Edition #25

January 20, 2024

Good morning and welcome to the Braintrust Ag newsletter. We’re the chicken protectors… keep chickens safe by reading this email and staying off the icy roads.

A couple notes to begin:

• Happy to report we hit that 150 member goal last weekend… and we’re up to 164 members. Welcome one & all!

  • Become a member by clicking here.

• Last week’s SOIL Gathering was plagued by tech issues on my end, so a big thank you to the members who stepped up & kept the discussion going.

• We had an excellent Expert Q&A with Angie Setzer last week and learned all about building a grain marketing plan from the ground up. Thank you for taking the time to educate & entertain, Angie.

Alright, let’s get to the topics that will help you build a strong, sustainable agri-business.

-Clint

Here’s what we have this week:

• 💭 Out-of-the-box Idea

• 🌱 Seeds

• 🧓 18 Transition Q’s

• 🚓 Insurance Fraud

• 🤝 Personality Tests

• and more…

THE BIG IDEA

Thinking Differently

I posted this on X/Twitter last week and was surprised at the amount of reactions and engagement it received:

You may have already seen this, as it has 157,000 views and piles of comments, but I’m sharing it here to summarize some of the thoughts and takeaways from people’s reactions.

This particular farmer has indicated he and his family view their farming operation as a family business, nothing more; nothing less. They intend to treat it as they would any investment of capital, time, energy, and other resources. That’s why the question came up and they’re 50/50 on considering some variation of this strategy.

With a young family, they recognize this opportunity to take a step back from the demands and stress of the farming operation to watch their kids and liquid wealth grow, rather than the primary focus of watching the crops grow.

Now, the comments and reactions to this out-of-the-box thinking landed in a handful of camps:

Jealousy

I’ll list this one first to get it out of the way. Some folks are jealous of someone having these numbers and make that known. That’s their prerogative. To note, the farm family said a large reason they might NOT do some form of this strategy is because they’ll feel compelled to move away from home due to the local jealousy.

It’s unfortunate that within the relatively small world of ag, we can’t celebrate each other’s wins and resort to jealousy. I’m of the opinion a rising tide lifts all boats and there are plenty of outside forces against production agriculture… Maybe that energy ought to be used against those anti-ag, rather than tearing down fellow farmers.

Curiosity

Many comments questioned how this balance sheet could exist, or if it was even real. I had the same question. The explanation I received were these keys to financial success:

• Buying land for “cheap” years ago

• 25 yrs of frugal farming and attention to financial details

• Favorable below-market family rent on some of the 2,000 rented acres

• Capitalized on the last few really good years to clear up debt & avoid “tax-based” purchases

This type of balance sheet is certainly attainable with a focus on a long-term time horizon and doing the little things right.

Advice

There were many tips and pieces of advice given with the majority falling in one of two buckets: investment or legacy.

1. Investment. The scenario was presented to sell the liquid assets and invest in the S&P. Many suggested investing into more land or treasury bills or other alternative investments. One of this family’s goals is to keep things liquid in case other opportunities come up. Obviously nobody knows the future or what the markets will do (Warren Buffet had a famous “bet” along those lines) so any investment they do will come with some risk. Good thoughts and considerations on the investment guidance in the thread, though.

2. Legacy. A common concern was the young kids not being involved in the day to day operation of the farm and their willingness to return to the farm. As someone who grew up on an acreage instead of a production farm w/ relatives who farmed, I can assure you we cannot anticipate what the kids will be willing or unwilling to do in 10+ years. No land is being sold in this scenario, so the opportunity is being preserved for the next generation, should they choose to go that route.

Both categories of advice seemed generally well meaning and supportive and I think one of the true values of the internet is being able to gain many perspectives from many points of view and make our own educated decisions.

Congratulatory

These were my favorite comments. Those who voiced support, applause, and the awareness that if this operator has managed his farm business this well, this isn’t a rash decision. And to take it a step further, there were many who truly wanted to say, “well done…how can I achieve a similar outcome?” If you’re in the position of being happy for a producer who has seen financial success and view that as a goal for your own operation, I think you’re coming from a great place.

To wrap it up, I’m appreciative of learning from others who have been there, done that and thank the folks for taking time to comment and educate many of us. If you can filter out the noise and occasional negativity, there’s true value in sharing and learning from others within the industry… and I hope that collaboration will support ag as a whole.

Heck, I guess that’s what Braintrust Ag is meant to facilitate.

SEEDS

• 🐮 RMA: There’s a “Livestock Roadshow” being put on by USDA to help livestock producers better understand livestock insurance products and the various updates and improvements.

• 💰 Billionaire “Farmer”: Here’s a story that’s quite the long saga, but something I expect folks to have varying opinions on… a New York billionaire who owns more than 400,000 acres in CO, KS, and NM and his future plans in the ag industry.

• 💡 More w/ Less: Here’s 9 tips to up your efficiency in your personal and professional lives.

• 🚓 Insurance Fraud: Grab a bowl of popcorn and read this tale of one of the largest crop insurance scams of all time. After six years, this farm couple was nailed for over $9M in fraudulent crop insurance proceeds.

• 🐃 Bull Value: Here’s an article breaking down what an Angus bull should cost… Spoiler alert: it’s whatever 4-5 calves are worth.

Become a member today for lifetime access to everything. It’s a small one-time cost with NO recurring subscription.

FARM TRANSITION

A couple weeks ago we talked about the importance of goal setting. A sub-category would be identifying various goals and objectives for farm transition & estate planning.

Often, I find it helpful to get some prompts to identify what is truly a priority when creating goals.

Here are 18 Farm Succession Planning Objectives you can ask yourself & your family to help understand the importance of each scenario.

Just rank each statement from 1-5 with 1 being “not very important/no” and 5 being “very important/yes.”

1. It’s crucial that all children agree with our outlined plans for the operation’s future.

2. We want the children to be involved with decision-making concerning the farm’s direction.

3. We intend to provide financial backing to children who opt for a career in farming.

4. Our aim is to minimize tax obligations during the farm’s transition as much as is feasible.

5. We’re apprehensive about what our children not engaged in farming will receive as their legacy.

6. We aspire for the asset distribution among our children to be equitable, not necessarily equal.

7. Kids who are not directly participating in farming activities should nevertheless have a voice in the proceedings.

8. The children who contributed labor over time are entitled to a larger share of the farm due to their “sweat equity.”

9. We want the on-farm children to have hands-on experience before they assume full responsibility.

10. This farm is the inheritance of my children and they should not be burdened with purchasing it.

11. We aim to receive full market value for the farm upon its succession.

12. We will need to keep drawing a financial income from the farm in retirement.

13. We wish to remain included in the farm’s management decisions for the remainder of our lives.

14. We wish to remain included in the farm’s financial decisions for the remainder of our lives.

15. Remaining physically involved with the farm operations is a high priority.

16. We wish to live on the farm as long as possible upon retirement.

17. We are comfortable if the farm is handed over/sold to a relative, friend, neighbor, or unrelated person instead of immediate family.

18. Our desire is for the farm to stay within our family heritage.

Click Here to access the .PDF version of this worksheet.

UPCOMING EVENT

1. If you’re near Shelby, Montana (my understanding is it’s pretty much Canada…) next weekend, come out to the Montana’s Next Generation Conference and say “hi.”

I’ll be giving three presentations on Saturday, January 27:

• Playbook for Beginning Producers To Break Into Ag

• Transition Planning: Ensure a Smooth Handoff

• Estate Planning: Leaving a Lasting Legacy

COMMUNICATE & MANAGE EFFECTIVELY

I recently met a gentleman who was telling me about conflict resolution and personality tests for ag folks. I asked him to provide some insight for this week’s newsletter. Here’s what consultant Matt Boos has to say on the topic:

—

Have you ever faced a communication breakdown with a co-worker or family member on the farm?

As a leader, have you struggled to understand what motivates and inspires someone on your team?

In this article, we’ll explore the “Leatherman of Personality Tests” – DISC – and how it can address these challenges.

In my early encounters with the power of DISC, I navigated a situation where two salesmen had reached a point of not speaking to each other. Their personalities, as revealed by the DISC assessments, were complete opposites. By simply sharing their assessments, they gained profound insight into why they clashed. Though their relationship didn’t transform into perfection, it became manageable.

This week I spent time evaluating a farmer customer’s DISC along with his four full-time employees. This farm had two primary reasons for seeking this understanding.

First, he was baffled by the sudden departure of an employee.

Second, he was gearing up for growth, planning to hire additional staff and enhance team management.

Key takeaways from this session included:

• Understanding the D Bossy Tendency: It’s crucial to recognize and not be annoyed by assertive tendencies in certain personalities.

• Sharing Detailed Information with C’s: Communicating with detail-oriented individuals requires providing comprehensive and thorough information.

• Giving Time to S’s for Processing: Individuals with a steady and cautious approach need ample time for processing information and delivering results.

• Affirmation for I’s: Those with influential and outgoing personalities thrive on affirmation, so providing lots of positive feedback is essential.

In a farm setting, I strongly recommend having every key stakeholder take and understand their unique personality, fostering a common language on personality and workstyles.

Here is my four-step process to implement DISC effectively:

1. Visit www.discpersonalitytesting.com: This site offers an easy credit purchase system and provides affordable reports at $39.

2. Buy Credits for Stakeholders: Eliminate potential objections by purchasing credits ahead of time.

3. Set a Deadline: Establish a clear and realistic deadline for stakeholders to complete the personality test.

4. External Perspective: To ensure objectivity, have someone with an outside perspective review the tests. Visit www.mattboos.com to book a free 30-minute call for a detailed DISC report analysis.

With over 20 years of experience, I’ve witnessed DISC emerge as a valuable tool for providing a common language that significantly enhances communication, teamwork, and productivity on the farm.

-Matt Boos

MEME OF THE WEEK

That’s a wrap, folks.

Until next week, thank you to everyone involved in ag. Come engage on the new platform & let’s grow profitable ag businesses together.

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DISCLAIMER: All content, communications, and resources provided by Braintrust Ag, its principals, operators, or members is intended to merely be educational and entertaining. Nothing published by Braintrust Ag should be relied on as legal, financial, investment, or other professional advice. Investments and legal matters involve substantial risk and are not suitable for all individuals. It is recommended to enter into a client relationship with an ESP for obtaining professional advice.