The farm profitability pie can only be carved into so many slices. Reid and Heather Thompson were very aware of the need to make sure they contributed to the servings when they decided to join the family farming operation near Colfax, Illinois, in 2019.
Leaving the security of a full-time job with benefits, vacation and a steady paycheck was a gut check moment, said Reid, who had worked for Hertz Farm Management and was a licensed real-estate agent and auctioneer for a decade. He gives details of how Thompson Farms has sought to trim expenses, streamline operations and continues to evaluate the farm partnership as part of the DTN Ag Summit, held virtually Dec. 7-9.
Readers may recognize the young farmer from DTN’s 2020 View From the Cab Series where he detailed crop conditions and discussed life on the farm throughout the season. He and Heather, along with two toddler sons, farm with Reid’s parents, Gerald and Jayme Thompson. Heather works full time as a digital marketing manager for GROWMARK, Inc.
The presentation “How to Come Home When the House Is Full” covers how the couple first partnered with Heather’s grandmother to acquire their first acreage. They worked their way into farming for a couple of years. When a hired employee left, the decision was made in 2019 that Reid would come back home full time. Along the way, they’ve continued to add some purchased and rental acreage.
“I can’t understate the importance of those years working off the farm. Not only did I learn about management, marketing and negotiation, but it allowed me to come back into the farm at a management level,” he said.
Farming 3,400 acres spread across two counties stretches the labor force. A move to strip-till in corn has allowed them to grow the farm and shed some horsepower, while reducing field passes and the number of people it takes to do them.
It was a rough year to start — Reid got a taste of the back hand of the profession between weather woes and trade wars. “Hard lessons are good teachers,” Thompson said.
REDUCING INPUT COSTS
The younger Thompson has made it his job to whittle on input costs by buying fertilizer and chemicals wholesale and shopping year-round to do it. Last year the farm put in enough liquid nitrogen storage to hold all their season needs — saving 30% to 40% on their nitrogen costs. He’s found real price efficiencies buying direct off the river. Adding Y-drops to allow late-season applications has also reduced the overall amount of nitrogen needed.
These savings, along with inputs like herbicides, insecticides and fungicides through wholesale buying justifies his entry back to the farm, he figured. The farm added a chemical mixing shed, and they’ve trimmed 40% off their chemical costs by buying wholesale or direct. Running their own sprayer allows timeliness and avoids custom costs.
Growing soybean seed and a smaller amount of seed corn for Bayer Crop Science has also expanded opportunities to add to profit margins.
SETTING FAMILY GOALS
While justifying their presence on the farm through bringing more profitability to the operation is key, Reid said setting family goals and guidelines was just as important. “We all sat down in February, pre-COVID, and did some true strategic planning — identifying strengths and weaknesses. We looked at some areas we thought we could grow and improve on the business, as well as things that were going to challenge us,” he said.
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Moving to more regenerative farming practices that build soil health were high on the list. “But we don’t want to be cliche and say it — we really want to practice it,” he said.
More than that is the importance of not just talking about transition and succession plans but having a vision and putting the wheels in motion long before it happens, he stated. Seeing five to 10 years ahead and finding meaningful ways to measure growth and opportunities is a challenge.
“Another challenge is creating a level of accountability,” Reid said. Holding people accountable becomes more difficult when it is a father, a wife, a child.
“The biggest hurdle we are going to have to overcome is how to we shift from being a family farm to a farm business. I know that sounds overused, but it is reality. We’ve had great growth over the past few years and hopefully have more opportunities to continue that trend,” he said.
He makes no excuses for being a millennial farmer either. “We don’t necessarily prioritize the farm as our life like our fathers and grandfathers did. It doesn’t mean we don’t work hard, but we also are more about having time at home and living for now.”
Learn more about Thompson Family Farm at their website: here.
Pamela Smith can be reached at Pamela.Smith@dtn.com
Follow her on Twitter @PamSmithDTN