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- DTN Headline News
3 Farmers Find New Revenue Streams
By Katie Micik Dehlinger
Friday, April 12, 2024 3:26PM CDT

MT. JULIET, Tenn. (DTN) -- Erik Oberbroeckling needed to find a way to support his income when he returned to the 1,200-acre family farm in 2004.

The farm needed another semitruck to speed up harvest and haul grain, and when it wasn't being used during the farm's slow seasons, Oberbroeckling put it to work hauling boxed beef from a local Iowa packing plant to Chicago. After that plant closed, he hauled anything that could be carried in a hopper.

In 2013, a local mine needed someone to haul silica sand to a rail-loading station 35 miles away, where it was then sent to North Dakota oil fields for use in fracking. Oberbroeckling put his trucks to work, and a business was born.

"Trucking and farming are symbiotic," the Garnavillo, Iowa, farmer said. The shop was built to maintain the truck fleet, but it services the farm equipment, too. He's sold grain into farther away markets with better basis because he had a backhaul.

The trucks also enabled the farm's expansion. By 2013, Oberbroeckling, his father and his brother grew corn and soybeans on nearly 2,500 acres in a 20-mile circle around the farm's headquarters. That circle is 45 miles wide today, encompassing nearly 4,500 acres, thanks to a truck fleet that keeps grain moving from the field to the bins during harvest.

"It's opened up quite a few doors," Oberbroeckling said. What started as a way to earn his keep grew into a big opportunity, but it's one that comes with its own set of challenges and rewards.

FEAST OR FAMINE

The fracking boom kept Oberbroeckling and several full-time employees busy until the price of oil fell to $30 a barrel in 2015, killing demand for silica sand.

Oberbroeckling was forced to pivot. One of his drivers saw an advertisement looking for owner-operators to pull milk tankers. Oberbroeckling put on a nice pair of jeans, a polo shirt and cowboy boots, and paid a visit. He still hauls for that company -- and several others -- today.

"You can't build a business on feast or famine, and you have to be ready for the opportunities," he said. He ventured into general freight during the pandemic trucker shortage, but today, he mostly pulls milk tankers and commodities in hopper-bottom trailers.

Oberbroeckling said trucking provides a much higher return on assets than farming. A new truck and trailer may cost $300,000, but it also grosses $300,000 a year. A farm can spend close to $1 million on a new combine and grain head that are used seasonally and take years to earn their worth.

He operates the businesses separately, and one business will bill the other for any costs incurred for the other enterprise. It helps Oberbroeckling get a true picture of each business's profit margins.

"Outside of ag, businesses generally expect profit margins of 20 to 30%," he said. That's where the trucking business lands. It's usually more consistent year to year than the farm, as well.

Over the past 15 years, the farm's profit margin has averaged 10%, but that's ranged from minus 2% to 30%.

While commercial trucking may sound enticing to farmers with an underutilized semi, Oberbroeckling cautioned that it's a year-round business with demanding labor requirements.

"Farmers generally want to do things ourselves, but you can only build so much of a business by yourself," he said. In the winter of 2021, Oberbroeckling hired a longtime friend to take over day-to-day responsibilities.

"It's allowed me to go find more opportunities to grow the business," he said. Since then, the fleet has more than doubled to 22 trucks logging 2 million miles annually.

BALE BY BALE

Evan Hellerud grew up on his family's row-crop and beef operation in the Red River Valley, but "the hay and straw have really been my bread and butter," he said. Over the years, he's sold hay as far away as Texas and straw to Churchill Downs, home of the Kentucky Derby.

He returned to Shelly, Minnesota, after finishing business school in 2007 and began baling wheat straw for a neighbor. Then, another offered a crop-share arrangement on alfalfa. Now, he sharecrops alfalfa with three neighbors and cuts straw for five, all within seven miles of his home farm.

By 2014, Hellerud needed more efficiency, so he purchased two Massey Ferguson 3- x 4-foot balers. The big square bales are similarly sized to his previous 3- x 3-foot bales but are twice the weight.

"That's half the bales to handle. One baler can travel faster. It's made a world of difference as far as productivity," he said. Trucks are easier to load, and in the case of straw, which is lighter than hay, Hellerud can now fit 22 tons on a truck instead of 15. "That makes a big difference to me and to the final end user," he said.

His straw is also long-cut, about 1.5 to 2 feet in length. That's because several of his neighbors use conventional combines, which don't grind the straw up like the more common rotary combines do.

While that sometimes made the straw harder to sell, it paid off in 2017 when a broker buying for Churchill Downs called him. It needed long straw and had an outfit that could rebale it into small squares suitable for horses.

"Ultimately, it was my product being used there," he said.

At its peak, Hellerud put up close to 20,000 bales of straw. Now that he runs 1,000 acres of alfalfa, he's baling less straw to manage the equipment and labor crunch that comes during the overlapping cutting. "It's a lot less stressful," he said.

MENTALITY SHIFT

Ten years of running his own business set Hellerud up to buy the family's row-crop operation in 2017, giving his father more time to focus on his cattle business.

"It was quite a transition to figure out," he said, since the family didn't do much advanced planning. His dad helped him learn how to do the accounting, sell grain, purchase inputs and buy crop insurance after the transition, and he still helps on the operation today. But, Hellerud makes the decisions.

The corn, soybean and wheat operation has grown to 3,600 acres. While there have been tough years on both sides of the business, Hellerud said the haying equipment gives him flexibility to create income in other ways.

He once did a custom-baling run in Kansas and South Dakota. Another time, he lent his friend the equipment for a percentage of each bale.

"They don't make any money sitting in the shed," Hellerud said.

Recently, he's shifted his focus from mastering production to mastering the business aspects of farming. He recently attended The Executive Program for Agricultural Producers, better known as TEPAP, and has been working with his uncle, who worked in successful businesses outside of agriculture.

"It's become blatantly clear to me that the production side of things is 20 or 30% of farming. The business side makes up the rest," he said. "A lot of farmer mentality is that weather dictates everything, but if you have a good grasp on all facets of the business of farming, the uncontrollable events won't have near the effect as you think."

IDEA IN BLOOM

Leah Pottinger was the nonfarming spouse until last year. Aside from working for a health care company, she's spent 12 years as a professional photographer.

She's always loved the orange, yellow and pink sunsets on the hilltop of her husband's ninth-generation farm, in New Haven, Kentucky, and has dreamed of growing flowers to match the sky. In 2023, she rented 2 acres from her husband and started a flower farm.

Her husband, Quint, used the farm's drill to plant a mix of wildflowers and clovers on most of the acreage, while she used a one-row, walk-behind planter to seed eight varieties of cut flowers on the rest.

"I thought, 'Let me see if I can grow some flowers first, and I'll develop the market after that,'" she said. Later that summer, she was cutting cosmos for a florist. It took her three hours to gather enough flowers for five bundles, which sold for $10 each.

That's when she realized she would make more money renting the farm to photographers to take portraits.

Photographers generally pay a fee to shoot on location. Public parks, for instance, require a permit that's about $100, while private venues generally charge $100 to $150 per hour.

"The return on my time is a lot better. For me, that's a priority," she said, adding that it takes 20 photo shoots at $150 an hour to cover her seed and land costs.

She did a few trial runs with local photographers last year and plans to begin marketing in Lexington- and Louisville-based photography Facebook groups. She's going to stagger plantings and varieties so there are blooms from early summer until late October to extend the season.

Pottinger still plans on growing flowers to cut, but this time, they'll all be white.

"I grew a lot of color last year, because I love color, but in talking to the florists near me, they all asked if I had anything white" for weddings, she said.

TOUCH OF TOURISM

Pottinger said the flowers fit in the overall vision of Affinity Farms. The 3,600-acre farm grows corn, wheat, rye and soybeans, with almost all of the grain going to local distillers of Kentucky bourbon.

Value-added production is important, but so is supporting the local economy. The farm hires locally, and the Pottingers believe that small, rural towns are better places to live when they have a variety of businesses.

Last summer, one of the farm's truck drivers told her that he smiled every time he drove by the flowers.

"I'm bringing joy, and that's another way to serve our community," Pottinger added.

She's already thinking of ways to bring more people to the farm beyond taking pictures. She's starting to talk to local businesses about possibly hosting a concert series or painting classes. Maybe they could team up with a local distillery for tours.

But, in the meantime, like most farmers, she's finalizing her plans for planting, which will start after Derby Day on May 4.

Katie Dehlinger can be reached at katie.dehlinger@dtn.com

Follow her social platform X @KatieD_DTN


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