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HAT TIPS

Posted 5/13/14 (Tue)

Hello,

It’s been a little wet to farm. And a little cold. But a lot of the farmers are pulling those anhydrous tanks down the road, and a few are spreading fertilizer and doing some seeding. Will does most of the farming around here, and he has been eyeballing the drill for a few days. I’m more concerned with the Miles City Bucking Horse Sale coming up next weekend.
I used to figure on being done seeding before I went to the sale. Now, I figure it doesn’t make that much difference. Maybe that is why our yields are below the county average.
Now, there have been a couple good years for farming. But, as they say, the cure for high prices is high prices. As the cure for low prices is low prices. Corn, which we see more and more of in North Dakota, has lost a lot of its glamour the past year. But, farmers did get ahead a couple of years. We had pretty good moisture and pretty good prices. The drought stayed south of us. The saying goes, “A farmer has two good crops. One is next year. And the other he can’t remember!”
I never was a good farmer. I’d scratch around the badlands. Put in a little wheat or oats. And then I was pretty much done. Usually didn’t have to harvest. Maybe enough to get my seed back. And then I would start planning for next year.
So we have that yearly, inevitable meeting with the banker. When we borrow operating money. And, you know how bankers are, they figure you should pay it back. I’ve kind of always thought that if they want it back, they shouldn’t have given it to me in the first place.
That reminds me of a story. This farmer needed his operating money. He had worked on a business plan and a cash flow deal for several days. When he sat down with his loan officer, it looked good on paper. He was going to plant wheat. As long as he raised a 35 bushel crop and got $4.10 for the wheat it looked good.
That year he had an 18 bushel crop and 290 wheat. He met with the banker and explained he would need an extension on that operating note. The banker agreed. The next year the farmer planted wheat again. And once again, when it came time to pay off his operating he was short. I hate it when that happens.
The third year his banker asked what he was going to plant. Wheat. Always wheat. The third year he was again short. Three years without being able to retire his operating notes. Sounds familiar doesn’t it.
The fourth year the loan officer asked the farmer if he ever thought of planting watermelons. The farmer reluctantly agreed. That fall he came into the bank with a big smile on his face. He paid off his operating. The banker was tickled. Then the farmer paid off the previous year’s note. The banker was really happy. Then the farmer paid off the year before that’s note. The banker was beaming. Then the farmer paid off his first year’s operating note.
The banker was astounded. “Boy,” he said, “Those watermelons really turned a nice profit for you!”
The farmer said they sure did, “And I’ve got enough cash left over to buy my seed wheat for next year!”
Later,
Dean