Welcome to season three of the Dirt on Organic Farming, a podcast from OATS, the Organic Agronomy Training Service. I'm your host, Nate Powell Palm. We've talked about experimentation, and we've talked about taking risks, and how to assess them. For our final episode, we're going to talk about emotions, because farming can be an emotional business.
As much as we may want to keep it cerebral, whether we like it or not, emotions tend to play a major role in how we manage our agricultural operations. And I'm here to say, that ain't a bad thing. Farmers feel passionately about their work, which is why many of us do it in the first place. But letting emotions guide our decisions too much could cloud our judgment and produce outcomes that might not serve us in the long run.
Finding the balance between the emotions and the data is key and is how we're able to learn from our mistakes. Instead of getting bogged down by them, this balance was something that our friend, Wesley Reith had to discover for himself. So we're ending the season with matters of the heart. We'll get started by learning a bit about Wesley and his operation. My name is Wesley Reith. I'm a farmer in Southwest Michigan. My grandpa farmed here, and we grew up across the street from him.
My memories growing up were of helping my grandpa on the tractor, and engaging in all those activities. The conventional wisdom at the time was that there's no money in farming, and if you can do something else, do that. So I think the advice was well intentioned. I took it to heart, and got a college degree, and spent some time in Washington DC, like the ag policy side.
And also spent a couple years as a high school teacher, and eventually found my way back to farming and was very grateful to do that. And for the last eight years or so, I've been leading the operations and the grain program at Granor Farm in Three Oaks, Michigan. We grow primarily some row crops and cereal grains. So we do corn, soybean, wheat, rye, barley, and a few other things on occasion, buckwheat, et cetera. We are focused primarily on the markets available to
us in Michigan. So that includes a lot of the craft beverage market. So our distillers, maltsters, millers, those are folks that we work with a lot directly to showcase, you know, the heirloom corns, the varietals that we enjoy growing and that work well in those applications. The distillers, maltsters, and millers. When have I ever said no to a nursery
rhyme about drinking? I tell ya, as you can tell from the variety of crops Wesley grows, Granor Farms is a really diversified, creative, and sustainably minded operation that works hard to meet the specific needs of their land and their community. I like to say we're not very dogmatic when it comes to the types of practices we engage with on the farm. We currently operate on about 500 acres, and most of that is certified organic production.
We're very much focused on creating a resilient and a sustainable operation that allows us to keep farming. We are trying to employ as much no-till as we can, whether that's in a cereal rye field that we crimp and plant soybeans into, or it might mean using more tillage on a corn field that we need to control some weeds a little bit better, and everything from that, all the way to growing some non GMO crops, or some other crops that maybe aren't certified organic but fit one particular
farm better. So we're very focused on soil health, ecological health, and obviously the, you know, the health of our employees too. And of course there's a lot of learning that goes into that every single year, and sometimes the tension between agronomics and the ends meet. But such is the, the beauty of farming, and we're, we feel really lucky to be able to do that. Such is the beauty of farming. It's certainly no easy task to balance all of these outcomes,
but we do our best. So let's get into Wesley's story. It's about grain marketing for organic products, which is of course a little different than grain marketing conventional grains, since the price of conventional grains is set, but for organics, it's much more variable. And when you're dealing with your hard earned grain, and substantial amounts of money in a small margin business, that can be pretty difficult. So grain marketing is a kind of a tricky
thing. It's as close as a lot of folks, at least the folks that I usually interact with, get to gambling. And the hard part is you're gambling with a lot of money, and sometimes your livelihood. You put your blood, sweat, and tears into creating this crop that usually corn, soybeans, wheat, whatever it happens to be, and when you sell that, you kind of get one shot to do it. And so I think just by exposure, I adopted this mentality of this is a really emotional decision.
It's a significant impact on our bottom line every year, and kind of how we sell our grain. And so here comes 2020, and the beginning of the year brought a lot of volatility, right? We had lockdowns, we had a lot of new vocabulary, we were learning about essential workers and what it means to work from home or try to work from home and also work at the farm, and figuring out how to navigate this kind of new world we were living in.
And at the same time, we had some grain in the bins, and I was hearing stories, and some of this was making the news at the time, I remember specifically about dairy farmers having to dump milk. This farm here in West Bend has been forced to dump 25 each day as a part of coronavirus. Or, you know, livestock producers having to call some of their herd just because all these markets were shutting down, right? Farmers couldn't get their product to
the distributors. So, among myself, and a lot of the folks I was talking to at the time, there was this degree of fear around how are we going to sell our grain this year, right? Things really seem up in the air, and we don't know if there's going to be the market that we thought there was going to be for our organic corn, or organic soybeans, or whatever it was. And so I distinctly remember, this was probably in mid 2020,
we sold some organic soybeans. We actually needed to clean out a bin, so we took a price and we thought, well, you know, at least we sold them. This was an okay decision. This was completely new territory, and Wesley could not have known how things would play out, but all the shortages actually led to spikes in food prices. And I remember kind of watching the price change over the next couple weeks and which turned into months.
And the price for these organic soybeans just kept going up and up and up and up, and to a point where I was really kicking myself for making this decision when I did. Because sooner than I thought, you know, the price was now I think $10 a bushel more than what I had sold mine for, you know, approaching $30 a bushel, which was a lot for organic soybeans, or at least in, in my part of the world, it seemed like a lot.
And so that was a decision I really beat myself up for, for a long time, because I felt like I had really missed an opportunity. And I was seeing this difference between, you know, what could we have done with this extra many thousands of dollars at the time in this one little decision that I made? I think I speak for everyone when I say it's not fun to reflect on a decision once you have more information and wish you would've chosen differently.
For Wesley being so emotionally attached to his work, and knowing what they could have done with that extra money made it all the more disheartening. But he realized beating himself up over it wasn't the best solution. So he started to take a more constructive approach.
I think my reflection on that situation and this point at which I maybe missed the movement of a market in a positive direction, and I was not able to take advantage of that, really kind of made me in retrospect, and analyze this from a more objective point of view and said, you know, if we're dealing with spreads of tens of thousands of dollars here, this probably shouldn't be a purely emotional decision.
I think there's got to be a better way to kind of fundamentally navigate how to sell grain, when to sell grain, even in an organic market where we've got lots of outside factors playing into what prices do or don't do. And so what we attempted to do following that, and what we're still learning how to do today, and trying to get better and better at every year is,
I think two things primarily. The first was, I understood pretty quickly, I need to know rock solid, what my cost of production is for an organic crop. How much does it cost me to produce a bushel of organic soybeans or a bushel of organic corn? And once I know that number, that is a very non-emotional way or a very objective way into helping me navigate when do I need to sell a crop?
Because then the attitude that we adopt, once we know that what that number is, I now know how much money I'm making, right? It's not just a check that I get in the mail, and we hope it covers everything. If I'm selling my crop above my cost of production, then I can at least be sure that we can live again to farm next year.
So I think that was my biggest piece of learning primarily that came from this was, I need to know what my cost of production is, and I need to have a very good knowledge of if the market is above that, what is my risk tolerance? And basically seeing if it's going to go higher or lower. But really fundamentally knowing where we're at from a budget perspective or a cashflow perspective, and understanding that I think took a lot of the emotion out of it for me, and that was really helpful.
Luckily for Wesley, he did not have to embark on this mission to figure out his cost of on his own. I relied on a lot of other farmers for that. We've relied on several different tools. There's a lot of great resources in helping farmers kind of find your cost of
production. Which seems at the outset like a very simple question, but I think it's actually one of the more complicated ones on the farm, especially in organic farm, because you're dealing with a lot of fixed costs, a lot of variable costs, and these costs change every single year. And for a lot of us that farm full-time, it can be challenging too to account for our labor. How much do we pay ourselves? And luckily for you, Wesley is happy to share the tools he now uses.
The OGRAIN Network, the OGRAIN resource from the University of Wisconsin, they've got a couple great tools out there on how to go about establishing a cost of production. I think it's called the OGRAIN Compass Tool. There's other spreadsheets out there that farmers have built. There's even some platforms that you
can purchase as a subscription. We use, we actually use one called Harvest Profit that helps us track our numbers and, and build a cost of production that we can be confident in so we can take the emotion out of making that decision. Today, Wesley's a farmer, who's put a lot of thought into how he strikes the balance between emotional investment, and data-driven decision making, and he's trying to apply that framework beyond determining cost of production to all aspects of his operation.
One of the things that I like to say is there is no such thing as an agnostic farmer, meaning every farmer believes so deeply in the work that they do every day, and that gets down to like, what colors the paint on the machinery that I operate, right? And so, even equipment purchasing decisions, that becomes a very emotional decision. And I think we saw that too as a result of covid, and the economy that we navigated in the years following. There were lots of supply shortages.
We couldn't get equipment maybe when we needed it. And so the prices became very volatile, and very expensive, very quickly in the equipment world. And so I think as an operator, as a producer, there were definitely some times where we're looking at potentially upgrading a piece of equipment or trading something or selling something, and a one quick look at the price tag compared to what it was right before Covid, makes the decision all of a sudden seem not very attractive.
And I think it goes back to the same thing, right? If I'm emotional about that decision, there's not a whole lot of leeway for me to kind of navigate it in an objective way. And so we're actually using a lot of these same tools. It's not necessarily a cost of production tool, it's a cost of machinery or an operating cost, right? How much does it cost me to run this tractor over this many acres per year? And that's the tool that I can then use to justify, Hey, is this a good purchase right now?
But Wesley understands from personal experience that thing for many farmers to do. The culture that I was brought up in as a farmer is very emotional, which is kind of in a way, almost ironic and antithetical in a way that a lot of farmers are very much like individualists, pick yourselves up by your bootstraps, and get the work done type of mentality. And again, I don't think that's necessarily a bad
thing. I think that's the beautiful, and frankly, the very human part of us being involved with growing crops to feed people. So I don't want to advocate for no emotion at all, because I think that's missing the point. At the same time, I think that emotion can get us into a tricky corner sometimes. If we're purely making a decision that involves a lot of dollars and cents without consulting, what do our finances tell us? What do our market conditions tell
us? What do our advisors tell us, frankly about what is the right decision to make right now? What we've learned to try to do, I think, in a perfect world, is to leverage the things that make us human, our problem solving, our ability to analyze a complex situation, and come up honestly with a solution that's probably not perfect in any way, but is a kind of multifaceted
compromise. So I think for myself, the learning to combine the objective data alongside keeping this deep seated emotion, and value, and belief we place in our work, I think putting those together, especially as organic farmers, we face enough headwinds already, I think this is a quick way to give ourselves every tool in the toolbox, so to speak, to make good financial decisions, just by kind of taking some of that emotion out of it.
That's a wrap for season three of The Dirt on Organic Agriculture, a podcast from the Organic Agronomy Training Service. Hopefully this season has provided some tools and insights for thinking about experimentation, and mistakes, and how to make the most of them. Because we know all too well that it happens. But the more we can figure out how to capitalize on those mistakes, seek out advice, and incorporate learnings, the more capable and resilient we become as farmers.
That's a wrap for season three of The Dirt on Organic Agriculture, a podcast from the Organic Agronomy Training Service. OATS provides training to agronomists, advisors, and crop consultants, so that farmers will have better access to reliable, science-based advice for their unique farm operation. Special thanks in this episode goes to Wesley Reith of Granor Farm. This episode was produced by Blue Canoe Studios. For more information, go to www.organicagronomy.org.
OATS is a programmatically independent consortium that is fiscally sponsored by the Organic Trade Association. OATS is supported in part with funding from OTA membership companies. Season three of the Dirt on Organic Farming is made Organic Center and FFAR the Foundation for Food and Agriculture Research under award number TOCFFAR-EXT-002. The content of this publication is solely the responsibility of the authors.
It does not necessarily reflect the official views Foundation for Food and Agriculture Research. I'm Nate Powell Palm. Till next time, thanks for listening.