Iowa Soybean Review, January 2015 by Iowa Soybean Association

Iowa Soybean Association, 1255 SW Prairie Trail Parkway, Ankeny, Iowa 50023

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SURVIVOR TIPS FOR MINIMIZING RISK

TIGHTENING MARGINS: January 2015

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Iowa Soybean Association

January 2015 | Vol. 27, No. 4

12 Survivor: Grain

16 Equipment Equations:

Agricultural lenders are channeling their inner Boy Scout telling grain farmers to be prepared.

Tightening margins are causing many Iowa farmers to look for places to save a little money and minimize risk.

Farmers Prepare for Tough Times

14 The Price is Right Farmers and landowners work to establish fair rental rates as commodity prices decline.

Buy Share or Custom Contract

18 Survival of the

Financially Fittest Lessons

learned from the 1980s farm crisis.

About the Cover: Tightening margins are causing many Iowa farmers to look for places to save a little money and minimize risk. Lowell Garrett of Adel works on equipment maintenance in his own on-farm shop.

Bringing stories to life. There has never been a more exciting time to be involved in the agricultural industry and we look forward to showing you why with IOWA SOYBEAN ASSOCIATION LIVE — an app that brings stories to life in the Iowa Soybean Review. In three easy steps, you’ll get a more in-depth look at Iowa soybean farmers and stories that affect our lives.

Get the ISA LIVE app. Download it to your Apple or Android device by searching for IOWA SOYBEAN ASSOCIATION LIVE from your app store. Its free!

Once downloaded, start the app and hover over any photo that includes the ISA LIVE icon with your mobile device and the movie will begin to play.

Watch as exclusive stories come to life.

Iowa Soybean Association

EXECUTIVE review Kirk Leeds Chief Executive Officer Iowa Soybean Association kleeds@iasoybeans.com Twitter@kirkleeds

Bigger Dreams By now most of us have already forgotten most of our New Year’s resolutions and have fallen back into many of the same bad habits that we resolved to address in 2015. A pattern of behavior that inflicted us in 2014 and will likely happen again in 2016. But why is that? Why is it that regardless of best intentions, we too often fail to make the changes that we felt so strongly about when the calendar turned to a new year? Perhaps part of the reason is that we were never really committed to making the change in the first place. It sounded good at the time, but we didn’t invest the necessary effort to think through what it would take to truly be successful. After all, a goal without a clear understanding of the necessary strategies and tactics is just a dream. And a dream without a plan usually remains just a dream. But perhaps the other reason is that we didn’t take the time to really wrap our heart and soul around what success really looks like. Did we paint such a powerful picture

of what it is we hope to accomplish that it has become ingrained into everything we do so that it’s on our minds when we get up in the morning and still there when we go to sleep at night? So perhaps the dream of the “new you” was just not big enough to capture your imagination and inspire you to greater heights. At the Iowa Soybean Association (ISA), we have learned that dreaming bigger dreams is critically important if we hope to remain a relevant partner to Iowa’s soybean farmers in the months and years ahead. Twenty-fifteen promises to be a challenging year for Iowa’s farmers as we deal with lower prices brought on by large crops in the US and around the world. With our overarching goal to “improve the competitiveness of Iowa’s soybean farmers,” I am confident that we will live up to our vision statement that states that “ISA is recognized for excellence in enhancing the long term sustainability of Iowa’s soybean farmers.” Let’s dream big dreams in 2015.

American Soybean Association Directors Ray Gaesser, Corning Dennis Bogaards, Pella Wayne Fredericks, Osage John Heisdorffer, Keota Mark Jackson, Rose Hill United Soybean Board Directors Laura Foell, Schaller Delbert Christensen, Audubon Larry Marek, Riverside Jim Stillman, Emmetsburg

For advertising information in the Iowa Soybean Review, please contact Larson Enterprises, (515)440-2810 or larson6@mchsi.com. Comments and statewide news articles should be sent to the above address. Advertising space reservations must be made by the first day of the month preceding publication. In consideration of the acceptance of the advertisement, the agency and the advertiser must, in respect of the contents of the advertisement, indemnify and save the publisher harmless against any expense arising from claims or actions against the publisher because of the publication of the content of the advertisement.

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Farmers adopt technology

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The Iowa Soybean Review is black white no gradients published eight times a year by: BLACK WHITE C0 M0 Y0 K0

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Iowa Soybean Association 1255 SW Prairie Trail Parkway, Ankeny, Iowa 50023 Phone: (515) 251-8640 Web address: www.soybeanreview.com watermark E-mail: aclinton@iasoybeans.com

Iowa Soybean Association can also be found on these sites:stacked logo (for sharing only)

ISA Policy Director Carol Balvanz invites farmers to join her at the Iowa State Capitol in Des Moines during the 2015 Legislative session.

Policy Competitiveness? Trust Your Gut By Carol Balvanz, Policy Director

Farmers have always known they need to compete with each other to stay in business. Ag and other industry groups have always competed with one another to pass legislation that favors their members. Over the past few years, however, industry groups have competed less with each other, and unfortunately, more with the rising skepticism about farming and farmers. Challenges come from all sides, and often make it into legislation and regulation. Farmers have multiple technology tools to help them make decisions and monitor results. But as we look at the “competitive” policy horizon, we see a number of issues that may not appear to directly impact soybean farmers, but if allowed to go forward without our input, could cut a big hole in our bottom line. I hope farmers are doing their homework and studying information from a wide swath of sources. I also hope that as we read, we pay attention to our gut reaction as to how these issues might impact our future success. Back in 2009, Iowa soybean farmers voted in a policy to maintain the reach of EPA’s enforcement of the Clean Water Act to “navigable” waters. At the time, such policy may have seemed somewhat unnecessary. Yet this past year, the proposed Waters of the US Rule has shown us how important long range vision can be. We are currently facing higher taxes on coal fired power plants and signing onto climate change treaties that transform our trade and transportation options. Soybean production is never mentioned in those proposals, yet these proposals will impact our electrical, transportation and overall production costs, making us less competitive. Even the continuing limbo of the “tax extenders” bill makes it difficult for farmers and agriculture businesses to execute

business plans with long term success. At Iowa Soybean Association (ISA), our job is to constantly scan what may seem like the far horizon and think about possible soybean producer impacts. As we meet with our newly elected state and federal representatives and senators in the next few months, we must present the case that Iowa agriculture in general and Iowa soybean producers in particular, can only be competitive if lawmakers and regulators share our long term view and don’t shackle us with over regulation, increased taxes and a general lack of respect for private property rights. We have to help them understand our gut reaction to these issues and encourage them to develop the same sense. Industries often lose their competitive advantage a little piece at a time, often through not recognizing those issues that appear unrelated to their immediate future. The size of chicken cages will loom large in Iowa’s poultry and egg industries, one of our major customers. The change this ruling brings to states’ ability to alter the Commerce Clause may be even bigger. Allowing EPA to use biased, unscientific information to eliminate a farming tool such as neonicotinoids, sets a dangerous precedent for future chemical availability. Protecting our electric grid and even keeping nutritionists from making recommendations based on perceived environmental harm join the list of issues that may figure into our future. Competitiveness requires continued vigilance for those possible pitfall issues as well as constant contact with all those decision makers who may have competing agendas. Farmers have always trusted their gut instincts. Let us know when yours kicks in. J A N U A R Y 2 0 1 5 | S OY B E A N R E V I E W. C O M | 5

Linking Iowa soybean producers to global markets

AGP’s Export Terminal Port of Grays Harbor Aberdeen, WA

Photo by Marc Sterling

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SOY TALK

Strong soybean yields begin with seed selection A successful soybean harvest is the reward for making good decisions amid many conditions to produce ideal results. Growers make some of those choices, such as treatment approach for weeds or insects, during the season. Other decisions, such as seed selection, need to be made months before the crop goes into the ground. With so many seed options available to farmers, making the smart choice requires doing some homework. Justin Dillon, Mycogen Seeds agronomist, says many considerations for soybean seed “Look at the products choice revolve around how well out there and review seed varieties perform in local literature to see conditions.

which varieties have

“A lot depends on agronomic better ratings” characteristics available based on local disease pressures and their adaptability to the soils,” Dillon says. “I encourage farmers to look at the products out there and review literature to see which varieties have better ratings for their particular pressures to address their problems head on.” He encourages farmers to consider local data to determine which varieties have performed well in the area. “It’s about picking out a soybean variety that’s a good match, including considering local plot information and local success stories within a given geography,” Dillon adds. He advises farmers to make their seed selection decisions early to be sure their preferred varieties are in adequate supply. Seed delivery is changing, too, Dillon says. More growers are ordering super boxes, which are hard-sided containers holding 50 units of seed, offering increased convenience, safety and efciency. Many seed tenders, Dillon says, are designed to work with the larger bulk containers. “As growers plant more acres, they’ve found that bulk seed is often a better option,” he says. “Equipment is getting larger. Some planters can hold 250 to 300 units of seed, so bulk handling is becoming a necessity.”

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FEB.19 | AMES, IA Iowa farmers, agronomists and others interested in using the results of crop production and environmental research to improve their competitiveness and profitability are encouraged to attend the Iowa Soybean Association (ISA) Research Conference. The event will be held Thursday, Feb. 19, 8 a.m. to 5 p.m. at Iowa State University’s Scheman Building in Ames. Registration is open at www.isafarmnet.com. Nearly 40 breakout sessions and a variety of experts will headline this year’s conference, formerly the On-Farm Network® conference. They will include representatives of ISA’s OnFarm Network, Environmental Programs and Services (EPS) and Analytics teams, academia and industry. “This is the conference where farmers come together and talk about current research that directly bolsters soybean productivity and improves environmental quality,” says Roger Wolf, ISA EPS director. Topics to be addressed include crop, nutrient and pest management, the Iowa Nutrient Reduction Strategy, soil and water quality, sustainability, cover crops and technology. There will be several farmer-led panel discussions along with researcher-led presentations. Certified crop advisors will be eligible to receive credit for sessions attended. An attendee dinner and forum will precede the conference on Feb. 18 from 5:30 p.m. to 9 p.m. at the Gateway Hotel and Conference center in Ames. “There is always something cutting edge at the conference,” says Tom Oswald, ISA president and conference attendee. “I come home with information that helps me understand new innovations in technology and practices.” Registration prior to Feb. 5 is $50 for trial participants and $100 for non-participants; after Feb. 5, $100 for trial participants and $125 for non-participants. The dinner on Feb. 18 is $20 for all attendees. For additional event information or to register, visit www.isafarmnet.com or call 515-334-1033.

YOU WERE MEANT FOR THIS. When all the planting, feeding and protecting grow into more than just your yield. More than a job well done — it’s a realization. That this is what you were meant to do. We’re with you. It’s what Mycogen Seeds is all about. A shared passion for the life of your land. For the life that you love. Visit

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IOWA SOYBEAN ASSOCIATION RECOGNIZES AGRICULTURAL, ENVIRONMENTAL LEADERS FRIEND OF THE IOWA SOYBEAN FARMER BILL NORTHEY, Iowa Secretary

of Agriculture, Spirit Lake

The state’s top agricultural chief, a high school senior preparing to study agricultural business at Iowa State University and a nationally respected leader in soil and water conservation were recognized by the Iowa Soybean Association (ISA) for their dedication to Iowa’s farmers and the soybean industry. Receiving ISA leadership awards during a banquet held in conjunction with the ISA’s 50th Anniversary Symposium were: • FRIEND OF THE IOWA SOYBEAN FARMER: Bill Northey, Iowa Secretary of Agriculture, Spirit Lake

RISING STAR

MACY MAREK, Washington

• RISING STAR: Macy Marek, Washington • NEW LEADER: Julie Kenney, Nevada • ENVIRONMENTAL LEADER: Tim Smith, Eagle Grove • LEGACY OF LEADERSHIP: Curt Sindergard, Rolfe

NEW LEADER

JULIE KENNEY, Nevada

ENVIRONMENTAL LEADER TIM SMITH, Eagle Grove

LEGACY OF LEADERSHIP

CURT SINDERGARD, Rolfe

The Friend of the Iowa Soybean Farmer Award, sponsored by Farm Credit Services of America, was presented to Bill Northey, Iowa Secretary of Agriculture and a fourth generation farmer from Spirit Lake. Northey’s priorities as Secretary of Agriculture have advanced science and new technologies to better care for our air, soil and water. He also reaches out to Iowans to share the story of Iowa agriculture. Each year, Northey travels the state to better understand the needs of farmers and determine how he can better lead the Agriculture Department and its service to Iowans. The Rising Star Award, sponsored by Cargill, recognizes an ISA member’s son or daughter who’s active at the local, state and national level and preparing to continue ag studies in college. Marek is a senior at Washington High School and is the sixth generation on her family's diversified livestock and grain farm. She is a member of the Washington FFA and has participated in a program that gives students the opportunity to learn firsthand production practices for raising corn and soybeans. Marek is also involved in Business Professionals of America and is employed at Bazooka Farmstar. She will be attending Iowa State University next fall and majoring in agriculture business.

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The New Leader Award, sponsored by DuPont Pioneer, recognizes an ISA member’s outstanding involvement and commitment to promoting the soybean industry and agriculture. After a decade of working in communications for DuPont Pioneer, Kenney recently took on a more active role with her husband Mark on their Story County family farm. She’s also a volunteer with CommonGround — a group of female farm bloggers across the nation — and was a featured panelist for the U.S. Farmers and Ranchers Alliance Food Dialogue event at the World Food Prize this fall. She has also hosted farm tours and participated in national media tours to discuss modern farming practices with consumer audiences. The Environmental Stewardship Award, sponsored by Monsanto, was awarded to Smith for his commitment to conservation and championing water quality practices. In 2011, Smith became involved with the Mississippi River Basin Initiative program through the Natural Resources Conservation Service. He has implemented cover crops, strip tillage, Prairie STRIPS and nutrient management practices on this farmland and installed a bioreactor to reduce nitrate levels in water moving across his land. Smith is an advocate for implementing practices that improve environmental performance and frequently hosts tours and participates in farm forums to share his personal and practical experiences. The Legacy of Leadership Award, sponsored by Stine Seed Company, was presented to Sindergard for 18 years of service on the ISA board. During his tenure, Sindergard served on each of the association’s four board committees and held the offices of president, presidentelect and treasurer. He was involved in numerous soybean-related boards and committees including the American Soybean Association, Soy for Life Foundation, Environmental Stewardship Foundation and the Federal Crop Insurance Corporation. Sindergard provided vital leadership and insight during his years of service on the board and contributed to setting forward thinking objectives to improve the competitiveness of Iowa’s soybean farmers.

LEEDS CELEBRATES 25 YEARS As the Iowa Soybean Association (ISA) celebrates its 50th anniversary it’s CEO, Kirk Leeds, was recognized for being there for half of it. Leeds celebrated his 25 years of service at the ISA 50th Anniversary Symposium and Banquet on Wednesday in Des Moines. “I am humbled by the recognition and I have appreciated the opportunity to work for the Iowa soybean farmers for the last 25 years,” Leeds says. “I’m proud of the way farmer directors have so willingly contributed time and energy to set the direction for ISA and for our industry.” To say that Kirk Leeds has had an impact on ISA would be a glaring understatement. “We’ve seen a lot of great things happen and we have to believe Kirk helped a lot along the way with his vision and expertise,” says Tom Oswald, President of ISA and a farmer from

Cleghorn. “It’s quite the organization we’ve built over time. It’s nice to have been working alongside him for a number of years on the journey.” Highlights of Leeds’ tenure include the recently founded Iowa Soybean Research Center at Iowa State University and the creation of two of ISA’s most successful programs, the On-Farm Network® and Environmental Programs and Services. These departments provide Iowa soybean farmers unbiased research and brought water quality to the forefront in agriculture. Starting as a field representative in 1989, Leeds would quickly work his way to CEO. He says he never anticipated spending 25 years at ISA, but it is an organization he has thoroughly enjoyed. “I have gained many friends and the amount of respect that I have for farmers based on their desire to do the

KIRK LEEDS, ISA CEO

right thing for the right reason has only increased over the years,” he says. Leeds says the greatest ISA accomplishment during his tenure is the growth of the soybean industry in Iowa, the United States and globally. A respected leader throughout the agricultural industry, he looks forward to the continuing ISA’s success in the next 25 years. “We’re entering a new, very competitive era for soybean farmers,” Leeds says. “ISA will remain relevant to Iowa farmers as we continue to bring the insight, knowledge and perspective on issues that affect their bottom line.”

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Investing Checkoff Dollars

SURVIVOR G r a i n fa r m e r s p r e pa r e f o r t o u g h t i m e s

By Matthew Wilde

gricultural lenders are channeling their inner Boy Scout telling grain farmers to be prepared. When times get tough, and that appears to be the case for the foreseeable future, financial experts say producers need to be proactive to survive. That includes meeting with their lender to formulate a plan to navigate what could be a bumpy economic road ahead. After several years of supply and demand working in favor of soybean and corn farmers, the tables have turned. Record harvests of both crops mean tight supplies and profitable prices are no more. Commodity analysts expect grain margins to be razor thin or nonexistent — most likely the latter unless farmland is debt free — for at least two years, maybe more. Supporting a family or even paying bills on grain receipts alone will be a challenge. But by no means should farmers panic, says Jim Knuth, senior vice president of Farm Credit Services of America (FCSAmerica) who heads up Iowa operations. Most grain farms are on solid financial ground after several years of historic profits and there’s several things producers can do to make it through the latest downturn. “We’re trying to be a calm voice,”

Knuth says. “We don’t want producers to overreact or underreact. “Producers need to take time to do a thorough assessment of their current financial position,” he adds. “Once they understand that, be proactive in making decisions. This will be a time of mutual adjustment between producers, suppliers, landlords and lenders.” FCSAmerica is a customer-owned cooperative serving more than 50,000 farmers and ranchers in a four-state area. Loan volume increased by $793.5 million to $21 billion during the first nine months of 2014, according to a financial earnings release. The cooperative is well positioned to meet the financial needs of its customers as the agriculture sector responds to changing markets, the statement says. Excellent yields will allow some farmers to “bushel through” this marketing year’s price scenario, along with savvy marketing, Knuth says. The U.S. Department of Agriculture (USDA) projects the season-average soybean and corn price at $9 to $11 per bushel and $3.20 to $3.80, respectively. Iowa State University (ISU) Extension and Outreach pegs cost of production for soybeans this year at $11.02 per bushel at 55 bushels per

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acre, which includes land and other inputs. Break even for corn following soybeans is estimated at $4.24 per bushel at 185 bushels per acre. Some producers pre-sold all or a portion of their 2014 crop at profitable prices last spring. “We have people still making money, but that’s not everyone,” Knuth says. “Sit down with your lender and talk about where you are at, where you are going and what options are available.” Producers who reinvested profits in land the past few years may need to re-amortize real estate debt, Knuth says. Ten- or 12-year notes may have worked with $6 corn and $12 soybeans, but 20- or 25-year loans may be needed now to make operations cash flow. Refinancing equipment is also an option, Knuth says. If farmers paid cash for a new tractor or combine in the last couple of years, they may now need the equity. Farmers need to thoroughly assess cost of production to take advantage of opportunities to make a profit or minimize losses, according to Chad Hart, ISU Extension grain economist. He expects similar production costs for 2015 as this year so input adjustments may be needed

Investing Checkoff Dollars

along with negotiating lower rents with landlords. “Target a price and be ready to jump on it. These are not the markets farmers enjoyed in 201013,” Hart says. The average Iowa farm price for soybeans during the last two marketing years was $14.40 and $13.10 per bushel. For corn, prices averaged $6.92 and $4.49 per bushel. Dangerously low grain stocks and excellent demand were the catalysts. But the cupboard is no longer bare thanks to monster soybean and corn crops. U.S. farmers harvested nearly 4 billion bushels of soybeans and 14.4 billion bushels of corn, according to November USDA crop production estimates. Up 18 percent and 3 percent, respectively, from last year. The USDA in December projected 2014/15 soybean ending stocks at 410 million bushels, up from 92 million last year. Corn ending stocks are estimated at a little less than 2 billion bushels, up from 821 million two years ago. Excellent demand paced by record soybean exports — USDA projects 1.76 billion bushels this marketing year — propped up prices during harvest, but analysts expect values

to retreat possibly below USDA projections when the South American crop is ready. “The pipeline is getting full,” Hart says. “Even with record demand, market prices just can’t stay up. It will take some time to churn through these massive supplies.” Barring weather and production problems in the U.S. and South America, analysts foresee a similar supply and demand and price picture this year and for 2016. Some predict the 2015 U.S. soybean crop could be several million acres more than the record 83.4 million harvested in 2014 since soybean prices haven’t dropped as dramatically as corn and soybeans are cheaper to grow. Experience will help most producers survive the latest downturn in commodity prices, says Bruce Clark, business development officer for GNB Bank in Grundy Center. Ag financial experts can help farmers cut expenses without sacrificing bushels and identify ways to make operations more efficient, he says. Restructuring debt and analyzing cash flow are other things GNB Bank concentrates on. “Use marketing tools to manage risk and maximize what the market provides,” Clark says.

SURVIVOR TIPS: ONE: Farmers need to

meet with their lender to formulate a plan. TWO: Determine cost of

production and market accordingly.

Refinancing debt is an option. THREE:

PRODUCERS NEED TO TAKE TIME TO DO A THOROUGH ASSESSMENT OF THEIR CURRENT FINANCIAL POSITION. — JIM KNUTH, Farm Credit Services of America

JIM KNUTH, senior vice president of Farm Credit Services of America

CHAD HART, Iowa State University Extension and Outreach grain economist

BRUCE CLARK, business development officer for GNB Bank in Grundy Center

J A N U A R Y 2 0 1 5 | S OY B E A N R E V I E W. C O M | 1 3

Investing Checkoff Dollars

THE PRICE IS RIGHT Farmers and landowners work to establish fair rental rates as commodity prices decline DAN BEENKEN, Buffalo Center, former ISA president

By Matthew Wilde

ow commodity prices spurred Dan Beenken to fine-tune his farming operation to squeeze every penny out of this year’s crop. Soil sampling, planting prescriptions and scaling back machinery purchases are just a few ways the Buffalo Center farmer and former Iowa Soybean Association (ISA) president plans to increase efficiency and save money without sacrificing production. But it’s his negotiating skills and the willingness of landlords to lower cash rents that will make the biggest difference whether he sees more black or red ink for the foreseeable future. Farmers across Iowa are in the same boat. Commodity analysts say it will be difficult, if not impossible, to make a profit growing soybeans and corn in the coming years unless farmland is debt free. “There’s a lot of little things farmers will have to do, but land is the big one they have to attack first,” Beenken says. Financial and real estate experts say reducing land costs — typically the single largest expense in grain farming — is the best way to increase the chance for profitability. One possible solution is to re-amortize land debt. Take advantage of low interest rates to extend loans and lower payments to make operations cash flow. According

to the 2012 Iowa Farmland Ownership Survey, 37 percent or nearly 11.3 million acres are owner-operated. Maybe even more important is establishing fair cash rental rates. Fifty-five percent (more than 17 million acres) of Iowa farmland is leased, records show. Fixed cash rent is the most popular method at 34 percent or about 10.5 million acres. Ann Johanns, an Iowa State University Extension and Outreach program specialist with expertise in farm management and leasing, says good communication and transparency between farmers and landlords will pay dividends. The majority of 2015 rental rates were set late last summer, but some are still in limbo. Johanns helps coordinate Extension’s annual land rent survey and materials used at Extension farm management leasing seminars throughout the state, primarily held in the summer. “Put numbers in front of landlords so they can visually see the impact of rent on the bottom line,” says Johanns, who’s based at the Mitchell County Extension Office in Osage. “At meetings last summer we walked through scenarios with current and the previous year’s prices. You could tell a definite change in (landowners’) attitudes.”

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The average estimated price in Iowa for soybeans during the 2013/14 marketing year was $13.10 per bushel. For corn, it was $4.49 per bushel. Both prices were even higher the year before and cash rents soared as a result. According to ISU, last year’s average cash rent statewide was $260 per acre, up from $196 in 2011. For good quality farmland, agriculture experts say rents were typically $300-plus per acre and about $400 in isolated cases. Record soybean and corn harvests nationwide caused prices to plummet. The USDA projects soybeans will sell for $9 to $11 per bushel during the 2014/15 marketing year. Corn is estimated at $3.20 to $3.80 per bushel. Analysts say a good South American harvest could put prices at the low end of the scale or worse. Production costs last year exceeded $11 per bushel for soybeans and $4.25 for corn following soybeans, according to ISU estimates. Experts predict similar costs this year. University of Illinois 2015 break-even projections aren’t rosy either. With a soybean sale price of $9.75 per bushel and an average yield of 59 bushels per acre, farmers will have $225 left to pay themselves and land costs. Corn is even less optimistic at $171 per acre left.

Investing Checkoff Dollars

The future isn’t any brighter for 2016, experts say. “Farmers staring at higher cash rents are the ones in trouble,” says John Baize, an oilseed consultant from Falls Church, Va. The good news is land values and rents are declining along with commodity prices, but not at the same clip. The latest Iowa Farm & Land Chapter #2 Realtors Land Institute survey showed land values dropped 3.4 percent from March through September of 2014. Johanns and Kyle Hansen, a real estate agent, auctioneer and accredited land consultant with Hertz Farm Management in Nevada, estimate rents will decline 5 to 15 percent for the 2015 crop year. Hansen says there’s usually a year or two lag for rents to fully adjust up or down with commodity prices. Even though some landowners are strictly out for top-dollar, he says most are willing to work with tenants. “Our philosophy is to try and negotiate a price that is feasible for the operator and the landowner and try to make it as fair as possible,” Hansen says. That’s Beenken’s philosophy as well. He farms several thousand acres with three sons in Kossuth and Winnebago counties. They share cost-of-production figures with 15 landlords. The family also promises to be good steward of the land and pay rent on time. “When land rents went up with commodity prices we didn’t argue. Hopefully now that grain prices have

come down, they’re willing to work with us,” Beenken says. For the most part they have. Many reduced rent by $60 or so this year. Beenken thinks $250 to $300 will be the going rate in north central Iowa this year. If commodity prices don’t improve, he expects another adjustment down in 2016. “It’s going to be tough to make a profit but it’s not going to be a disaster,” Beenken adds. One way to arrive at a fair cash rent is flexible leases, which are growing in popularity. Rent isn’t determined until after harvest and the final rate is based on actual prices and/or yields. Options include sharing in gross revenue or a base rent plus bonus. The farmland ownership survey showed flexible leases account for nearly 12 percent of all cash leases in Iowa. It wasn’t even a category in the 2007 poll. While an excellent option, Johanns says many landowners like the certainty of a set cash payment and don’t want the risk. “The components of a flex lease are fairly simple but I can understand how it can be overwhelming for people,” she says. Beenken says he has one flexible lease and it’s worked out well for him and the landowner. “I’m trying to get more to go that way,” he says. “Two years ago it was my highest rent and this year it will probably be one of my lowest.”

SURVIVOR TIPS: ONE: Communication.

Keeping landlords up-to-date about their land and agriculture goes a long way. TWO: Transparency.

Be willing to share cost-of-production figures. Flexible leases. May be the fairest way to establish rental rates. THREE:

PUT NUMBERS IN FRONT OF LANDLORDS SO THEY CAN VISUALLY SEE THE IMPACT OF RENT ON THE BOTTOM LINE. — ANN JOHANNS, Iowa State University Extension and Outreach program specialist

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EQUIPMENT Buy, Share or Custom Contract

LOWELL GARRETT of Adel works on equipment maintenance in his own on-farm shop. Garrett says every piece of his machinery goes through the shop at the end of each season.

By Dorothy Tate

ightening margins are causing many Iowa farmers to look for places to save a little money and minimize risk. Big ticket items like farm machinery are high on the list. While equipment companies project a 10 to 20 percent reduction in machinery sales for 2015, Iowa farmers will find the future isn’t grim if they base their purchasing decisions on the numbers and consider new options for cost sharing. Roger Wuthrich farms near Bloomfield with family and keeps an eye on his machinery costs. “We just keep track of our cost per acre,” says Wuthrich an Iowa Soybean Association district advisory council member. “It’s a business decision. We have been spending a lot of money on equipment, but next year we’re going to cut way back on that.” Given commodity prices, Gene Willis, a territory manager for Van Wall Equipment in Story City, says farmers are transitioning from a time where they could buy a piece of machinery because they like it and can easily afford it,

to a time where buying machinery will depend on need and the budget spreadsheet. “Some purchases might be delayed and postponed, but there will still be new and used items sold,” says Willis. But it’s not just about the price sticker on pieces of equipment. Willis cautions farmers to factor in the cost of ownership that includes the purchase price, repair and maintenance costs as well as the remaining value of the piece. Equations may look different once all factors are accounted for.

Getting the equation right

Kent Vickre, state coordinator for the Iowa Farm Business Association, says it is important to approach a purchasing decision with an analysis mindset. Vickre advises reviewing the Iowa State University power machinery calculation equations—adding items such as fuel, oil, repairs, maintenance and a 10 percent depreciation cost together and then dividing that by total number of farmed acres. Then, farmers can compare their number to the state benchmark and

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determine where they are. “If a farmer’s power machine cost is $195 per acre and everyone else in their group is at $150 per acre that is a telltale sign you have a lot tied up in machinery,” says Vickre. The Iowa Farm Business Association figures the power machinery cost for its 4,000 members each year. This historical data can be beneficial for farmers who may be considering a purchase or looking to cut costs. “It’s a case by case situation,” says Vickre. “There’s no blanket right answer. You need to know your cost per acre and know current tax laws. At the end of the day it all has to pay for itself.”

Custom equation

Farmers who would like to buy new machinery but can’t make the power machine cost work may consider hiring it done. Wuthrich penciled out the cost of a second combine and realized it was less money and stress to have the acres custom harvested. “You have to have enough acres

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SURVIVOR TIPS: ONE: Purchasing to justify a second combine,” says Wuthrich. “Custom work takes the pressure off of you and your work force and if someone does a good job, it works out well. Timeliness is important and it’s worked well with the guys we are working with.” His advice for others considering custom contracting is to be careful who you work with and make sure they will treat your acres like their own. Vickre says custom work and labor trading situations can work if farmers get the details right. Sharing labor or custom contracts offer the most flexibility and allow for needed changes from year to year. “The nice thing about custom hires or swapping labor is if it doesn’t work one year you don’t have to do it next year,” says Vickre. “When everyone one has invested in a piece of equipment it’s a long term agreement.”

Sharing equation

Sharing or splitting the cost of equipment is another option worthy of consideration when trying to save money. Tim Richter of Lime Springs successfully shared a combine for seven or eight years with a farmer in Idaho and a manure tank for 12 years with another farmer in Minnesota. “Sharing allows you to get the bigger more productive machine with all the bells and whistles and enjoy the benefits and productivity right off the bat,” says Richter. “If you were by yourself you would be looking at a smaller machine. This way you are top of the game right

away and can enjoy the benefits of it.” Vickre cautions shared equipment agreements should be structured and the expectations clearly spelled out. “I recommend looking at a structured partnership or Limited Liability Company and looking at expectations and arrangements like any new business,” says Vickre. “Partnerships include insurance, liability and a discussion about how you split the cost. It’s not just ‘Let’s do this.’” Lowell Garrett of Adel shares a combine with a neighbor. “We never argue about timeliness,” says Garrett. “We go with whatever field is ready. If it’s wet we go with what’s the driest.”

equipment should be based on a power machinery cost calculated on a per acre basis. TWO: Custom contracting

or sharing labor are options for relieving labor and cost pressures. Sharing equipment can help lighten the cost burden of new equipment. THREE:

Maintenance equation

In times of tight margins, maintenance and equipment repair is critical and shops like the one at Van Wall will likely see an uptick in business. Other farmers, like Garrett, will do maintenance in their own on-farm shops, being sure to give each piece of machinery a thorough run-down at the end of the season. “As far as maintenance goes, on a scale of one to 10 maintenance is a 10,” says Garrett. “At the end of each season every piece of equipment we have goes into the shop and we go through it, fixing whatever it needs.” Wuthrich echoes the sentiment that maintenance is of paramount importance to make machinery last. “I’ve got a grease gun and I know how to use it,” he adds.

THERE’S NO BLANKET RIGHT ANSWER. YOU NEED TO KNOW YOUR COST PER ACRE AND KNOW CURRENT TAX LAWS. AT THE END OF THE DAY IT ALL HAS TO PAY FOR ITSELF. — KENT VICKRE, state coordinator for the Iowa Farm Business Association J A N U A R Y 2 0 1 5 | S OY B E A N R E V I E W. C O M | 1 7

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S U RV I VA L O F T H E

FINANCIALLY FITTEST Lessons learned from the 1980s farm crisis By Carrie Laughlin

ant some advice on how to survive tough economic times? Ask a farmer who made it through the 1980s farm crisis. Rising land costs, surplus production and too much debt forced thousands of families to leave their farms in hopes of finding greener pastures in town. Fortunately, not all farms perished during the tumultuous ‘80s. Many survived due to smart financial planning or just plain good luck. Three farmers share the lessons they learned during the farm crisis and how young farmers today can avoid costly mistakes.

Break even

Kermit Allard of Cedar Falls moved to Iowa from Maine to work for John Deere in 1958 and has been farming since 1964. When the opportunity to rent more land arose in 1987, Allard elected to retire from his position at John Deere in product engineering to farm full-time with his son, David With farmers across the country slipping deeper into debt, Allard carefully monitored his cash flow and cut corners by personally handling any building and repairing on his farm, along with a lot of grain contracting in the

spring to cover fall and winter expenses. Allard states more money has been made in farming in the previous four years than the last 40 years combined, but farmers should never get in over their heads. His advice to farmers today is to closely monitor their cash flow and to track monthly spending. “Stay away from variable interest rates if at all possible because you never know when they’ll go against you,” Allard says. Allard notes each situation is unique, but strongly encourages farmers calculate their cash flow to at least break even. “You can have land or you can have machinery, but you can’t have both,” he advises. “Right now, machinery is easy to come by, but in tough times, it’s a huge cost, and the only difference between owning and renting land is the down payment.” Since 1987, Allard has bought, sold and rented land to farm 1,400 acres of corn, soybeans and small grain. He raised hogs farrow to finish, building and remodeling facilities until 2001. Today, they no longer rent land or do any custom work; a planned decision in order for Allard to slow down and for David to work off the farm and help part time.

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Bulletproof balance sheets

Steve Lorimor of Farragut graduated from Iowa State University with a degree in ag business and worked at a bank before returning to the farm in 1974. Though he knew he always wanted to farm, Lorimor returned to his family’s crop and livestock operation out of necessity after his father suffered a debilitating heart attack. The late ‘70s were a lean time for farmers, but the economy was stable. “I couldn’t cash flow a land purchase at that time, which was probably a good thing,” he says. “A lot of young farmers bought land because inflation was driving up land prices and they weren’t sure if they’d get an opportunity to do it later.” Lorimor notes he was lucky to farm with his father and uncles who were conservative. They lived comfortably, but without all the extras. His wife, Kathy, was able to stay home with their two daughters for 10 years before returning to her fulltime teaching job in 1986. This allowed Lorimor to purchase land later in life. As the price of land levels off with crop prices declining, Lorimor says it’s important to have an informed and trusting relationship with one’s lender. He says a lot of farm friends in the ‘80s, who he thought would be successful, had to get out of farming.

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Thinking prices would continue to increase, they bought land and machinery in order to expand quickly. Instead, prices took a tumble while interest rates sky-rocketed. “If you buy land you should be able to survive a 25 percent drop in prices without it affecting your operation,” he contends. With machinery being so expensive, Lorimor suggests renting or leasing machinery, which has worked out well for him for the last 10 years. “You need to weigh costs versus the output,” he says. “A way to keep production costs low is to partner with other farmers on machinery. An efficient piece of equipment can be used between two to three people.”

“Do your own repairs, don’t hire out and cut back on capital expenditures,” he says. “Corn will be put in the ground whether the planter is one year or 20 years old if it’s in good condition.” Davis’ son has been in law enforcement for the last nine years, but plans to take over his father-in-law’s farm in the near future. “My son has always wanted to farm and now he has an opportunity to get started doing what he loves,” Davis says. “I hope he, as well as other young farmers, will take advantage of organizations such the Iowa Soybean Association and the Iowa Corn Growers Association, which have so much knowledge to share and will better their chances for success.”

SURVIVOR TIPS: ONE: Closely monitor

cash flow, stay away from variable interest rates and always at least break even. TWO: Weigh costs versus

output and cut back on capital expenditures.

THREE: Take advantage

of knowledgeable farm organizations to help get through tough times.

Cut back

Sid Davis of Pocahontas began farming in 1976 with livestock and crops. Today, he has a corn and soybean operation. Davis says the ‘80s were difficult with the high interest rates, but he was able to get by due to the off-farm jobs he and his wife, Rose, held. While times were extremely tough and they had to refinance on a few occasions, Davis says at least input costs were lower. “Input costs today are so high you have to consistently have 200-bushel corn, and with how wet it’s been up here the last few years, I don’t know anyone who is producing that.” Davis echoes Allard that the best way to survive tough financial times is to figure out where cut-backs can be made.

YOU CAN HAVE LAND OR YOU CAN HAVE MACHINERY, BUT YOU CAN’T HAVE BOTH. — KERMIT ALLARD, Cedar Falls

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CONSERVATION TALKS BACK Most would argue when commodity prices are low, less focus should be placed on conservation practices. Thanks to new technology, conservation is talking back. By Michelle Jones

he common perception that agronomic performance and environmental performance are mutually exclusive practices is no longer valid. Many times when profits are high, marginal land is put into production, however, these acres are typically the most environmentally sensitive and least productive areas of a field. The Iowa Soybean Association, working in conjunction with AgSolver Agronomic Services, a precision ag data and simulation company, is helping farmers take a fresh look at agronomic and environmental performance by using profit to drive decisions. Through the application of profitability mapping, producers can better understand the performance of their operation by pinpointing the strengths and weaknesses of each field down to the 10 foot subfield scale. Using yield data, input costs and management information, acres

are broken into three zones: high performing, reasonably performing and nonperforming. Combined, these acres generate the overall picture of the farm and help farmers identify ways to optimize profit, including adopting conservation practices. “When crop prices are low and profits are trending downward, it’s important to understand what areas are making profit and which are dragging profits,” says Adam Kiel, ISA Environmental Programs and Services state water resources manager. “Once that’s understood, investigating alternatives for those loss areas may be an easy solution to increase profits.” Many producers think in terms of yield to maximize profit, but a profitability map offers a different perspective. Nonperforming areas comprise three-to-15 percent of nearly every field, according to Dave Muth, AgSolver

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senior vice president of analytics. Historically, these acres result in a net loss and the return on investment (ROI) shows it is cost prohibitive to invest in these acres. Instead, implementing alternative practices or changing land uses can reduce input costs and provide more capitol to invest in high performing areas of the field. “The first thing is demonstrating environmental and economic performance are not competing,” Muth says. “Here is a precision business plan that makes you [the farmer] more profitable and implements environmental practices. Once producers understand how their business improves, they are more willing to put acres in environmental practices.” It starts a conversation about which conservation practices can boost profitability, such as reduced tillage; nutrient application rates, form and timing; cover crops; Conservation

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Reserve Program (CRP) alternatives; habitat plantings; and much more. After reviewing his profitability map, Wayne Fredericks, farmer from Osage and ISA president-elect, determined several alternatives to farming unprofitable acres. He enrolled specific areas in CRP, using a pollinator habitat practice standard, and added a 60 foot buffer along a waterway. The analysis also enabled him to consider other factors that reduce profitability. For example, a couple farms had areas where equipment didn’t fit well and he was unintentionally doubling up on inputs. He decided to remove those acres from production to reduce inputs and enrolled them in continuous CRP instead. Across all farms, he enrolled just under seven acres in CRP, but he was able to improve the profitability of his operation considerably. “We addressed a whole lot of little areas on different farms, provided some habitat and other environmental benefits and definitely improved the fields overall profitability,” Fredericks says. Thinking long-term, returning sensitive acres to native habitat may provide substantial environmental benefits. A strong correlation exists between unproductive areas and

PROFIT ($/ac) 500 400 300 200 100

highly erosive acres. ISA believes these may have the biggest impact on water quality, soil erosion and additional factors relating to sustainability and environmental impact. Looking at conservation solutions for those areas may in turn have a disproportionally greater benefit than doing a practice in high performing areas. “What we might find is a small amount of conservation in those less profitable areas may go a long way in terms of reducing soil loss and nutrient loss,” Kiel says. More sustainable production practices improve both profitability and environmental performance, which leads to greater competitiveness in the market, especially when margins are low. Fredericks sees this as a win-win situation for farmers and the environment. Land is a grower’s major resource, and without protecting the land they lose the ability to generate profits. “If you can shore up the bottom line for producers that makes them more sustainable in the long run and we’re enhancing environmental benefits at the same time,” Fredericks says. “The improvement of the bottom line also was something to improve the environment, and most people don’t think about it.”

SURVIVOR TIPS:

ONE: Profitability mapping

identifies the highly productive, reasonably productive and unproductive areas of a field. TWO: Implementing

conservation practices on unproductive acres can reduce input costs and ultimately improve profit across the whole field. Investing in conservation practices promotes long-term environmental sustainability and improves the bottom line. THREE:

TO THE LEFT is an aerial image of a field and TO THE RIGHT is the profitability map of the same field. The green areas yield a profit, while the areas shaded red consistently perform at a loss. The field scale had a multiyear average net profit of more than $65 per acre each year. However, a closer look at the subfield profitability, indicates the red areas should be evaluated for alternative management and/or conservation practices.

0 -100 -200 -300 -400 -500

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Iowans UNDERSTAND, TRUST

HOW FOOD IS GROWN

IOWA FOOD & FAMILY PROJECT SERVING UP GREATER AWARENESS, CONFIDENCE

n increasing number of Iowans understand how food ends up on their dinner table and trust farmers do a good job growing it. The Iowa Food & Family Project (IFFP) released results of its annual Consumer Pulse Poll in November. Launched in 2011 by the Iowa Soybean Association (ISA) in Ankeny, the initiative’s mission is to increase consumer confidence in how food is grown. “Our work is groundbreaking and the results are real, positive and measureable,” says Aaron Putze, IFFP coordinator and ISA communication director. Ninety-five percent of respondents said they are “very” or “somewhat” knowledgeable about how the food they purchase is produced, up 6 percentage points from last year and 9 points from 2012. The survey also showed 81 percent of people have a “very” or “somewhat” positive impression about farming compared to only 6 percent with a negative/unsure view. Cat Wood, manager of the Machine Shed Restaurant in Urbandale, one of more than 40 IFFP partners, says more people than ever know how much care and effort goes into the turkey, ham and other food the restaurant serves. That means IFFP programs such as Talkin’ Farming at the Shed, in which farmers discuss how they grow crops and livestock with customers as they

By Matthew Wilde and Dorothy Tate

dine, are working, she says. “The more we can help people understand that Iowa farmers are doing the right things, the better off all of us will be,” Wood says. Results from the latest IFFP survey, the fourth one in three years, indicate the movement is working. Programs include Join My Journey with Iowa Girl Eats Kristin Porter, in which the popular Des Moines food blogger invites people to follow along as she learns about production agriculture; Food for Thought lecture series and You on the Farm tours, which provide urban residents a chance to experience farm activities first-hand. IFFP is also a presenting sponsor of the Iowa Games and a supporter of Live Healthy Iowa. The survey, conducted by Campaign HQ of Brooklyn, queried 350 Iowans who are active in health and fitness activities. The majority of respondents were female, highly affluent and educated and make the majority of their household’s food purchasing decisions. The survey’s margin of error was 4.3 percent. “We’re influencing the food influencers,” Putze says.

Making a difference

According to the survey, 15 percent of respondents said farmers “do things right regardless of financial benefit,” up 6 percentage points from last year.

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Sixty-one percent believe growers “balance doing what’s right with profit, “while only 14 percent think farmers are “driven solely by profit,” down 4 points from last year. Iowans surveyed are more trusting of modern farms and food production than last year, increasing from 17 to 21 percent. Less trusting came in at 34 percent, down 5 points. Forty-one percent said there was no change in trust. Food safety is at the top of Paula Hender’s list when buying groceries so she values the opportunity to actively engage in conversations about how food is grown. Earlier this fall, Paula was selected as a You on the Farm contest winner and, with her husband Derek and sons Jason and Dylan, joined farmers Kevin, Julie, Jacob and Emily Van Manen of Kellogg for corn harvesting. The tour reaffirmed Paula’s opinion that farmers have her best interest in mind when it comes to providing wholesome food. “I have concerns just like other moms,” Paula Hender says. “Sometimes that concern leads me to question the choices I make. I want to be confident and purchase food that tastes good and is good for my family.” Poll results indicate that people who are familiar with the IFFP are more likely to pay attention to food labels and seek details about how

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food is grown. They are also more knowledgeable about farming and have a more favorable impression about production agriculture. For example, those who are familiar with the initiative are: • Ten percent more confident that farmers care for the well-being of their livestock. • Nine percent more confident that farmers protect the quality of the state’s water, air and soil. • Nine percent more trusting that farmers balance doing what’s right with financial considerations. • Half as likely to say they have a negative impression of farming.

Image is everything

Cristen Clark, a crop and pork producer near Runnells, is pleased with the survey results. Public perception is influenced by truth and what really happens on farms, she adds. Every farmer has a responsibility to tell their story, Clark continues.

That’s why she’s an IFFP advisory team member. “There is a concerted effort by families to work the land and care for the livestock in a way that allows us to provide the next generation — our children — with a farm that is just as productive as or more productive than how we found it,” Clark says. “It’s not a factory. I take pride in passing on farming for my kids just as my greatgrandfather did for me.” As positive perceptions about farming and those that work the land increased, so did recognition of the IFFP. Awareness of the effort to connect farming, food and families jumped 6 percentage points from last year to 31 percent, according to the poll.

Additional poll results include:

• People who said they are “very knowledgeable about how the food they purchase is produced increased by 6 points to 46 percent.

• Eighty-one percent of people “often” or “sometimes” think about how food is grown. • Iowans watch price (21 percent) but care more about quality (35 percent) and safety (24 percent) of food when making purchasing decisions. • Forty-eight percent of respondents said food labeled “hormone free” was better compared to 41 percent who didn’t and 11 percent not sure. • Fifty-six percent of people said “GMO-free” labeled food is not better compared to 22 percent who said it is. • Forty-three percent of those surveyed said food labeled “antibiotic-free” is better compared to 48 percent who said no. “Our efforts are making a difference,” says Joyce Hoppes, an IFFP advisory team member who works for the Iowa Pork Producers Association. “We still need to educate people about labels. They are paying attention.”

THOSE AWARE OF IOWA FOOD & FAMILY ARE

% more

9confident IN FARMERS AS ENVIRONMENTAL STEWARDS.

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IMPROVING EFFICIENCY WITH AN IPM STRATEGY By Allison Arp

SURVIVOR TIPS: Scout before applying insecticides. ONE:

Analyze the factors of the disease triangle before applying fungicides. TWO:

Apply fullrate herbicides and rotate chemistries to prevent future weed resistance. THREE:

he recent drop in commodity prices have many farmers scrutinizing budgets, and for some that could mean eliminating certain production practices. Iowa Soybean Association (ISA) On-Farm Network® experts say for farmers to stay competitive, that may not be a wise decision. “It is important for farmers to look at every aspect of their integrated pest management (IPM) strategy for efficiency and not just how many bushels were produced and crop price,” says Tristan Mueller, ISA On-Farm Network manager of agronomic operations. “There are ways to make each acre more profitable by choosing the right inputs at the right time.” An IPM strategy should be used when dealing with insecticides, fungicides and herbicides. When controlling insects and diseases the products should have a specific purpose and not be used as an added health benefit. This means scouting fields is crucial to determine which fields need a particular product. For example, scouting soybeans for aphids or bean leaf beetles allows farmers to know which fields need insecticides. For fungicides, keeping an eye on the weather is crucial. If all factors of the disease triangle are present — host, pathogen and a disease-conducive environment — fungicides will have a better return-on-investment. Working with groups like the On-Farm Network, ISU and your local advisors can help farmers determine when to spray.

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According to Iowa State University (ISU) researchers, an area where farmers cannot cut back is weed management. Doing so may open the door for escapes and weed resistance. “Plan to have as much diversity as possible in your program,” says Mike Owen, ISU weed specialist. “It’s clear to me that in each and every case, farmers need to start out with a soil-applied residual product … and they need to consider whether fall applications are important.” Using the full-rate recommended by the company is essential. To ensure weeds don’t become an issue, rotating chemistries and scouting may help prevent a larger problem. It is important for farmers to test products and practices on their operation before wide-spread use, Mueller says. “Farmers need to make sure they see the maximum return-on-investment for the inputs they choose,” he adds. “Efficiency of investments become especially important when prices are low.” Farmers can conduct trials through the On-Farm Network to test the returnon-investment of a variety of products or practices. When multiple farmers do so, data can be aggregated and provide an overall look at investments. “If you want to manage it you have it measure it,” says ISA On-Farm Network director Pat Reeg. The On-Farm Network has return-oninvestment calculators based on trial research on its website, www.isafarmnet.com.

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FEB. 18-19 This year’s newly named “ISA Research Conference” is a tangible outcome of our efforts to deliver on our commitment to greater partnership. Dear ISR Readers, The primary reason I joined the Iowa Soybean Association (ISA) two years ago was its leadership in bringing the greatest return on farmer invested checkoff dollars through the execution and communication of soybean research. 2015 is a landmark year for both ISA and our research programs. Thanks to the visionary leadership of our farmer board and the soybean farmers they represent, ISA is celebrating 50 years of research investment, which has driven the soybean industry forward in benefiting not only Iowa farmers, but also all U.S. soybean growers. For 15 years, our On-Farm Network® and Environmental Programs and Services (EPS) teams have been partnering with farmers in order to develop and execute scientifically sound evaluations of products and practices that drive continuous improvement in the areas of agronomics and conservation. As ISA looks to the future of our organization, the soybean industry and U.S. agriculture, we have focused on opportunities to accelerate return on checkoff investments through integration and collaboration. We recently reorganized our internal research programs to facilitate greater collaboration, and added an Analytics team to support the On-Farm Network®, EPS and our contracted research partners at Iowa State University (ISU) as well as other state universities. In partnership with ISU, we established the Iowa Soybean Research Center to build closer and more productive partnerships among farmers, academics and industry. Finally, we have increased multi-state partnerships through the United Soybean Board and the North Central Soybean Research Program. This year’s newly named “ISA Research Conference” is a tangible outcome of our efforts to deliver on our commitment to greater partnership. The conference will continue to showcase our On-Farm Network trials and programs. In addition, we will feature innovative and high-impact results from our EPS and Analytics teams, as well as research and Extension and outreach work from ISU, other universities and several industry partners. Please plan to join your friends at this year’s ISA Research Conference on February 18-19, 2015, at the Scheman Building on the ISU campus in Ames, Iowa. Welcome to the future of soybean research! We hope to see you at the conference. Sincerely,

Ed Anderson

Sr. Director of Supply & Production Systems Iowa Soybean Association

Advancing Agricultural Performance® and Environmental Stewardship J A N U A R Y 2 0funded 1 5 | S OY B E Aby N the REV I E W. Ccheckoff OM | 25 in part soybean

It is a remarkable time to be involved in soybean production. The potential for unmanned aerial vehicles and other “space age” technologies to improve our crop production practices is truly amazing, and the benefits to be gained from harvesting the power of “big data” are untold at the moment. But advances in technology do not automatically make soybean farmers more profitable. The key to increasing profitability of soybean production with new technologies is research. In the summer of 2014, Iowa State University (ISU) and the Iowa Soybean Association (ISA) established the Iowa Soybean Research Center. Creation of the center marks the beginning of a new era of collaborative research between ISU and ISA. At the ISA Research Conference, there will be many presentations on interesting and relevant soybean production topics by ISA researchers. There will also be a few ISU scientists presenting results of

We are extremely fortunate to be producing soybeans in what is arguably the best location in the nation — Iowa. collaborative work conducted in 2014 by ISU and ISA On-Farm Network® staff. I encourage you to attend these presentations and share with the researchers ideas that ISU and ISA might study together in the upcoming growing season. We are extremely fortunate to be producing soybeans in what is arguably the best location in the nation — Iowa. It is our obligation to past, present and future generations of farmers that we continue to strive to improve the productivity and sustainability of soybean production. I look forward to seeing and visiting with you at the conference; it’s going to be a great one!

Greg Tylka Professor and Director Iowa Soybean Research Center, Iowa State University

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I still recall the first year I participated in the ISA On-Farm Network® program back in 2001 as an agronomist signing up farmers to engage in nitrogen replicated strip trials. The farmers involved and I could immediately see the value of collecting credible on-farm data to make informed decisions for continuous improvement. Now as director of the On-Farm Network® I look forward to continuing this mission and introducing my team at this year’s conference. All of us are dedicated to improving the efficiency and profitability of environmentally sound cropping systems. During 2014, On-Farm Network® staff executed a variety of projects including integrated work with EPS and Analytics teams and collaborations with ISU and industry partners. I cannot guarantee good weather during the conference, but I do promise you will not be disappointed with the storm of information available at the 2015 ISA Research Conference. I look forward to seeing you in February. Sincerely,

Patrick Reeg Director of On-Farm Network I first encountered the Iowa Soybean Association (ISA) 25 years ago at a No-Till Farming conference in Ames. The event enlightened me about no-till farming, showing the power of association and the role of active leaders. It showed where common motivation for capturing value and solving real problems leads to new knowledge and real results. 2015 marks the fifteenth year for ISA Environmental Programs and Services (EPS) staff working with farmers across Iowa. EPS’ objective is to continuously improve natural resource management practices and environmental quality as we seek to increase farmer engagement, acres covered, natural resources improved and practices and projects deployed. The ISA Research Conference will share our experiences and information from the ISA On-Farm Network®, EPS and other contractual research projects. I encourage farmers to attend and learn about topics associated with the Iowa Nutrient Reduction Strategy, Watershed Water Quality Initiative projects, integrating cover crops into production systems, edge of field practices, multi-scale water monitoring and sustainability efforts across the soy supply chain. This is the conference where farmers come together and talk about current research that directly bolsters soybean productivity, increases efficiency, manages natural resources and improves environmental quality. I hope to see you there.

Roger Wolf ISA EPS Director

Even if you haven’t worked with our research team in the past, the information presented will benefit you and your farm, as well as provide the opportunity to engage with individuals who can help you get started with research projects of your own. All Iowa soybean farmers are invited to attend the ISA Research Conference this February 18-19 in Ames. This is the first year that the Iowa Soybean Association (ISA) On-Farm Network®, Environmental Programs and Services (EPS) and Analytics teams will be cohosting the ISA Research Conference. The reasoning for bringing the On-Farm Network, EPS, and supporting Analytics together at one conference is our recognition that so often their work is linked and moves together. For example, research on nutrient applications may show some environmental impacts once data sets are evaluated by the analytics group. Things like this are important to know as we continually work to improve our farming operations. The purpose of the conference hasn’t changed. It is still about bringing farmers, consultants and other decision makers together to learn about research being done by industry, academia and the ISA research team. Data collected from various trials and experiments completed in the past year will be presented by not only ISA research team members but also outside speakers. I am excited as I see how the move to integrate our research work will build new relationships across Iowa and, for that matter, the country. The newly founded Iowa Soybean Research Center at Iowa State University fits into this integration as well. For farmers like me, this should reduce the possibility of information gaps that make it difficult for us to make good decisions Even if you haven’t worked with our research team in the past, the information presented will benefit you and your farm, as well as provide the opportunity to engage with individuals who can help you get started with research projects of your own. If you are interested in research, new technology and some really great conversations, this conference is one you don’t want to miss. We hope to see you there. Sincerely,

Tom Oswald

President, Iowa Soybean Association

FEB. 18-19 Advancing Agricultural Performance® and Environmental Stewardship J A N U A R Y 2 0funded 1 5 | S OY BEA REV I E W. Ccheckoff OM | 27 in part byN the soybean

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