By a strong stroke of luck, the United States is one of the largest countries in the world located in a zone on the planet extremely favorable for the production and harvesting of food. America’s family-run farms have produced food and grain that has fed the world for hundreds of years. As the country began to grow and industrialize, farmers soon came to realize that economies of scale made more sense and came together to form cooperatives, which could negotiate better pricing in both the sales and the purchase of commodities, giving farmers an assured market for their products.
SilverEdge Cooperative (SEC) was formed by a group of famers in eastern Iowa in 1931. The non-profit cooperative has been enriching the lives of its members for almost 80 years and counts roughly 990 local farms as members of its cooperative. Tony Hemann, CEO of SEC, outlines one of the biggest challenges facing family-owned farms in recent years.
“Livestock used to be big around here, but the economy has killed that. The price of grain has gotten so high that the livestock farmers can’t make money. Dairy, pork and poultry farms are all closing because they can’t afford to sell their produce. Here in the U.S. the cost of food is still quite a bit lower than the rest of the world, but those costs are going to be going up really quickly because we’re not producing meat like we used to. It’s all ending up in the hands of consolidated agribusinesses who are going to start being able to dictate the prices and we’re all going to be paying for it in the end.”
Grain Prices Cost-prohibitive for Livestock Farmers
Hemann reveals that SEC maintains three processing facilities in Edgewood, Strawberry Point and Delhi, Iowa. “Strawberry Point is our agronomy center, we process feed and agronomy at Delhi and all of our grain comes through Edgewood.”
Hemann says that SEC processes the full range of agricultural products and also maintains a fleet of state-of-the-art farm equipment and semis that do everything from helping its fellow farmers both plant and fertilize their fields to transporting crops to a processing facility. “All of our equipment has GPS (Global Positioning System) and auto-steer with variable rate technology on top of that.”
Variable Rate Technology (VRT) for those that aren’t familiar with it is one of the biggest technological advances in the farming industry in years. It is used to help reduce overplanting or over-application by using site-specific information including soil quality and plant health to determine exactly how much seed, fertilizer, pesticides, etc. is required. The technology was driven by the farmers who needed a way to determine exactly how much product was required for optimal growth vis-a-vis higher farming costs.
Customized Crop Protection Products
SilverEdge provides its’ member farms with the full range of services needed in order to flourish. “We supply everything, from plant food in both dry and liquid form to a full range of crop protection products, which can be customized to meet both the farmers needs and the soil requirements,” adds Hemann. The company also maintains a revenue stream by supplying local contractors and construction companies with diesel and gas.
Another one of the reasons for the cooperatives success over the years has been due to its’ executive leadership acknowledging the importance of building relationships with both members and vendors alike.
“When you establish a good relationship with a reliable and respectable entity, like our auditing company or our insurance provider, you need to show loyalty to them. The last thing I want to do is keep jumping ship just to save a few dollars,” continues Hemann. “In the end you really do get what you pay for. I strive to find the balance between making sure that I get the company the best value, but I’m also protecting the equity they’ve (the farmers) have built up.”
Hemann further details a challenge facing every farmer in the industry right now; government regulations and the paperwork associated with them. “It’s a full time job really. We have to stay in compliance with regulations put out by the Department of Agriculture, the EPA and OSHA to name a few, and it’s not just us, it’s our member farms as well. I understand why all of these rules are in place; people can get hurt badly doing this, but it finally reaches a point where it’s a full-time job just to keep up with the paperwork and staying current with new regulations that are coming into effect.”
In spite of the many obstacles facing America’s family-owned farms, cooperatives are providing farmers with the tools needed in order to survive in the increasingly complex world that we inhabit today. SilverEdge Cooperative and Tony Hemann are helping the iconic image of the American farm survive the transition into the 21st century.