of my job I enjoy the most is going out and doing programs like that directly with farmers. On the same note, we've got a lot of material online. I've done a couple of video programs on LRP. So if someone just wants to watch something from the comfort of their home now we've got some YouTube videos that are out there that you can get that information from. Work with your lender, talk to them about what your goals are, be blunt with them and tell them about your pros and cons or cost structure, and they'll help you understand what risk levels you can tolerate and what you need to think about managing. And they'll kind of point you in those directions. It's one of those things too, though. You need to develop a relationship with someone that you trust on the insurance side. LRP the way that it's set up, it's not like you're going to be shopping for price, right?

 

Kenny Burdine (27:14)

That doesn't matter. So find someone that you're comfortable working with as an insurance provider and build a relationship there too.

 

Caleb Sadler (27:23)

On your operation. I know that you all turn a few calves yourself at that point. Do you all utilize that program yourself or do you strictly stay on the board side and with calls or puts and things like that on the cattle?

 

Kenny Burdine (27:38)

Good question. I run some cattle with a friend and colleague. In the past, when we had more of a traditional stalker operation, we actually have used LRP and used the board both. Right now we're moving smaller numbers. And the way I kind of describe it is we've got a grazing grazing-oriented stocker operation, but it's kind of evolved into like a forage finishing operation now. So what we're doing doesn't lend itself well to something like LRP your futures. So we're in a little bit different market right now. So we're very grazing oriented, actually. A bale graze through winter. Great system, by the way, but it doesn't lend, it doesn't fit with what we do. Our market is very different.  We sell a lot of cattle direct and some is freezer for beef.

 

Caleb Sadler (28:20)

Got you.

 

Shelby Wade (28:22)

So you mentioned that obviously beef in Kentucky, that's kind of your primary focus. The other proteins you do work with as well. What are you seeing on the side, those type of things. As far as Kentucky, nationally, globally, that kind of are affecting beef here in Kentucky.

 

Kenny Burdine (28:41)

The markets are relatively strong, much like the beef market, maybe even more so, frankly. Pork and poultry are impacted by feed cost. Right? Yeah, we don't think about it sometimes. We probably have more flexibility on the feed side when it comes to cattle than the other species do. Right. In Kentucky, both pork and poultry tend to be more contract integrated. We have a lot of independent operations, obviously, but we also have a lot of those that are out there under contract with Integrators. So it's a very different system. With construction costs like they are right now, I don't think we're seeing the growth that we were seeing at one time in some of those types of operations. And I think it's just a function of what it costs to get an integrated operation up and running.

 

Caleb Sadler (29:27)

The technology that's behind that right now is unbelievable. If you go into a chicken house, it's like working into a four star or five star hotel. So basically today that industry has come a long way.

 

Kenny Burdine (29:42)

There's no doubt sectors are healthy, but they have challenges, just like the beef sector on the input side.

 

Caleb Sadler (29:51)

Now, where do you see consumption or demand at the retail level being right now from a standpoint of beef or poultry or pork? Where do you see that falling at? Are people demanding more protein from those cheaper sources?

 

Kenny Burdine (30:14)

Really good question. And frankly, it's hard to track. The retail meat price series are not ideal. There are some series you can use, there's some composite series for the species. There's also some individual cut prices you can track. One of the things that we wrestle with when we look at retail prices of meat is featuring, right? And I live in Jessamine County, that's home, so I'm in a fairly competitive retail grocery type environment, but there's a lot of featuring that goes on with meat. Right. So a lot of your meat managers will tell you that a lot of what they move has moved at cost. Right. Because it generates traffic. So it kind of makes it tricky. General answer to your question, though. Prices have actually remained very strong. In fact, box beef prices have actually slipped backwards. Retail prices hold pretty well. But I do think that the fact that these cull cow prices are so high does point to something. Right. And if you look at trim prices, I do think we're starting to see some movement towards cheaper meat products, ground beef being one of those. Not the ground beef is cheap, by the way.

 

Caleb Sadler (31:20)

Yeah, no doubt. Well, the other things, yeah, if you look at it, compared to the nation's inflation rate right now.

 

Shelby Wade (31:28)

You mentioned it there, beef is higher in the store relative to a couple of years back, but so is poultry, so is pork. So that, you know, all of the meats are increasing price wise. And like you mentioned, Caleb, inflation, no doubt families are feeling a little tight in the pocketbook, so they're going to cut back a little bit. It's just a matter of how long this inflation holds out. And hopefully all the proteins, especially beef, of course, remain high on the list at the grocery store.

 

Caleb Sadler (32:00)

So one topic, and that Shelby I think you fed right into it, really. But if you look back 2020 with Covid, we've seen grocery store shelves bare, completely bare, and we've seen a lot of people start pick up and selling beef off the farm. And there's two people here. Well, really? Three, you do it yourself. What's the demand like there? Is it still the same as it was in 2020? Or are we seeing any softening there or all three might pitch in here?

 

Shelby Wade (32:35)

Yeah, that's a great question. On my side, it's still very strong, and especially if we can keep our products, I mean, they're going to be a little bit higher than the grocery store. It's a little bit more of a premium product, but if we can keep it at a good price point to where it's not over the budget of consumers, I see this as a trend that's going to last a while. This local driven people want to get their beef from the farm. They want to go out there and get it directly from us. So I definitely see a good positive still market there.

 

Ben Robin (33:11)

Yeah, I agree with you, Shelby. Our customers are still calling us left and right stock freezers, and it's just different times. I worry about the talks of recession and how that's going to affect consumption and sales. But yeah, I mean, business is still good.

 

Kenny Burdine (33:33)

I would have bet money that we would have seen a fall off in demand for local protein, but I don't know that we have.

 

Caleb Sadler (33:41)

I would think there's probably an increase. I'm only speaking from a consumer level standpoint. I raised beef cattle myself, but I don't slaughter any. But there's just a comfort level knowing.

 

Ben Robin (33:53)

I was going to say trust. Definitely.

 

Kenny Burdine (33:57)

We've always been a little bit tight on local process capacity in Kentucky. Right. As far as capacity to actually have livestock slaughtered and sold for direct consumption. And that became really apparent during COVID. And we've added some capacity and we're adding more. But it seems to me like anecdotally what I see is we're still pretty backed up in a lot of these plans. So that's a sign to me. That market keeps growing.

 

Shelby Wade (34:23)

Yeah, I agree with that. And Ben, we're booked out all the way through the middle of next year. I have appointments already at these places because we have a set schedule. They're working us in. But, you know, just Farmer Joe down the road, he just wants to take one beef. He's going to wait a while, depending on the different processing plants. So that's definitely something that's still in effect today.

 

Ben VanHook (34:54)

I think a lot of that demand was driven by COVID. But since people are starting to source some of their proteins and beef here locally, they're creating relationships with local farms. And that's what we really like to do here at Ag Credit. Once you meet a producer and create that relationship and you're able to ask them questions and really learn about where their beef comes from, you can't do that at the grocery store.

 

Caleb Sadler (35:18)

That's right.

 

Ben VanHook (35:18)

So some of that is continuing and hopefully that will continue in the future.

 

Ben Robin (35:24)

Yeah, what we say all the time is they're not buying beef from us. They're buying our family story and our product and how we raise the cattle and our livelihood of the animals out there, too.

 

Caleb Sadler (35:39)

Well, we'll get back a little bit more on topic, I guess you could say. But I know when we were talking there, Kenny, before, I know you do a lot of programming with university. Tell us a little bit about the programming that you do. Do you travel all the way across the state of Kentucky, or are you more centralized here in central Kentucky or how does that work?

 

Kenny Burdine (35:58)

No, I'm based here on campus, obviously. My office is really just maybe a mile from here or something. But I travel the state from east to west, north to south, and that's one of the things I enjoy. Naturally. I spend more time in areas that have more livestock production, of course. But no, I've been in 119 in Kentucky's 120 counties. Wow. Now not all of those are extension related travels, but I've got one left to hit.

 

Caleb Sadler (36:23)

What county, if you don't mind me?

 

Kenny Burdine (36:24)

I don't mind you asking one bit, and I apologize. Any listeners that live there? It's nothing against Martin County. I just have never been in that county.

 

Caleb Sadler (36:30)

I never even knew there was a Martin County in Kentucky. I'm sorry.

 

Kenny Burdine (36:34)

It's a beautiful county. I know it is. I've just not been there. But, no, I enjoy traveling east to west. I enjoy the Mississippi to the Big Sandy.

 

Caleb Sadler (36:42)

I will ask, though, what do you see across the state? I mean, do you see stronger cattle prices in certain communities or how do you see that across the state of Kentucky?

 

Kenny Burdine (36:52)

There's always going to be variation and it comes down a lot of things, frankly. Right. The type of cattle, the quality of cattle, how strong the buying community is right in that area. I had a graduate student, I'm dating myself now because this has been a while, but they did a study of I think he looked at four or five different markets across the state, and he had obviously a lot in this area, some kind of in, what I'd call more true central Kentucky when you get a little bit west of here than some out in the far western part of the state. And when he statistically looked at those prices and the conditions that they sold and accounted for, whether it was an inway or an outweigh market, there really was not much difference in price. I think that's interesting to think about. These markets are pretty efficient, right? If they were a big difference in one market versus another one, the market will sort that out. Right. Then you don't know what markets do. So we tend not to see major differences. Now, on a given day, anything can happen. Right. But if you look over the long term week after week after week.

 

Kenny Burdine (37:53)

We don't see a lot of variation.

 

 (37:54)

Right.

 

Caleb Sadler (37:56)

And I'm going to get a little deeper in the weeds here because I've been out west and I've experienced a spring out there and I know a lot of backgrounders out there will buy calves or feed lots. They'll buy calves and they'll graze them on the wheat or whatnot. Have we seen any softening on that this year with wheat prices?

 

Kenny Burdine (38:16)

Yes, although I think so a lot of that occurs in the Southern Plains. I think Texas, Oklahoma, and I don't know, maybe the southern half of Kansas, something like that. I think wheat prices certainly matter. But remember, it was starting to get dry there way earlier. So I really think that the dry conditions that we've been in that area really started in the fourth quarter. Right. It was not dry in the Southern Plains until we got to about September, October. And it was almost like I took that drought and I kind of shifted it counterclockwise and it moved into the Southern Plains. So we saw a lot of movement there. But even ignoring that, just the basic question do wheat prices impact wheat grades? And answers, yes, they'll use the term out there, they'll use the term graze out. And what a lot of times they'll talk about is, okay, if I can graze cattle and wheat and get them off, I think like mid March kind of the rule of thumb that I won't have much impact on yield. All right. Now there's still some impact on whether or not they want to place cattle or not on.

 

Kenny Burdine (39:13)

But certainly when you think about grazing cattle post that mid March time period when prices are high, there's much less interest in that graze out, they call it.

 

Caleb Sadler (39:24)

If you're sitting there looking at the board right now, I would probably be more inclined to harvest the wheat off of that.

 

Shelby Wade (39:33)

As far as our next kind of category question going into you talked about your extension programming. Of course, one of the topics that we discuss a lot with our customers and just people who are interested is going to be the transition from the older generation of farmer. We got the rising average age of farmer across the nation transitioning that into this younger generation. So is that something that you done work with? And of course, obviously the majority of our foothold is going to be the cattle producer. So touch a little bit on that.

 

Kenny Burdine (40:06)

I don't do a lot of programming directly to transitions myself.  Steve Isaacs probably does more of that than anybody in our department. But it's an important topic and it's one that I think a lot of folks don't want to think about. But it's one that if you don't think about it, it will come back to bite you. And sometimes it's as simple as just having the conversation. For example, I don't do programming with it, but I oftentimes am involved when something comes up, I'll put it that way. And it's not uncommon for one generation to just assume that the next generation wants to operate the farm and they never really have the conversation. So it drives the planning and the decision making to a point that if they had just simply known what each other's goals were, it may have changed things drastically. So the first thing is just to have a conversation. Don't just assume that the farm is going to be operated after you're gone. It's not pleasant to think about, but it's better to know than not know.

 

Caleb Sadler (41:06)

No, that's exactly right. And secession planning, I'm a big believer and a big component of that. At least write it down. That way somebody knows.

 

Shelby Wade (41:17)

That's a great tip. Yes. And Ben Van Hook here alluded to that a little bit. Of course he's going to potentially follow in his family's footsteps and take over the family farm one day. But we have a good number of young farmers that are coming to us and whether that's maybe taking over their family farm or a new farm in general, just getting started. So we have what we call the AgStart program. We've talked about it a lot here on the podcast, but that's the new young beginning farmer that's really just getting started and where do they need to go? So they come to us. We kind of break down the different things. We have different programs. One of the things we work a lot with is USDA. Of course, we have a guaranteed loan program that we work with them, but also Kentucky Ag Finance Corporation. So of course you're very familiar with that program. So if you want to tell us a little bit about your time there and how that program, you've seen, it benefit a lot of young farmers.

 

Kenny Burdine (42:14)

Absolutely. I really enjoy working with the Kentucky Ag Finance Program. It's been one of the most rewarding things I've gotten to do. So this is a program that really was kind of started by the Ag Development Fund through tobacco settlement dollars. The corporation itself was kind of created to manage those funds and the staff there does a fantastic job. But put simply, this is a partnership loan program and that's the way you want to think about it. You work with your lender, that's where it starts. And then they work with the Ag Finance Board and we've got limits on what we can do, but up to a certain amount, we'll provide half the funding for the loan. And we have some different provisions too, by the way, for beginning farmers. But the idea behind it is you get a little more attractive interest rate because the money from Ag Finance goes into a pretty good rate. But the other thing that we do is we take second position typically on the loan. So what that means is it really puts the lender in a better position to loan money and we like to think that in a lot of cases that we can make loans to folks that would have a hard time getting a loan otherwise because we take the riskier back into that loan.

 

Kenny Burdine (43:27)

So I'm proud of that. It's worked extremely well and I have learned a lot from some very smart people I get to work with on that board and I really do enjoy being part of Ag Finance.

 

Caleb Sadler (43:37)

So you talk about the money that they lend out and I know on my end, but where does that money come from and how does Kentucky AG Finance, how do they get that money?

 

Kenny Burdine (43:47)

Sure, over time that has basically come from the Ag Development board, which of course we're talking about to back a set of dollars. Right. So that's just been one of the things that's been established as part of those dollars. Okay? But now we're at the point now it's actually a pretty big loan pool doing very well and a lot of our money is coming back in. So it's starting to get the point where it's

 

Caleb Sadler (44:08)

Could be lending out your own capital at that point.

 

Kenny Burdine (44:12)

Which is something i'm proud of.

 

Shelby Wade (44:14)

You mentioned there, getting those loans into hands that otherwise might not qualify for the loan and we absolutely see that on our end. I know Caleb has made more of these loans than I have, but being able to help that young farmer get going if that wasn't an option so it is a very rewarding feeling to see that happen. So if anybody listening wants any more information on those programs, feel free to reach out. We'll definitely talk to you one on one about that.

 

Caleb Sadler (44:46)

And really you can reach out to any office at Central Kentucky Ag Credit. There is a loan officer in each office that will be more than happy to give you some guidance into that Ag Start program and to answer any questions you might have about an FSA guarantee type loan or Kentucky Ag Finance loan. Kenny, I will ask this and I don't know if you said it and I might have missed it myself, but how long has Ag Finance been in existence? And I don't know off the top of my head either. I'm not going to hold you to it.

 

Kenny Burdine (45:18)

It predated my involvement on the board. I've been involved with the board, I think 14 years. Okay. And don't even hold me to that one. I'm at that point in my life, but I would have to go back and look to when it actually started. But it's been around since pretty early in the days of the fund. The idea of having a low interest loan fund that we could partner with existing lenders to make Ag loans was a goal of the aging of the Ag Development board and some of our leadership. And I think that foresight is why that loan program is where it is today.

 

Shelby Wade (45:54)

And I think definitely in the rising interest rate environment that we're in now, that's even more attractive because our blended rate is much better than the current market rates. So very attractive to young and beginning farmers.

 

Ben VanHook (46:09)

So, Kenny, I know another resource that the University of Kentucky puts out there is the Cattle Market Notes Weekly, and I know you're directly involved in that, as well as with some fellow extension professors at Mississippi State and University of Arkansas. I think that would be a great resource or tool in the toolbox for local producers. Talk a little bit about what you all put out there and how do people subscribe and get that weekly report?

 

Kenny Burdine (46:37)

Yeah, great question, and I really enjoy working on Cattle Market Notes Weekly, the full story on that. Like everybody right when COVID would really begin to impact things in March of 2020, you're talking to somebody who spends a lot of time on the road. In fact, I had a series of cow-calf conferences literally planned for like a week after they kind of started pulling things back. So it was quite a shock to me all of a sudden, how do I do extension programming and how do I get information out when I can't be on the road face to face like I'm used to doing it? So I started doing a weekly market update just as a way to kind of keep in communication with our stakeholders, our county agents. And then as things picked back up, I got back in the classroom. I really couldn't do that every week. So Cattle Market Notes Weekly is a weekly newsletter, but I rotate, like Ben said, with two of my friends and colleagues, Josh Maples and James Mitchell. So every third week one of us writes, but our clientele gets something every week, so there's no easy way on the air to share how to sign up for that.

 

Kenny Burdine (47:38)

It goes through MailChimp, there's links I can send you, I can get you on there. Probably the simplest way to do it is reach out to me or one of your lenders and we can get you on the sign up list. The URL would be long and I don't know what to actually get you signed up, but that comes out once a week on Monday afternoons. One thing I always say about Cattle Markets weekly, there are several there's several Cattle Market newsletters out there that are good, and I read them all, but because I'm in Kentucky, Josh is in Mississippi, and James is in Arkansas, it tends to be a little bit more calf and feeder cattle oriented. So we tend to focus on topics that are a little bit more feeder cataliented and less fed cattle oriented.

 

Shelby Wade (48:19)

Okay, that's good. Yeah, that would be great information for.

 

Caleb Sadler (48:21)

Our listeners, and I think this is still the case, but I knew Kentucky at one time was the largest beef producer this side of the Mississippi. Is that still the case?

 

Kenny Burdine (48:30)

We are, we have the largest cow herd east Mississippi, so we rank 8th. Okay. But largest on this side of the Mississippi River.

 

Caleb Sadler (48:37)

Awesome. Well, Kenny, as we finish up and wrap up here today, I do want to give you the opportunity to go back and we'll just touch on the high points here real quick. I'd like to maybe give your take or a brief forecast of what you think the cattle market will be and then we can wrap up and go from there.

 

Kenny Burdine (48:53)

Sure, glad to do it. Of course there are so many things that impact these cattle markets, although I'm always glad to give you my best guess, understand that anything can change that and I have been wrong in the past and I'm sure I will. Again, I like to always say that I really do think this calf market is falls going to be unusual because I'm going is a really good chance that we see calf prices higher this fall than we saw in the spring at a bare minimum flat. So five weight steer in the spring averaged about $1.75. He's not really moved much from that state average right now I've got groups in the 180s, don't get me wrong, right? But just state average run of the mill $1.75, I think he'll be at least that high this fall. I think October, I think decent chances even higher. So that'll be a good cap market. Now, in all fairness, with fuel and fertilizer prices eat up a good chunk of that. I think this heavy feeder cattle market is also going to run. I don't think we've seen the top yet, I don't. Seasonally August usually is our peak in the heavy feeder cattle market.

 

Kenny Burdine (49:58)

But again, I think because supplies are going to get tight, I think we're going to actually see probably those prices higher in the fourth quarter than we even see this summer. So I'm pretty optimistic going forward. One last thing, don't want to leave without saying this, just how much I appreciate the relationship that we as the UK extension service has with Ag Credit, friends, partners, sponsors and we're so glad for that relationship. Thank you all so much.

 

Caleb Sadler (50:23)

Thank you again, Kenny, thank you for coming on and we really appreciate the insight and the wisdom there that you have to share with the listeners of Beyond Agriculture and thanks for Ben for coming on today, first timer. So really appreciate him as well. And Sheby for joining us again.

 

Shelby Wade (50:37)

Yeah, good job, Ben. Thanks Kenny, it's been a pleasure as always. And go cats.

 

Kenny Burdine (50:51)

This episode of Beyond Agriculture is brought to you by Central Kentucky AG Credit. Thanks for listening to the podcast. Be sure to visit Adcreditonline. Com/BeyondAgriculture, access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

Listen to Caleb as he travels "South of the River" to our southern branches and talks with SaraVard, John and Patrick. Get to know them as they tell you a little about their life in and out of Ag Credit. Trying to figure out how to build a relationship with your lender? Listen to what our Loan Officers from Stanford and Lebanon have to say about the importance of finding the right lender. 

Read the transcript

Caleb Sadler (00:01)

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations, and events taking place in our community, who we are and what we do. Beyond Agriculture. Hello and welcome in to Beyond Agriculture. Caleb Sadler with you here today. I'm also joined well, today we're actually in our Danville Branch, and I'm actually joined with three other loan officers with Central Kentucky Ag Credit today. I have Miss SaraVard VonGruenigen out of our Stanford office. I also have joined with us as John Peek out of our Stanford office, and then Patrick Durham out of our Lebanon office. So these three individuals are going to help us out on the podcast today, and maybe in the future you'll hear them back on as we travel across our 17 counties with Central Kentucky Ag Credit. As we interview different people out of the south, one of these individuals might pick up that podcast and help us host that. So, hello everyone, and welcome onto Beyond Agriculture. We're going to do a little bit of introduction around here, so SaraVard we'll start with you. You're a loan officer and our Stanford office, so tell us a little bit about yourself.

 

SaraVard VonGruenigen (01:18)

Okay, I've been over at Stanford for 14 years now, been the association 15 years, a loan officer, like you said, I live in Garrard County, born and raised, and we have beef cattle operation over there, and I have a little eight year old boy, and we live in the southern part of Garrard County and just enjoy life over there.

 

Caleb Sadler (01:43)

I try to keep up with you a little bit on Facebook too. You like to hike too, is that correct?

 

SaraVard VonGruenigen (01:47)

Yes, I like to hike a lot, actually. Next week I'm going hiking all week.

 

Caleb Sadler (01:51)

Awesome. That's awesome. Is that a spring break trip?

 

SaraVard VonGruenigen (01:53)

Yeah.

 

Caleb Sadler (01:54)

All right. My wife is on spring break next week too, and I told her that I would at least take off Friday, and she told me the other day that I don't know, that I'll be around here. And I said, well, that's fine, I'll just take off anyway and maybe I'll get some farm work done anyway. All right, well, thank you, SaraVard, I appreciate that. Next up, we have John Peek as well. He's a loan officer out of our Stanford office. So hello John, and welcome on to Beyond Agriculture and tell us a little bit about yourself.

 

John Peek (02:20)

Yes, as you said, my name is John Peak. I've been with the association for 20 years, born and raised in Lincoln County, Kings Mountain area. I've got a 75 acre farm there that was my grandparents and run a registered Angus small herd and graduated from UK, worked for two years after that before I started Ag Credit. And actually Ag Credit, for me was a chance to come back home. So, in short, that's kind of how I got here.

 

Caleb Sadler (02:54)

Where did you work at before?

 

John Peek (02:55)

I work for a place in Versailles called Kentucky Equine Research, and we actually sold horse supplements, race horse supplements, and interestingly enough, we had camel supplements as well because we did a lot of business with Shaks and so on in the Middle East who are very involved in the racehorse industry.

 

Caleb Sadler (03:16)

I find that funny at the same time because there's not a lot of camels here in central Kentucky. And actually, if you drive in between Paris and Winchester on 627, there are actually camels on a farm there. And I don't know who owns that property, but it's neat to see them along the side of the road, that's for sure.

 

John Peek (03:33)

Interesting.

 

Caleb Sadler (03:34)

Thank you. John, how long have you been with the association now?

 

John Peek (03:38)

This is my 20th year.

 

Caleb Sadler (03:39)

20Th year, wow. So I won't get into how old I am in there either.

 

John Peek (03:44)

I'm one of the old guys now.

 

Caleb Sadler (03:46)

All right, up next we have Patrick Durham. Patrick out of our Lebanon office, and I think, Patrick, you're a recent hire with the association, so tell us a little bit about yourself and where you come from and what you do now.

 

Patrick Durham (03:58)

Again, my name is Patrick Durham. Yes. I am the rookie of a group started in January. Previously I worked about 15 years in the livestock marketing industry in around the area of Lebanon, more in Washington County and then the last five years in Bowlin Green and Irvington with United Producers. Came to Lebanon in January, starting a new career path with Ag Credit, excited about doing that and in the area and working with a great group of people. My hometown is Hodginville, Kentucky, born and raised there. Again, a lot of friends, family over in the Washington County Lebanon area. So it's kind of like a second home coming over here. I know a lot of people coming in and out. Wife Jennifer, two boys, 18 and 11, both real active in sports. We also have a registered Shorthorn farm, commercial cattle there in Hodgenville. Just do cattle and hay and coming back to Lebanon to work every day and going back home and doing that just kind of fits the mold where I'm at right now.

 

Caleb Sadler (05:17)

Got you. Now I'm going to go back to SaraVard. I know you alluded a little bit to your farming background. Tell us a little bit about your farming operation today, and maybe we'll feed off of that and see if anybody has any questions.

 

SaraVard VonGruenigen (05:32)

Okay, yeah, sure. So we just got commercial cows. Every once in a while, we will put together a group of feeders.  We've got 100 mama cows at this point, and we have two different farms we run. My husband's family farms are down in southern Garrard, and then my family farms are in the 1295, the Hill and Holler region of Garrard County.

 

Caleb Sadler (05:55)

Well, if you're ever in Nicholas County, that's exactly where I'm from, too.

 

SaraVard VonGruenigen (05:59)

We tease and say that I've got one leg longer than the other. I can only walk around the hill one way, can't walk the other way. I'll tip over.

 

Caleb Sadler (06:05)

They always said we always raise tobacco, and they always said that you could get more tobacco in a curved row than you get a straight road.

 

SaraVard VonGruenigen (06:12)

Yeah, we're farming all sides. There you go.

 

Caleb Sadler (06:14)

I understand. Are you all primarily spring fall calving?

 

SaraVard VonGruenigen (06:18)

Yes, spring calving is our goal. That doesn't mean we don't have a few that trickle in the summer. But our main majority of our calves, we're actually calving during the presumed ice storm that was going to happen this year and the ice storm last year. So good timing. We think we need to bump it over a little further.

 

Caleb Sadler (06:33)

Yeah, push the bulls back a little bit.

 

SaraVard VonGruenigen (06:34)

Yeah, exactly.

 

Caleb Sadler (06:36)

All right, thank you. So we're joined here today on the show with three loan officers, like I said in the intro today, but one of the things that we're here to talk about today is really a relationship with your lender and relationship with Central Kentucky Ag credit. We really pride ourself on being that relationship lender and really creating the bond with the customer as we are member owned as a true cooperative model. So, Patrick, tell us a little bit about I know you're fresh here with the association, but tell us a little bit about just your take for the short time you've been here on how building those relationships is a really key role.

 

Patrick Durham (07:18)

Well, I mean, building on what my previous job entitled building the relationship to me is first and foremost, and when I interviewed and talked with the guys from Ad credit about coming over here, that was very key in the things that I spoke about and knowing a lot of people that worked for Ad credit previously, before I started the job, I knew that building the relationships was a big part of that. And I think that's what set Central Kentucky apart from other organizations is the fact that we build those relationships from start to finish, and it doesn't just end at the point we sign papers. We're always a phone call way, come by visit, we'll talk. Whether it's cattle, tobacco, hay, anything, we're there to kind of be a tool for you to use. And I think that's very important. And I've noticed it's widespread in Central Kentucky.

 

Caleb Sadler (08:20)

That's awesome. Now, John, you've been with the association the longest out of all four of us here. I've been with a credit now a little over seven years now, and I guess you could really key in and talk a little bit about these relationships because I'm sure that you've got accounts that when you made a loan when you first started here, you still service some of those loans today. So tell us a little bit about those relationships you've built over the course of time and how those are maintained.

 

John Peek (08:47)

Yeah, absolutely. I took over some accounts from some older, for some older fellows when I came in and some of those guys had already been with the association for 20 or 25 or 30 years. And I've actually got a loan I'm working on right now that I know third generation. And it's not just for that particular farmer, but also it carries on down the line. So relationships, that's all we are. In my opinion, people do business with loan officers. Not that they're not loyal to Ag Credit, but in general people do business with people. And for me, it was great to get to come back home and to get to work at Ag Credit. Because I grew up in the Lincoln County farming community. I'm a product of the extension programs and Farm Bureau and 4-H and FFA. I feel like I owe the Lincoln County Agriculture community a lot for who I am and how I got to grow up. And for me, the agriculture community in Lincoln County is a big deal and it's a big part of my life and who I am. And those are the people that I'm doing business with and they know me.

 

Caleb Sadler (10:09)

Yeah, and I would say that goes further because talking about my experiences as well, I serve on the Bourbon County Farm Bureau Board, on the AG Development Board in Bourbon County as well. And being involved in those community events like that really builds your relationship in the community. And so when those producers out there that are in the field and they need something, they're going to call in a familiar face at that point in time. And if they've got a relationship outside at another venue, then they'll probably give you a call. So there's no doubt there at all. So SaraVard, one question I would have is how do you find the right lender? Let's say you didn't have that relationship and you were a young beginning and small farmer. How do you find the right lender?

 

SaraVard VonGruenigen (10:52)

Well, it boils down to what do you need and what can they do for you. I know we run into a lot when we deal with young beginning farmers. They need guidance in which way to go and how to get there. And so you need to find a lender that can do that for you. We work with a lot of young beginning farmers and I know that the big thing that they run into often is that they can't find a loan program that works for them because they don't have the owner equity position or maybe not all the down payment that they need, things of that nature. And luckily, an institution like us, we work with programs that allow us to help them out, like with FSA, the KAFC programs. So it basically boils down to what they need and who can help them get there.

 

Caleb Sadler (11:41)

Yeah, I would agree with that. I do a lot or I see a lot of YBS customers that I work with and I think Central Kentucky Ag Credit is maybe one of the largest, largest guarantee lender in the state of Kentucky. And I really think that we're out there for the young beginning small farmer, not just them, but every farmer. One thing that we got a little agenda here that we're trying to cover and one of the items on there if you are looking for a lender would be to do your homework. So tell us a little bit, Patrick, on how some of these, if someone was looking to obtain a loan, either be farm equipment or real estate, how could they do their homework before they came in and meet with us across the desk?

 

Patrick Durham (12:27)

I mean, definitely any good producer is going to do their homework before they come in and meet with us. I call it shooting in the dark or shooting arrows at a blind target, whatever you want to call it. They're going to put down, they're going to pencil out some ideas and look up their interest rates compared to other places. They're going to have some ideas and prices and stuff that they're going to need. Just check, make sure we're where we need to be. Once they come in. They need to have their records on hand, good record keeping, balance sheets, three years tax returns, business plan, if they have one. If they don't have one, they need to work on getting one, especially those young farmers. It's good to start early on doing that. Those programs, as I was growing up, we're heavily involved in 4-H and FFA programs and the reason they do those is continuation on through your career in agriculture. If they bring those things in, it makes our job a lot easier. We're able to do a lot better job servicing them and giving them what they want and speeding the process up. I just recommend just have an idea of gameplan, what you want, what you need and how you want to get there and let us kind of take it from there and then we can put the pieces together.

 

Caleb Sadler (13:55)

Having that end goal and what you want to accomplish is very key and oftentimes we see a lot of producers that will come in and try to get a loan and they just don't know exactly what their true end goal is. And I think it is good to have that and know exactly what you're looking for.

 

Patrick Durham (14:13)

And I think too to add to that going forward with the current prices and stuff that we have inputs and stuff that's going to set people apart, doing those records and having those plans, those producers that are able to do a good job of managing their operation, that's what's going to set them aside and get them over this home.

 

Caleb Sadler (14:34)

If you listen into our first podcast on Beyond Agriculture, we got in and talked a little bit about equipment values and if you're familiar with equipment options and new equipment right now, I mean, the prices are elevated and really it boils down to making sure you keep good records on that end of it to be able to track that kind of stuff. Because you get into a used piece of equipment and you're constantly having repair bills, it's probably time to look about maybe upgrading that. So we've talked a little bit about some of the stuff, about preparing to come in and maybe talk with us about a loan. John, let's say we had a borrower or an applicant that was looking to come in and maybe look at a real estate loan. Is it better to have a property in mind already before they come in, or is it better to be kind of pre approved on that end of it?

 

John Peek (15:25)

We can sure look at it both ways. I like it when they actually have a property in mind, but I also appreciate I have people come in sometimes and they say, look, I'm thinking about trying to buy a property. I've got this in mind, this type of property, and say it's a $200,000 property, then I can tell them how much down payment they need. We can look at cash flow, we can look at their ratios and et cetera, et cetera. So that's not a bad idea either, I would just say because this real estate market is hot still and there's a lot of competition out there, so you probably want to get out there early and try to get pre approved if you're really serious about buying a piece of property, because some of these properties are going fast and some of them there's quite a bit of competition for them.

 

Caleb Sadler (16:13)

Yeah. In our market that we see is I'm out of the Paris office, so I see some deals out of Winchester and Georgetown and Lexington, and those are places that if you find like a ten acre lot and SaraVard, you could probably talk a little bit about this. It seems like if you're not preapproved and you don't put a full list offer in, you're behind eight ball at that point in time. Is that the same way down in Stanford? Are you all seeing things like that?

 

SaraVard VonGruenigen (16:41)

Yes. I don't know if it's as hot as it is above the river, as we say, but it still is. And so we've seen a lot of deals where they'll come in and even offer more than what they've even listed for it, and then there'll be 10,000 more, 15,000 more. So, yeah, we've seen that kind of interest around home as well.

 

Caleb Sadler (17:03)

So you brought up a good point there. Without borrowers or offers coming in above purchase price or what's list price is. Does that affect any on the appraisal side that you see?

 

SaraVard VonGruenigen (17:17)

It could. I know at first whenever this market started hitting right, honestly, it kind of happened the beginning, COVID that's when I first started noticing it in my office, the appraisers were having a hard time finding the comps because the demand was obviously there because multiple people put in and they had to offer more. But then the comps weren't out there in the past because they look at these comps for six months to a year back. Traditionally, as it sits today, it's probably not as big an issue as it has been maybe a year and a half ago. With appraisers, it'll be interesting to see what the future holds as well.

 

Caleb Sadler (18:01)

And I'm only going to ask from a listener standpoint, when you refer to comp sales, would you explain that a little bit more?

 

SaraVard VonGruenigen (18:08)

Yeah, sorry, I'm talking the lingo, expecting everybody to know it. It's kind of pompous of me, isn't it? So what it means is whenever an appraiser goes out there and tries to value a property, they look at like type properties in the same area, the same type soils. If that comes into play, if it's a farm, they just look at the general area and try to find, OK, this is similar to this property and how did it sell, and then they compare from there.

 

Caleb Sadler (18:36)

Okay, good deal. So Patrick, you touched on this before and I'm going to have you reiterate it. That way we'll get a clear picture. But if you were coming in for a purchase, if you were looking for a loan, what are those key items again, that list out in a separate segment on what they need to come in prepared with to obtain a loan?

 

Patrick Durham (18:57)

When you come in and you're looking to purchase some land or a larger volume type item, you need to come in, be prepared to fill out a balance sheet with your financials and everything.

 

Caleb Sadler (19:11)

One thing I will ask there to explain the balance sheet a little bit just for the listeners. That way we want to educate and that's what this podcast is about. Tell us a little bit about what a balance sheet does for us and for the borrower.

 

Patrick Durham (19:25)

It's basically just kind of an overview of what your financials are. It's going to list your assets, how much cash you have in the bank or you have available, what kind of loans you have out there as far as what you owe on some of those credit cards, bank loans, equipment loans, anything like that. Items that you have as far as trailers, wagons, farm equipment that may be paid off. We put all that together into a balance sheet and that gives us a good idea of where financially you stand when we can base our loans off of that.

 

Caleb Sadler (20:04)

One thing, and this is only speaking from experience there, but whenever I take a balance sheet with a borrower, they assume that if they owe money on it, they don't list it on the asset. That's not correct. And John, tell us a little bit about why that is the case.

 

John Peek (20:21)

Well, I'll just add to when I talk to people about balance sheets. They get the deer in the headlights look. I'm like, look, take a piece of white paper, draw a line down the middle on the left hand side, make a list of everything you own, and then on the right hand side, make a list of everything that you owe. Make sure that there's something on the left hand side for anything that's listed on the right hand side. So you want to make sure that you are getting credit for having an asset for any debt that's out there.

 

Caleb Sadler (20:48)

Yeah. For instance, if you owe on a tractor, and let's say you owe the last payment of $3,000, for instance, and that tractor was 40 or $50,000, we want to give you the equity that you've got in that tractor because it's going to build some equity on the balance sheet.

 

John Peek (21:01)

And one misconception people have is if they list something on the balance sheet, we're going to try to take a lien on it.

 

Caleb Sadler (21:05)

Yeah.

 

John Peek (21:06)

And that's not the case. We're trying to assess your net worth, basically your credit standing in general, just your financial position. So we're not looking at a list of things to take a lien on.

 

SaraVard VonGruenigen (21:20)

One thing I see folks forget to put on there a lot is their 401K. Yeah. Because they put money in it and they forget about it. But it's a big asset that a lot of folks have because a lot of times I'll ask, do you have 401K or IRA or stocks? Oh yeah, I do.

 

Caleb Sadler (21:35)

Yeah. Really, in our territory, in our market that we service, that is a really big asset because the primary people that we service are probably part time farmers, so they have a job off the farm where they're contributing to a retirement account. And a lot of times, if they are an older member or borrower, those accounts have some size to them. So there's no doubt. Yes. I get that a lot though, John, with the people that think that borrowers that think that just because we're going to lift it out and build an equity position, we want to take a lean on it, that's definitely not the case.

 

John Peek (22:08)

I'll say, do you have anything else? Yeah, but I don't want to put it on.

 

Caleb Sadler (22:11)

Yeah, no, that's exactly right.

 

SaraVard VonGruenigen (22:13)

I hear it happen a lot, too.

 

Caleb Sadler (22:14)

Yeah. To kind of go back and touch on this. I know that we were talking about building relationships there before and starting in the communities, but one thing that we kind of missed when we talked about that was word of mouth. And I'll let whoever wants to open up talk a little bit about that because I think that's one of our bigger marketing tools that we have in the shed is word of mouth and your experience that you've had with Ag Credit, because that's going to go a lot further than anything else. So somebody go ahead.

 

John Peek (22:44)

I don't care talking about it a little bit and I'll back up a little bit. I didn't say anything about my family, but I've got two kids right now and they're in high school and middle school, 16 and 13, so I'm out and about it, all those type of functions too. My daughter's involved in FFA, but I think when people come in, add credit, they're going to be impressed with the amount of knowledge that there is behind the desk. We have a lot of people come in, or I have a lot of people come in and they start telling me about their cattle operation or a little bit something about a piece of equipment, and then I make a comment or add something to it and they're like, Oh, you know about that. And we do, we know not everything about everything, but we are agricultural people for the most part. And when people who are involved in agriculture have tried to do business at commercial banks, they sometimes have had a hard time communicating just about their operation and what they're trying to accomplish. But I feel like we have a real leg up understanding what people are doing and what they want to do and helping them out with that.

 

Caleb Sadler (23:49)

Yeah, I would call it. And I know that there's people at Ag Credit that don't farm or that are removed a little bit from the farm, but I always look at Ag Credit is really farmers helping farmers at.

 

John Peek (24:00)

No doubt about it. And there goes your word of mouth.

 

SaraVard VonGruenigen (24:03)

Yeah, and that's the big thing about farmers, too. My husband needs deep and farming. He loves it, breathes it since he's a little kid. But it's funny to me, whenever he wants to learn something or he needs to know something, what's he doing, he asks another farming friend. And so that's where word of mouth comes into play for us as well, because they trust each other more than they trust anything else, it seems like, in that farming community and these local.

 

Patrick Durham (24:32)

Previous years working in the stockyard industry and livestock, there's no better place other than your local Hardees or McDonald's where farmers talk.

 

Caleb Sadler (24:41)

Every community has got one.

 

Patrick Durham (24:43)

And I've heard those guys talk, and a lot of times they will talk about their financial, the people that they deal with, and they talk a lot. And the word of mouth is big. So those experiences really do play out once those people start talking about Ag Credit and stuff.

 

Caleb Sadler (25:03)

No, I agree with that totally. So one thing that John talked on there, and I'm going to let Sarah explain a little bit more about it, and we've talked about this in the first episode of Beyond Agriculture, but really what the true difference is between Central Kentucky Ag Credit and a regular commercial bank and really tell the listeners what the difference is and what the benefits are to Ag Credit versus a standard commercial bank.

 

SaraVard VonGruenigen (25:29)

When we were created, we were created specifically for farmers. We were meant to be there for the good times and the bad because we were created basically during the Depression area era when a lot of farmers saw commercials, banks just back up from them and not help them out at all. So that's what our intentions were for us. So that's primarily why we're here. Whenever some farmer comes to us, we've got products that are tailored for them. The payment plans are tailored for them, like John touched on. We've got people who understand what they do because we do it ourselves. So there's just a whole other level. There an understanding and appreciation. When times are tough, we understand that, too. We can talk through it and we can walk through it together. When times are good, we can celebrate together because we all understand that we're in the same boat.

 

Caleb Sadler (26:19)

One thing that's just recently happened would have been our patronage day and where we've passed out checks to the members and borrowers. And one of the benefits talked a little bit about that benefit from a cooperative model and the dividend that they just received back.

 

SaraVard VonGruenigen (26:34)

Yes. So one thing about us, we're traditional cooperative. We're kind of a dinosaur at this point. There's not many left.

 

Caleb Sadler (26:41)

Yeah, there really is not many left.

 

SaraVard VonGruenigen (26:43)

Our borrowers own a little part of us. While they're with us, they can vote on our board members, and then also they're privy to a little passionate refund or dividend, however you want to call it, for being part of the co op. I think a lot of our farmers are our borrowers. They just really appreciate having a say in how this place has ran and owning a part of us and being part of, like I said, a dying tradition.

 

Caleb Sadler (27:10)

Yes, that's correct. And we've paid back a dividend. Now, this marks the 25th year that we returned one back, and it's a record year for 2021. I mean, from the association standpoint, record year. So that's awesome. One key that kind of going back into leads into our next segment that we've talked about consistently is communication and communication with your lender. And John, tell us why that is so important from a listener standpoint of why communication with your lender is so vital.

 

John Peek (27:45)

Yes. If you come and talk to us, we'll do our very best to work with you. And that's whether you're needing something new. That's whether you have a payment that's a little past due. No matter what's going on, we don't know where you're at unless you tell us. The only thing we can do is assume, and that's a bad situation to be in as a lender. It's unfortunate, but sometimes we have to assume the worst. So we have rules and regulations that we have to go by, and if you don't contact us, we just have to go down that road. But fortunately, basically most of the time, if there's any way you can pay, we'll try to work that out for you. If you've got a good plan, if it's feasible, we'll sure work with you.

 

Caleb Sadler (28:32)

Yeah, I think that goes back to the relationship lender tool. So we talk about that from a borrower standpoint. But how critical is communication with your lender from, let's just say, a new applicant walking in the door and communicating with them through the loan process? How critical is that

 

SaraVard VonGruenigen (28:52)

It's very important because especially as a new borrower, they're getting to know us and we're getting to know them, and it's important to lay everything out there. This even if we're talking about the balance sheet, don't be scared to give us information about your balance sheet. It doesn't mean anything bad. And then also the same way if somebody kind of thinks that they've got something that may be an obstacle, just go ahead and tell us. And the other thing I like to talk to about customers is often, just like earlier, I was using the terminology and stuff that people may or may not know. I tell my customers, there's no silly questions. You ask me whatever you feel like asking, because I think about young SaraVard before I started working Ag Credit, 20 years old, 22 years old, and all the things I didn't know about financing and how it worked and how all that was just laid out. And so how are we to assume that everybody will know everything inside and out about the financial world?

 

Patrick Durham (29:54)

I'm 44 years old and just new to this industry. And believe me, yes, I didn't know half of what I think rephrase that I don't know exactly. How do I say it?

 

SaraVard VonGruenigen (30:09)

You're learning.

 

Patrick Durham (30:10)

Yeah, I'm learning. Sorry.

 

John Peek (30:11)

Sometimes you don't know what you don't know.

 

Patrick Durham (30:13)

Yeah, that's exactly it.

 

Caleb Sadler (30:15)

They always say the only stupid question is the one that's not right. And I think that is really important. Even if a borrower doesn't know or an applicant doesn't, don't be afraid to ask a question. I mean, because that's what we're here for. We do it every single day and we're going to help you.

 

SaraVard VonGruenigen (30:34)

There's no embarrassment there. But if it's not your bread and butter and you're not doing it every day, then how are you supposed to know everything about it?

 

Caleb Sadler (30:39)

That's right.

 

John Peek (30:40)

That's what we're here for, to help you through that process.

 

Caleb Sadler (30:42)

That's right. And I think that feeds into having those good relationships really make a really long standing success in a long term relationship. So having that open communication really feeds into that. And John, I know you've been here the longest out of the four that are on here today with us. Tell us a little bit about how those good relationships and those good communications has led to long term success.

 

John Peek (31:07)

But we were talking earlier about word of mouth and my borrowers are my best advertisements. The majority of my borrowers are referred by somebody else. The majority of my new business I get now today is a referral from somebody else. So and so downstairs told me to come talk to you because you did this for them. The relationship is what it's all about. Like I said, we have people who come in from our website, we have a lot of social media, we get some people who are just calling out of the blue, but the majority of the people in our community, because we serve such a small area, we're not a great big lender, we're a small regional lender. And that word of mouth is invaluable.

 

Caleb Sadler (31:47)

Communication, like you were saying, even in the bad and the good times, if you're having a hard time, tell us about it.

 

John Peek (31:54)

Absolutely.

 

Caleb Sadler (31:54)

We're here for you. At the end of the day as a lender. We're not your enemy, we're your friends.

 

John Peek (32:00)

Well, and I've been in situations in my career. I've been here 20 years and there's been some good loans and some bad loans. And I feel like some of the biggest ways that there's been a few people that I've helped tremendously by being able to plan a good exit strategy from farming because it wasn't going well, or maybe they just decided it was time to get out. But there's a lot to be said for communication in that area. If it's not going well, if you let us know early, we can help you a lot more than if you let it go over a period of time. There are times, especially with annual payments, there may be a problem for six months and we don't really know about it because there's not a payment due, but when the payment comes due, it all comes to light. So you're better off to go ahead and tell us about it and then we can work with it from there.

 

Caleb Sadler (32:50)

Yeah. And from that end of it, when you're talking about the lending process or the borrowing money process can be intimidating from a borrowing standpoint. But don't be afraid, the lender is there for you. We're going to be that trusted source of information that you're going to need to make your decision at that point. I know we've kind of covered our agenda here today. We'll just kind of open it up. Patrick, tell us. Here at Central Kentucky Ag Credit, we refer to it as the north and the south as, like SaraVard said, north of the river and south of the river since we only cover 17 counties in Central Kentucky. So as I alluded to earlier, the three individuals that I have with me today on the podcast John Peek, Patrick Durham and SaraVard VonGruenigen, whenever the podcast goes to the Southern offices, if we have someone to interview or something like that, they're going to pick it up from that end of it and be the host of the show for that day. So I really appreciate you all coming on and joining us here today and really introducing yourself because you all will be, I guess you could say, the southern voice of Beyond Agriculture.

 

SaraVard VonGruenigen (34:05)

We'll have more twang than you?

 

Caleb Sadler (34:06)

That's right. Yeah, that's right. I'm about as far north as you can go in the whole territory. But you're absolutely right. So thank you for listening in to Beyond Agriculture, and I really appreciate all three of you being with me today. So be sure if you're listening to subscribe and rate the podcast. And thank you again.

 

Speaker 5 (34:28)

This episode of Beyond Agriculture is brought to you by Central Kentucky Aggregate. Thanks for listening to the podcast. Be sure to visit agreditonline.com. Com Beyond Agriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.