American agriculture is unmatched around the world. Yet with this success comes an even greater challenge: Who will replace the half-million farmers and ranchers who plan to retire over the next two decades? Look no further than our next class of America's Best Young Farmers and Ranchers. They are among the best of their generation. They embrace the future of agriculture and are developing the technical and managerial skills to build their own successful businesses.
Corn stands tall in Darren Grogan's memories. Early in his teens, the Arlington, Ky., youth was tending all 300 acres of the family farm–harvesting and hauling corn on Saturdays and after school.
"Row-crop farming has been part of my life for as long as I can remember. But the work gave me a love for farming," Darren explains. "Plus, it gave me experience on how to do things on my own."
Work is genetic to the entrepreneurial Grogan family. These days, the Grogan family business is Triple G Farms, a partnership of father, Bobby, Darren's brother, Brian, and Darren, who oversee a tightly efficient operation of 16,000 acres and a web of related entities.
There once was a day when sausage was king around the Grogan household.
It began in 1973. The price of farmland in Iowa was $635 an acre and rising 30% annually. The World Trade Center's Twin Towers were officially named the tallest buildings in the world, and, in October, the Organization of Arab Petroleum Exporting Countries launched an oil embargo against nations that had lent support to Israel during its Yom Kippur War with Egypt and Syria. Oil prices quadrupled. Retail gasoline prices in the U.S. rose from 39 cents to 53 cents a gallon. Gas lines formed all over America. Darren was born that year, too.
It was also in 1973 when his father opened a custom slaughterhouse to process meat for local farmers and ranchers. By the time Darren was 10, the business had become successful, selling premium breakfast sausage under the moniker "Grogan's Farms Country Sausage." When the business was sold in 1996 to Atlantic Premium Brands, Grogan's Farms was selling 4.5 million pounds of breakfast sausage in eight states.
"I was taught at an early age the value of hard work and was actively involved in the daily operations of [Grogan's Farms] after school," Darren says. It was there that he gained experience in the workings of electrical and mechanical systems. Darren learned about people, too, about the diplomacy needed to manage customer accounts and working with his father's employees.
There was a farm in the Grogan family back then. It was 300 acres of rolling hills and rich bottoms a half-dozen miles from the east bank of the Mississippi River.
As the sausage business consumed his father's time, the work of the farm fell increasingly to Darren. The Grogan family farm continued to grow, too. By the time Grogan's Farms Country Sausage was sold, newly founded Triple G Farms had 3,000 acres under management.
Today, the farm includes 3,000 acres of irrigated ground alone, watered by 18 circle pivots–plus 13,000 dryland acres. Seven additional pivots are planned over the next two years. "My goal is to have only 30% of our crop [left] with reasonable drought risk," he says.
Darren attended a single year of community college. "It wasn't for me," he says, "or, so I thought."
Darren would reconsider his education as he moved onto the board of directors for the Jackson Purchase ACA. A member of the Farm Credit System, Jackson Purchase has 2,000 members. With a merger pending, the ACA could soon manage a loan portfolio of $500 million.
Darren discovered a new need for higher education with his oversight responsibilities and working alongside financial and business professionals. He enrolled in Iowa's Ashford College as a long-distance student. After two years, he graduated at age 36, summa cum laude with a bachelor's degree in finance and accounting.
It was an accomplishment done with the steady support of a young family. Darren was married in 1993 to his high-school sweetheart, Misty. They are raising two children, Connor and Camryn. The family attends New Harmony Baptist Church, where Darren is a Sunday School teacher of young adults and serves other church needs.
Triple G Farms is an incubator for ideas that add income to the farm's bottom line. For example, it was an early adopter of variable-rate technology. In 1999, the farm mapped its first yields as part of a plan to vary nitrogen applications and corn seed populations. Today, Darren is working with DuPont Pioneer to understand the process for varying corn hybrids on the go. Pioneer can provide information about hybrids in varying environments. But today it is difficult–and somewhat inefficient–to respond in real time to those environments.
Changing hybrids on the go "will be the next thing that pushes yields higher," he says. Triple G Farms also is working on variable-rate seeding of soybeans.
Darren talks easily about management philosophies important to the success of the Triple G Farms partnership. One is to be on guard for the trap of comfort zones. Comfort kills innovation. Father, brother and Darren are always looking for the next technology and the newest idea.
But key to the farm, he says, is efficiency. Darren learned the basics of efficiency from the sausage business. "In businesses other than farming, your ability to hold on, to expand and to grow has everything to do with your efficiency," he says. "We are willing to be efficient."
For example, Darren does not view his inability to rent new ground as the negative outcome of competition from another farm. Rather, "it's not being efficient enough to rent that ground," he says.
What does that mean? "If it comes down to me or you, from my standpoint, it's got to be me," he says. "It's not mean. It's just business." The Grogan farm enterprise has grown 53 times its original size by that standard.
What does efficiency look like on the Grogan farm? Look at its labor resources. Triple G Farms operates with three family members and six full-time employees. The farm is highly competitive in its search for productive employees. "We pay a strong, competitive salary," Darren says, adding that each employee is competent in multiple areas of the farming operation. "We have far less than one employee per thousand acres," he says. "That's a benchmark we use, and we are proud of that."
But efficiency does not mean stretching resources, such as labor, to a breaking point. That condition can limit a business's ability to react to change or new opportunity. Darren says Triple G Farms' labor resource is structured with some reserve capacity. It's important, he says, to retain an ability to surge when the markets or season requires it. In other words, its reserve labor capacity allows Triple G Farms to discover value in timeliness–the farm can react to change and opportunity.
"We can take on a thousand or two thousand acres without adding labor or equipment," Darren says. "We have the capacity to be timely."
The farm discovered real dollar efficiencies in its investments in tiling capabilities. "Tile has been a key ingredient in our current success," Darren says. "Not only were we able to greatly increase yields on the wetter acres of the operation, but we also use it as a vehicle to acquire acres [for sale] at a much lower entry point due to drainage problems."
By tiling wet ground with a high-yield potential, the Grogans realize quick return on their land investments. The tile leads to higher yields, and higher yields increase the value of the land, in some instances by five to six times more than the purchase price.
It is also an efficient use of the farm's resources to open new businesses that build onto existing capabilities. For example, Triple G Farms owns a T-L Irrigation franchise with $2 million in annual sales. The Grogans sell irrigation equipment with success using knowledge learned on their own farm.
"Ninety percent of a sale is not buying the pivot," Darren says. "Rather, it's buying the insight and knowledge we have, how to water, when to water."
Most recently, Triple G Farms added well drilling to the irrigation business and renamed it AgWell LLC. "I expect to double gross sales [of the irrigation business] with this addition," Darren says. By the end of 2012, AgWell's drilling service was 60% booked through this spring.
Follow the farm's path to drilling wells. Triple G Farms invests in irrigation equipment to manage production risks. It uses that experience to sell irrigation systems. As the Grogan farm and irrigation customers have need for well-drilling services, Triple G Farms forms an entity to meet that need. It is demand for a service, built upon experience, built upon risk management.
Another example of this business model is the farm's aerial application business. The plane handles the spraying needs of the farm and now, a growing list of customers. Once again, the farm uses its own capabilities to respond to new opportunity.
"[We try] to look beyond to what it is and see it for what it can be," Darren says of the process that generates new business opportunities. "I have a personal philosophy that there is a better way of doing things. I just have not discovered it yet."