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Department of Agricultural Economics

Center for Commercial Agriculture

PURDUE CENTER FOR COMMERCIAL AGRICULTURE

Knowledge for Farmers Leading Production Agriculture

2 | Center for Commercial Agriculture

The last 12 months have been an exciting time at the Center for Commercial Agriculture. We have seen the center grow from a simple concept into reality with actual programs and an emerging identity. We have already had many successes, and the following pages will highlight some of them.

While our history is short, our list of goals and aspirations remains long. We look forward to continuing to move toward the center’s vision of being the leading source of management education and knowledge generation for the farmers in the business of producing the world’s agricultural products.

The economic environment facing commercial agriculture is as volatile today as at any time in recent history. This environment presents many challenges and opportunities for commercial farm operations. The demand for the center’s products — applied research, management education for farmers and educational opportunities for undergraduate students interested in commercial agriculture — is strong. We are exceptionally well-positioned to deliver on our vision and have developed plans to continue to move the center forward in the coming years.

During the last year, we have crossed many important milestones. First, five leading agribusinesses agreed to become founding members of the center’s industry council. AGCO, Dow AgroSciences, Farm Credit Services of Mid-America, GROWMARK and Syngenta have all committed significant financial resources to helping the center achieve its vision. They have also committed key executives to provide us with input and guidance as we develop the center. We are honored and privileged to have these staunch supporters of commercial agriculture interests as partners.

Establishing the industry council was followed swiftly by commitments from 10 outstanding farmers to join our farmer council. We are truly fortunate that these individuals are willing to commit their time and expertise toward making our center relevant to commercial farmers. We look forward to working with them in the coming years.

In addition to developing the groundwork for the center’s operations and funding base, our faculty and staff have undertaken a number of outstanding programs over the last year — including the Top Farmer Crop Workshop, the Purdue Farm Tour and Making Financial Decisions. We also conducted research and held popular webinars exploring farmland values and managing risk in commercial agriculture. We have written widely read articles, and our faculty members have made numerous presentations throughout the country on these and related topics. These efforts have all worked to raise the profile of our new center and address important issues facing commercial agricultural producers.

While progress has been made, much work remains. Our faculty is currently working to develop new educational programs that will help farmers better evaluate and make decisions about growing their farm operations. We are launching a sophomore-level course in the coming spring semester that will expose undergraduates to heavy doses of out-of-classroom experiences in commercial agriculture. We are working to expand our offering of webinars and will complete a new research project on farmland values, among other activities. I am also pleased to note that we will be hiring a new associate director for the center in the coming months. The addition of another faculty member will substantially expand our ability to bring more projects to completion.

I hope that you will take a minute to examine the pages that follow to learn about some of the activities that we have completed over the last year. While there is much yet to do, we feel fortunate to be working in such an important area where we can have an impact that makes the world a better place. We hope that you will continue to support our efforts and join us for some of our programming; read some of our practical, applied research; or participate in one of our classes in the coming years.

Sincerely,

Brent Gloy, Director

Letter from the Director

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By the Numbers

11Programming days

25+Engagement presentations delivered nationally

10Graduate student research team members

6,429Unique site visitors since website launch }

793Program participants }

505Webinar viewers }

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4Applied research initiatives underway }


Don’t Bet the Farm: Land ValuesDramatic increases in land values throughout the Corn Belt have spurred great concern, causing many to wonder whether the current boom will end in bust. Historically, booming farm incomes have been quickly capitalized into farmland values. Over the past year, cropland values in the Corn Belt have jumped more than 25 percent, according to various university and Federal Reserve surveys. Moreover, ranchland values are posting strong double-digit gains in some regions of the country.

Farmland values, however, are shaped by more than farm incomes. Interest rate shifts affect the rate at which income flows are capitalized into farmland values. Urbanization and recreational use for hunting, fishing and wildlife-watching have also transformed non-farm demand for land in many parts of the nation. At the same time, the supply of U.S. farmland for sale remains limited. Together, strong farm and non-farm demand and the relatively limited number of farm sales have propelled sharp increases in U.S. farmland values.

Despite rising farmland prices, risks remain. While inflation adjusted farmland values have reached record highs, what are the risks that they could retreat once again? Farmland values are capable of falling just as sharply as they have risen, as evidenced by the 1970s farm boom and the 1980s farm bust. The volatility in agricultural prices has increased, and farm incomes have fluctuated widely over the past decade. Although the crisis of the 1980s is nearly 30 years behind us, memories of the financial hardship and personal loss that it caused remain and frequently cause people to question whether a repeat of the 1980s is in store for the agricultural sector.

An excerpt from “Don’t Bet the Farm: Land Values” written by Brent Gloy and Jason Henderson, vice president and Omaha branch executive, Federal Reserve Bank of Kansas City.

Farmland ValuesThe center has created a variety of resources to help people understand the current trends in farmland prices and how to value farmland. Work in this area has produced numerous papers and speaking opportunities and formed the basis of an issue of Choices, an online, peer-reviewed magazine published by the Agricultural and Applied Economics Association. Recent highlights include Center Director Brent Gloy’s presentation at Don’t Bet the Farm: Assessing the Boom in U.S. Farmland Prices, a March 2011 symposium hosted by the FDIC; talks before the National Ag Credit Committee and the Federal Reserve Bank of Chicago; a presentation at Bonnefield Financial’s Canadian Farmland and Agribusiness Investment Seminar; an article in the Purdue Agricultural Economics Report about Indiana farmland values and Gloy’s Web radio interview discussion of farmland values with Ray Bowman.

Gloy also collaborated with Purdue experts Mike Boehlje, Craig Dobbins, Bruce Erickson and Chris Hurt to deliver a webinar about farm values. Nearly 400 people viewed the webinar. Additionally, Gloy and Jason Henderson of the Kansas City Federal Reserve Bank were guest editors of a special farmland values edition of Choices magazine, to which Gloy contributed an article.

Resources from many of these events are available on the center’s website, including an archived webinar, video from faculty presentations, audio recordings and a series of narrated PowerPoint presentations that summarize the key factors related to the issue.

Center Activities


Managing Risk WebinarFarming has always been a risky business, with the returns to reward that risk available for only brief periods of time. The risk in agriculture today, particularly in crop production, is greater than it has been in the past, but there is opportunity to be rewarded for taking that risk.

In February 2011, the center delivered a webinar entitled Managing Risk: Capturing Opportunity. The webinar focused on management strategies that farmers can implement to position their business for success in these increasingly turbulent times. Sixty-two people viewed the webinar, which is archived on the center’s website, along with an article on the same topic that Professors Mike Boehlje and Brent Gloy wrote for the Purdue Agricultural Economics Report.

Center Hosts EICP Alumni WorkshopThe center hosted the 2011 Executive Institute for Commercial Producers (EICP) Alumni Workshop. Held in Louisville, Ky., on the site of the National Farm Machinery Show, the workshop covered key topics like drivers of change, crop budgets and land values, structuring decisions in turbulent times and the outlook for agriculture in 2011. The highly interactive sessions provided opportunities for participant questions and debate. Alumni participants also spent time strengthening the friendships and business relationships that were forged during the original EICP program.

“The program allows us to meet with our peers and expand our thoughts. It was a good opportunity to be challenged to think about our operation from a different perspective,” said one participant.

Center Hosts Brazilian Visitors from SyngentaThe center also intends to foster collaboration and learning among international farmers. Throughout August and September 2010, Syngenta Brazil brought seven groups of 40 producers to the United States for a weeklong overview of U.S. agriculture, focusing on corn and soybean production. Purdue was a stop on their tour, and the center coordinated their visit. Participants learned about the U.S. economy, farm

policy and the biofuels industry before visiting Purdue’s agronomy farm, where Ellsworth Christmas, retired professor of agronomy, discussed the cost of production in the Midwest and the fertility of Midwest soil.

44th Annual Top Farmer Crop WorkshopThe center delivered the 44th Annual Top Farmer Crop Workshop July 18-20, 2011, in Purdue’s Pfendler Hall. The workshop brought 85 farmers from 11 states and Argentina to Purdue. With nearly 25 guest speakers representing academia and agribusiness, the program offered both a management and technology focus, allowing participants to evaluate their farming operation and chart a course for the future.

The workshop is one of the most successful and longest-running programs geared specifically for farmers. Almost all of the center faculty and staff are involved in the long-standing success of this program. The 45th Annual Top Farmer Crop Workshop is set for July 9–11, 2012.


Farm Credit Services: Making Financial Decisions Farm Credit Services of Mid-America partnered with the center to offer Making Financial Decisions in Your Farm Business. Sixty producers attended the program, which guided them through the process of improving farm profitability and financial performance.

Intended to help producers accurately assess the strengths and weaknesses of their operation, the program included sessions on thinking like a CFO, cash income and earnings, financial performance, managing risk and profitability analysis ratios. It also included sessions focusing on equity, balance sheets and repayment. Center faculty members Craig Dobbins, Mike Boehlje, Brent Gloy, Alan Miller and Nicole Olynk delivered sessions during the two-day workshop, which took place in March 2011 at The Trails in Lafayette, Ind.

79th Annual Farm Management TourThe 79th Annual Farm Management Tour took place in June 2011. The tour included stops at six grain and vegetable farms throughout Indiana. The Farm Tour showcases Indiana farms and agribusinesses that have demonstrated highly successful farm business management practices or have unique perspectives on farm business management. The tour is intended to encourage and develop a high level of management knowledge and skill among Hoosier farmers.

Host farmers share their keys to successful farm management and explain how the management of

their operations is changing in response to the vibrant agricultural economy and the changing circumstances of their families. They also share their reasons for their recent innovations in production practices and adoption of new technology. The tour represents an opportunity to ask questions of and learn from the experiences of some of the best farm business managers in Indiana. The Department of Agricultural Economics at Purdue University has organized an annual Indiana Farm Management Tour every year since the early 1930s.

Average attendance at each stop of the tour was 325 with attendance peaking (342) at Villwock Farms, which showcased Chris Hurt’s outlook talk and a tour of the corn, soybean and popcorn farm owned and operated by Don Villwock, center farmer council member.

Video Series: Strategic Positioning for Successful Farmers and Fishermen Professor Mike Boehlje developed a series of six video modules that describe a planning and management process farmers can use to successfully position their farm businesses. In each video, Boehlje describes concepts and walks the viewer through applying the concepts to his farm business. Available to stream via the center’s website, the series features the following topics: What is Strategy?, Looking Outside Our Business (Opportunities and Threats), Looking Inside Our Business (Strengths and Weaknesses), Strategic Positioning for Sustainable Competitive Advantage, Implementing Strategy, and Monitoring and Measuring Success.


Economics of Prevented PlantingWhen corn planting in the Eastern Corn Belt was significantly behind schedule, many farmers were forced to consider exercising the prevented planting provisions in some crop insurance products. This can be a complex decision.

In response, center faculty analyzed the economic dimensions of the situation and prepared articles and spreadsheets to help farmers understand the implications of the decision they faced. Specifically, the resources allowed farmers to consider their options — accept a prevented planting payment, plant corn after the crop insurance deadline or switch to soybeans. These resources, along with links to other information, are available on the center’s website.

Fertilizer Purchase DecisionsIn today’s economic environment, prices can be quite volatile — especially in the case of fertilizer. The recent increase in fertilizer price volatility has placed more importance on the timing of fertilizer purchases. Commonly, farmers choose to purchase and apply fertilizer in the fall rather than spring as a price management strategy. Center faculty members have authored a study examining this strategy. Available on the center’s website, the study compares fall to spring prices for common fertilizers using historic Indiana retail prices and price data from the USDA. It enumerates the pros and cons of spring and fall fertilizer purchases.

Helping Livestock Farmers Reduce Methane Emissions: Anaerobic Digestion and Bio-EnergyIncreasing interest in reducing greenhouse gas emissions has drawn attention to agricultural practices and the management practices that can reduce them. Methane emitted from livestock waste storages is a significant source of greenhouse gas emissions in the United States.

Methane emissions can be significantly reduced through the installation of an anaerobic digestion system, which captures methane from livestock waste storages and combusts it, typically in an electrical engine generator, allowing farmers to create renewable energy. While systems have been commercially available for many years, they have not been widely adopted on U.S. livestock operations. This is because, when compared to the energy savings and sales revenue, the costs associated with installing the systems have typically been prohibitive.

The center’s goal is to help farmers understand the economic issues related to adoption of an anaerobic digestion system. Center Director Brent Gloy has authored several papers about the technical and economic feasibility

of installing an anaerobic digester on dairy and swine farms. The research is available online, along with two spreadsheet-based tools, which can be used to help evaluate the economics of an anaerobic digestion project.

Gloy’s work in this area has led to presentations at the Northeast Agribusiness Seminar (“The Future of Bio-Energy”),

the Renewable Energy World Conference (“Creating Renewable Energy from Livestock Waste”), the Northeast Sun Grant Regional Feedstock Summit, the NYSERDA Innovations in Agriculture Conference (“Opportunities for Renewable Energy on Farms”), and the Cornell Manure Nutrient Management and Renewable Energy Workshops (“Digester Economics and Financing”).


Five leading agribusinesses have become founding members of the center’s industry council, which will keep the center focused on issues relevant to commercial farms and undergraduates in the College of Agriculture.

All of the companies have made significant financial contributions that will be used to develop innovative educational programs for farmers, react to timely research needs in commercial agriculture and provide undergraduate students with out-of-classroom opportunities for engagement on commercial farms. A key executive from each company will participate in council meetings and priority-setting discussions. Industry council representatives include:

Doug GriffinVice President of Global Marketing and Brand Management, AGCO

Griffin joined AGCO in 2002, where he develops global branding and marketing programs. He received a bachelor's degree in agricultural engineering from Purdue and has completed executive training programs at Bradley University and Emory University. He was named a 2011 Purdue Distinguished Agricultural Alumnus.

Vern HawkinsPresident of Commercial Operations and Regional Director for North America, Syngenta

Hawkins is a 26-year Syngenta veteran, rising through the ranks from sales territory manager to his current positions in the company’s crop protection and seed businesses. He received a bachelor's degree in agronomy from Purdue and an executive MBA from Temple University. He was named a 2011 Purdue Distinguished Agricultural Alumnus.

Stan HowellVice President of North America Regional Commercial Unit, Dow AgroSciences

Howell is responsible for overseeing the company's agricultural chemical, turf and ornamentals, urban pest, healthy oils, and seeds and traits businesses in the United States and Canada. He also is president of Phytogen Seed Co. He received a bachelor's degree in marketing from Indiana University.

Dick PoeSenior Vice President of Financial Services, Farm Credit Services of Mid-America

Poe oversees the management and sales of 43 Farm Credit Services offices in Indiana, Ohio and northern Kentucky. He began his Farm Credit career in 1982 as a loan officer in Washington Court House, Ohio. Poe received his bachelor’s and master’s degrees from the University of Kentucky.

Jim SpradlinVice President of Agronomy, GROWMARK

Spradlin leads the company’s seed, crop protection, plant protection, plant food and facility planning and supply divisions, and GROWMARK’s Agronomy Marketing and Agronomic Services. He joined GROWMARK in 1982 after receiving a bachelor’s degree in business administration and economics from Illinois College.

CCA Industry Council


Members of the center’s farmer council will provide a voice for the farming community, helping the center better understand the diverse needs of farmers in today’s dynamic industry. They represent some of the most innovative and successful farming operations in the nation and are committed to helping the center identify important projects and build successful programs. The founding members of the center’s farmer council include:

Back Forty Farms — Bob WadeBack Forty Farms is a 3,500-acre corn and soybean operation located in Sonora, Ky., 50 miles south of Louisville. Formed in 1987, Back Forty Farms has been 100 percent no-till since the introduction of Roundup-ready soybeans.

Hardin Farms — David HardinHardin Farms is a 600-sow farrow-to-finish unit that produces 12,000 pigs annually. David received a bachelor’s degree in animal science from Purdue in 1996 and a master’s degree in business administration from DePaul University in 2002. In 2006, he was president of the Indiana Pork Advocacy Coalition. He has been a member of the board of directors for the Indiana Pork Producers Association since 2005. He has worked at the Chicago Board of Trade and at JBS United.

Howell Farms — David HowellHowell Farms is a diversified family farming operation headquartered in central Indiana. The crop mix includes pumpkins marketed through large national retailers, traditional corn and soybeans, and tomatoes contracted exclusively with the country’s largest tomato processor, Red Gold Inc. of Orestes, Ind. Howell Farms also

produces corn and soybeans in Western Bahia, Brazil.Cofounder David Howell earned both bachelor’s and master’s degrees from Purdue University in agricultural economics. He serves on the advisory council for the Federal Reserve Bank of Chicago and is chairman of the U.S. Grains Council’s Asia Advisory Committee. He also serves on the advisory board for the Indiana Department of Agriculture and is a founding member of Indiana’s Corn Marketing Council, of which he currently serves as vice chairman. He has previously served on the boards of First Merchants Bank and the American Farm Bureau Federation, in addition to the Dean’s Advisory Committee at Purdue. David was named a Distinguished Alumnus of Purdue University and an Indiana Master Farmer.

Lennard Ag Co. — Kyle LennardLennard Ag Company is a family owned and operated farm growing potatoes and grain crops in southern Michigan and northern Indiana. Established in 1947, Lennard Ag is a three-generation-deep operation that produces more than 6,600 acres.

Kyle Lennard has led the company’s expansion over the past seven years, more than doubling production by introducing a second location, increasing acres and crop diversity. Kyle has previously served on the U.S. Potato Board and the National Potato Council Leadership Institute. He holds a degree in biosystems engineering from Michigan State University with a background in food science.

River View Farms — Bryan JohnsonRiver View Farms is a multi-generation, family owned business centered in southern Indiana with a main office near Orleans. As a diversified operation, River

CCA Farmer Council

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View Farms is involved in several facets of poultry, producing turkeys, eggs and pullets, which supply needs in the layer industry. They raise live market hogs through a sow herd and a coordinated network of contract growers. They also produce corn and soybeans on 3,400 acres of rolling Indiana farmland.

Bryan Johnson is the farm’s vice president. He manages three areas of the operation, including turkeys, eggs and feed manufacturing, while also organizing the business’ financial aspects. He attended Purdue University in agricultural economics and currently is a part of the Farm Policy Study Group at Purdue.

Tom Farms — Kip TomTom Farms is a multi-generation, family owned organization firmly planted in fertile prairies of northern Indiana. It has evolved into a global crop production, sales and service company and industry leader. Today, Tom Farms is one of the leading suppliers to Monsanto’s seed production supply chain.

Kip Tom leads finance, strategy and production operations for Tom Farms in the United States and South America. He has worked in various capacities, from production technician to director of development in Latin America. He has maintained hands-on involvement with all farming operations.Kip received his associate’s degree in agriculture management from Texas A&M University, where he also attended the Texas Executive Agriculture Program. In addition, he has taken executive MBA courses from the Harvard School of Business and attended the Midwest Food and Agribusiness Executive Seminar, sponsored by Purdue University and Wells Fargo.

Villwock Farms — Don VillwockVillwock Farms is a 30-year no-till, sustainable operation producing white corn, popcorn, seed corn, seed soybeans and seed wheat. The original farm consisted of 170 rented acres. Today, the operation includes 1,000 owned acres and more than 3,000 rented acres from 16 landlords.

Don Villwock is a 1972 graduate of Purdue University with a degree in agricultural economics. He currently serves as president of Indiana Farm Bureau and Indiana Farm Bureau

Insurance. In addition to Farm Bureau, Don has been involved with the Indiana Corn Growers, Indiana Soybean Growers and the Indiana Pork Producers. He has also served as chairman of the Indiana Institute of Agriculture.

Walnut Grove Farms — Sam HalcombWalnut Grove Farms is a family farming operation based in the community of Schochoh, Ky., located 50 miles north of Nashville, Tenn. The farm is currently managed by the fifth and sixth generations of the Halcomb family and produces corn, soybeans, wheat and barley. Sam has previously worked for Caterpillar in Monterrey, Mexico.

White Oak Farms — Rob MannWhite Oak Farms, located in Cloverdale, Ind., is a partnership between Fred Mann (father) and his sons, Rob, Chris and Joe. The business consists of an 8,000-acre grain operation and produces 20,000 market hogs each year through its swine finishing unit.

Rob is the operation’s business manager and focuses on marketing, risk control, finance and tax management. He also has responsibilities as a managing member of Mann Land LLC, an agricultural land-holding company. Rob earned a bachelor’s degree in agricultural economics at Purdue University and is a member of Indiana Farm Bureau. He has received the Indiana Young Farmer of the Year award and been named the Prairie Farmer/Purdue University Master Farmer.

CCA Farmer Council

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Center Faculty and Staff

George PatrickProfessor

Megan SheridanMarketing Director

Nicole OlynkAssistant Professor

Michelle QueryOffice Manager

Tim BakerProfessor

Mike BoehljeProfessor

Corinne AlexanderAssociate Professor

Freddie BarnardProfessor

Liza BraunlichDistance Education Specialist

Craig DobbinsProfessor

Joan FultonProfessor

Angela GloyFarm Business Planning Specialist

Ken FosterDepartment Headand Professor

Melissa FunkAdministrative Assistant

Brent GloyDirector and Professor

Aissa GoodSenior Project Manager

Alan MillerFarm Management Specialist

Chris HurtProfessor

Tammy KettlerDirector of Corporate Relations

Allan GrayProfessor

Kristyn KapetanovicMarketing Assistant

Jim MintertAssistant Director of Purdue Extension

Center for Commercial Agriculture403 W. State StreetWest Lafayette, IN 47907-2056(765) 494-7004www.agecon.purdue.edu/commercialag