Brewster and Garden City, Kansas
Department of Plant Agriculture

Day 9 - Monday

Rural Communities and Dryland Cropping Systems

September 4, 2017
By: Amanda Craven, Amy Reymer, Phil Pieper, Donna Lowes and Matt Hyland

AgSun truck entrance signOur Monday morning started out bright and early leaving Denver, as we headed to Arriba, Kansas and explored the rich history of the prairies. Along our way we noticed a number of dryland corn fields that were struggling, to say the least. Many of the fields were waist high or shorter and we wondered how forcing a corn crop in this climate could be economical. With questions and doubts about dryland farming in hand we headed to our first quick stop. In Arriba was visited a rest area that included billboards outlining dryland farming, local monuments, and the culture of the area. From Arriba we travelled to AgSun, owned by Phil Knox where we learned about dryland farming, corn flaking, and how he uses his economic background to make educated business decisions. Our last stop of the day was the Buffalo Bill museum in Oakley, Kansas where we learned about the Wild West and gained an appreciation for the legend himself.

 

Copy of the Homestead Act on displayThe History of Dryland Cropping in Arriba, Kansas
The first theory of dryland cropping, "rain follows the plow", was merely wishful thinking. In reality only drought followed for settlers through the plains. Hardy Webster Campbell was the first to study a scientific method to this moisture management. In 1902, he introduced deep seeding, contour farming, and soil aeration techniques to help farmers conquer these tough conditions. "We do not lose any of the rain, we have full benefit of it. We keep it stored where the roots of the plants can reach it when they need it" -Hardy Webster Campbell.

Also outlined at this stop was The Homestead act, passed in 1862 by congress was a 160 acre allotment which was not as sufficient as hoped, it could not support a family on the arid plains. As farmers improved dryland farming practices and the 1909 Homestead act made the larger parcels available, eastern Colorado became popular real estate. Fifty years later and the government had devised a suitable policy to farm in high prairies, led by new claims.

Corn Flaking at AgSun
We then continued to AgSun, which was located in Brewster, Kanas. We were greeted with open arms by Phil Knox, his wife Sharron as well as the plant manager Don Allen. The conversation quickly started off with a brief history of Phil's education and how the AgSun company has become what it is today. Phil stated that he has acquired various degrees over his career as well as a Ph.D in economics from Berkley University. Phil taught for 5 years at Colorado State but then came down with a serious case of spring fever and decided it was time to return home to the farm. AgSuns was first established in the 1920's as a wheat farm but quickly transitioned to a variety of different agriculture practices. Currently AgSun farms around 12,000 acres of corn, soybeans and wheat. They also have a feedlot with approximately 2500 head. However, the corn flaking business is the center of the company.

Corn going into a binThe Corn Flaking Process
Don, the plant manager, then explained that annually AgSun produces 2-2.5 million tonnes of steamed corn flake. Production starts off with number 2 yellow corn at 19% moisture. Corn is stored in various bins with an overall storage capacity of 1.5 million bushels. Don explained that the corn is taken and placed into the steamer where it was heated up to 207-208 degrees with natural gas providing the heat, and water the steam. Once the corn reached the correct temperature it was fed through a feeder house and into the flaker. The flaker consisted of two 8-ton grooved rollers powered by massive electronic motors.  The flaked corn was then sent up a conveyor into a storage bins where it was loaded with a large John Deere pay-loader into one of his transport trucks. One of the interesting points Don made is that his truckers are responsible for loading their own trucks with the pay-loader. This way when the truckers load their own trucks they make much less of a mess, in terms of spilled and wasted product. 

At this point Phil took over the conversation and talked about his customers. AgSun's main customer is a large-scale dairy production, as well as many smaller dairy operations and feedlots. One of the most important things noted was that they don’t sell the product (corn flake) but more the ability to have it at the customer when they need it. Phil continued by saying that corn flake is a perishable good, and the main part of their business was based around providing a good energy source in a timely and reliable manor.

Dryland Farming
An irrigation systemAfter learning about corn flaking we moved into a discussion about dryland farming. Phil currently irrigates between 4000-5000 acres and runs 1500-2000 dryland acres. The average rainfall in Brewster is eighteen inches, however it can drop as low as ten inches in a dry year. Phil happily explained that this year has been outstanding, with 25-30 inches of rain to date. In terms of agronomic practices, Phil is a strong believer in no-till for soil moisture preservation and erosion mitigation. He went on to talk about the soil type in the area, which is a light clay with 50 feet of sub soil. He also explained that he doesn't do a lot of field work, spraying 3 times per year on average. In terms of weeds, Kochia continues to be a problem across Kansas with glyphosate and atrazine resistant populations developing.

Coming from a humid continental climate, the students were interested in learning more about the logistics of dryland farming. Phil explained that irrigated corn crops are averaging 200 bushel/acre as compared to dryland corn which typically yields at 120 bushel/acre. Despite the lower yields, Phil highlighted dryland corn as a profitable crop venture due to lack of inputs. He currently plants a 108-110 day corn hybrid, which is shorter than the 114 day hybrids used in the past. Although he has previously tried to plant a cover crop, lack of rain makes it very challenging. For this reason, Phil finds it hard to justify the expense of the seed when the success of the crop is unlikely. When looking toward the future of dryland farming, Phil believes that innovation is essential. With best farming practices changing every five to ten years he encourages students to constantly look for new technology.

Economics and Leadership
Two hands holding a handful of steamed, flaked corn. Phil's background in economics quickly became evident during his talk with us. As mentioned above, forty years ago he left his teaching job as an economist to take over his family farm. He knew he wanted to add value to his product so he started exploring his options. Although he was originally exploring processing oil crops, after years of doing his homework and seeing where the demand was in the market he decided steamed flaked corn was the way to go. He had his own feedlot to support this business however his client base needed to be much bigger than that. He visited farms and got his hands dirty talking about what was wasted in manure and the amount of fines found in a typical steam flaked product from a larger feedlot. He was able to approach his customers with a product he knew could improve feed efficiency from 15-20%, his homework was paying off. Because of this, he was able to secure customers in both the dairy and feedlot markets with a fairly constant flow of demand. In 2016, they were able to produce 2.5 million tones of steam flaked corn and has since settled around 2 million tones a year. He stays competitive with the current corn prices, checking market prices twice a month. He charges a 39 cent/ bushel to process and is able to make a 18% margin on that price.

This success did not come without its struggles for Phil. He spoke of years when his father was farming and breaking even was the goal, only to be supplemented by a $1,500 crop insurance cheque to live off for the year. He also had struggles when it came to securing a loan so he could start the construction. Starting off he had little capital or experience with the business he wanted to get into and the banks did not approve of this. He struggled with this for quite a while before finally getting the ball rolling. Since then his bank struggles have continued, switching banks 4 times in 10 years as rates changed. He made it clear to not be afraid to shop around when it came to banks, let them be competitive with each other for your business.

We also asked Phil his opinion on the farm bill and if he believes it encouraged the production of corn over other crops, even though it may not be best suited for the area. He said he's sure it does, but he's also not sure what a better option would be. He believes that crop insurance is something that should be there to support farmers, however he does agree that parts of the farm bill should change. He seemed to think that in general change was good, economically speaking he thinks 5% a year is what people should be aiming for. This change may be a way to combat the volatility in the market although he confessed it is impossible to avoid completely. Therefore, it is important to not stretch your cash flow too thin, some changes are not for the better.

Before we left the question was asked if he had any advice for young people just getting into the working world and back to the farms. He pointed out a couple economic rules of thumb; do your homework, make sure its economically feasible, have rock solid management and be a marketing master. He felt that working off the farm before going back is also very helpful for young people.
As an active member of the community, Phil has a history of leadership in his local church, lions club, school board and hospital board. In addition to volunteering, he employs fifteen local citizens between the processing plant and the farming operation. With small towns lacking the conditions for success, Phil pointed to the absences of leadership as a significant problem. He strongly believes that young people need to take advantage of the leadership opportunities available in order to develop their skill set and excel in the workplace.

The Buffalo Bill Museum
Bronze statue of Buffalo Bill pursuing a buffaloWe finished our day with a stop at the Buffalo Bill Museum in Oakley, Kansas. The legend of William F. Cody, more famously known as Buffalo Bill, begins in the late 1860's. Buffalo Bill and his men were payed $500/month to hunt 12 buffalo each day. The buffalo were used to feed the 1200 workers that were laying the Union Pacific Railroad through the plains of Kansas. From 1870-1883 the once vast North American buffalo heard was destroyed largely due to fur trading. Fur traders would kill and skin buffalo for $0.50-$1.25 per skin, a practice Cody saw as irresponsible and unsustainable and he actively spoke out against it.  By 1888 Buffalo Bill owned the 4th largest heard of buffalo in North America that he used in his Wild West show, the heard consisted of only 18 animals.  His efforts in protecting this heard helped to prevent the near certain extinction of buffalo and many of the buffalo today are descendants of his heard.  A 16 foot, 9 000-pound bronze statue of Buffalo Bill pursuing a buffalo was erected in 2004 to commemorate his effort in saving this beautiful species.

The theme of dryland cropping systems provided University of Guelph students with the opportunity to learn about farming with a different perspective. In terms of production, students learned that instead of striving for higher yields, dryland farmers focus on managing inputs to maintain a reasonable bottom line. We gained valuable economic advice, as Phil shared the in's and out's of building a business and the role of leadership in that process. Leadership carried into our discussion on the social relationship between small towns and the local agriculture. With the dissipation of small family farms, and the growth of farm size, small communities are struggling to find the support they need. In addition to social struggles, finding a sustainable balance between successful farming and water management is also proving to be challenging. Not only did we learn about the realities of dryland farming, but we were able to listen to an experienced business man talk about the role of leadership in both business and the community. Our quick stops at historical landmarks added to our knowledge of the area and appreciation for the changing landscape.