Podcast: Could hiring a custom harvester transform your farming operation?

00:00:00 Would custom harvesting be a better route for your farming operation? Could it free up capital and better yet, free up times 00:00:04 so you can focus on the farming. That's what we're discussing with Lee Luber and Chad Olson of Olson Custom Farms today on this episode 00:00:11 of Extreme Ag Cutting the Curve. Welcome to Extreme ags Cutting the Curve podcast, where real farmers share real insights 00:00:18 and real results to help you improve your farming operation. And now here's your host, Damien Mason. 00:00:26 Hey there. Welcome to another fantastic episode of Extreme Acts. Cutting the Curve. Got a good one for you today, 00:00:31 my friend Lee Lubert from Gregory South. Dakotas on here. And Lee told me about a year ago, he said, you know what we should do, we should get an episode on 00:00:36 with a guy that is my custom harvester. I said, yeah, I'd like to do that. 'cause we've never touched on that subject. 00:00:42 I personally believe that custom harvesting fits more farming operations than are actually using it because it would free up capital. 00:00:48 You would focus, you could focus on more on your production. There's a lot of reasons for this. 00:00:52 We're gonna dig into all of that. We've got Chad Olson with Olson Custom Farms. Chad is a farmer as well 00:00:58 as he runs this custom harvesting business. So anyway, these two guys met at Top. Producer, uh, Lee was the winner in 2014. 00:01:06 Mr. Olson was a previous winner. Mr. Olson, talk us a little bit about how you met Lee and then how this whole business arrangement came together. 00:01:13 Yeah, it kinda started out at Top Producer in, in Chicago. Uh, I won the top producer in 2006. 00:01:21 Met Lee in 2014, the year that he won, uh, top Producer. Uh, they always have a night out where 00:01:29 alumni all get together and go out for dinner the night before the, uh, the whole banquet and just talking with Lee and, uh, met him that night. 00:01:38 The next day he, he approached me and says, we need to talk about harvesting. And so I think we put some numbers together. 00:01:44 I think we talked back and forth. Probably went out to visit Lee and, um, yeah, struck a deal and, and been working 400 ever since. 00:01:55 Lee, you, uh, said you want to, and we'll get to the business side of it, but I wanna talk about how the thing even works. 00:02:01 Uh, you own one combine. Uh, I was at your farm in South Dakota. You've got massive amounts of acres. 00:02:06 You're still, what, 13, 14,000 acres you cover? And I'm like, well, there's no way you're covering this with one combine. 00:02:13 Well, we covered more than that. And, uh, for us it's just so much more effective. It, uh, keeps our efficiency up 00:02:20 and frees up a lot of working capital for us. And it's allowed us to grow, grow with time, and we have all these other projects going on. 00:02:29 It's been such a great fit for us. And sometimes people have the perception, like, only larger farmers are gonna hire a custom harvester. 00:02:37 Uh, we know how many guys in Chad screw and talk to 'em when they're working their way up to this, uh, area. 00:02:44 And they're cutting for guys that they cut one quarter, four or five quarters for, and, and it just goes from there. 00:02:51 They work for everybody, every size of operation custom harvesting works for and for us, it's just been a no no brainer 00:02:58 For the person that's, uh, from, uh, another part of the world. Uh, these people out in the, in the hinterlands, like, uh, 00:03:04 Lee talk about one quarter, five quarters, he's talking about a quarter section, 160 acres. But, uh, anyway, 00:03:10 there's people probably like, what the hell is he talking about? Cutting five quarters. Um, how's your business work, Chad? 00:03:15 Um, our combines lead Minnesota in early May. We started in Texas and we just, uh, keep working north. We cover 16, 17 states up to the Canadian border. 00:03:28 Uh, we used to go into Canada and, and cut up there until the covid year and Covid, uh, with the restrictions 00:03:35 of getting into Canada, we couldn't get in there. So the past four or five years we had not went into Canada. But, you know, as we started in, in Texas, 00:03:44 Oklahoma on weed harvest, um, we pulled, we've been going to the same towns for 30 years. 00:03:51 Started, you know, with just a few customers and kept going back to the same town and just kept growing in a in the same area. 00:04:00 Um, you know, when we started out, might have worked for two or three people in town as, uh, time has went on, you know, 00:04:08 you know, we might work for 10 different farms in that town. And, you know, they're from 00:04:13 all different, all different sizes. Um, you know, it really doesn't matter, you know, uh, for us being in, in that same town, we can work 00:04:22 for several people long as the the neighbors can, can get along and, you know, not have that thing that I gotta have mine done first. 00:04:29 That we can hop back and forth the, the different farms as the crop is ready. But, uh, you know, it, it's really worked out well for, 00:04:38 for my farm and our business. And I think as years have went on, you know, as equipment gets higher priced, you know, 00:04:46 and people can't find help. And, um, it's just been a, a good way for a farmer. 00:04:53 And it, it's been good for my farm to be diversified to have a, a custom operation business bringing income into the farm. 00:05:00 So it, it's kind of been, uh, it's really been good for me, but it's also been great for the farmer 00:05:07 once he takes a jump into hiring somebody to help him. You said you were, you've been doing it for 30 years, you're 56 years old. 00:05:13 So at age 26, you just decide to load up two combines and drive down to Texas. And then, uh, what'd you put a cardboard sign out 00:05:19 and say, we'll combine, we'll, we'll harvest for food. I mean, how does, how does one get hop into this? The, The first time, the first couple years I just went 00:05:27 to South Dakota on my own. In 1995, I, I saw an ad in a paper where a custom harvester was quitting, wanted 00:05:36 to sell his equipment, wanted to sell his run. I went to meet this guy in North Dakota. He gave me all of his contacts from Oklahoma 00:05:45 to North Dakota at that time. Um, and he told me at the end of the year, he gave me a, uh, a dollar figure what I had to pay him for every acre 00:05:54 that I cut just for his contacts. So that's kind of how I got my first contacts. But met with the guy at the end of the year, went 00:06:02 to North Dakota, went to Fargo to, to pay him. And he still had, uh, one machine that he hadn't had sold yet from his operation. 00:06:10 He said, you know, if you buy this machine from me, it was a 96 10 John Deere. And he said, if you buy this machine for me today, 00:06:16 I won't charge you for any of my contacts. I won't charge you for my business if I bought the combine. You know. So the next year we had 00:06:25 another combine on our fleet. Um, but yeah, it started with two combines in Oklahoma and, and you know, that's kind of how it established. 00:06:33 And we just kept going back to the, the same towns every year. It just grew from there. 00:06:39 So when I add the question, who hires you? Who hires you? It, it's as, as Lee said, there's this perception that 00:06:45 it's a certain, that it's only in the western plains and it's only great big farming operations. And that not, not necessarily true. 00:06:52 Hell, you're in Minnesota, you do you work for somebody down the road from you in Minnesota doing corn and soybeans? 00:06:58 Yeah, we do. I mean, we're covering 17 states and you know, we, we've got customers that we'll do 80 acres for all the way up to 30,000 acres. 00:07:09 You know, it, I'm not gonna tailor to any size farm. I mean, they all need help. They've all helped us. You know, my, my wife reminds me all the time. 00:07:20 She, she said, you know, you gotta take care of that small guy. That small guy helped you get going. 00:07:25 Yeah, some days it's tough when you're on a big job and to go back to a small job just to get him taken care of. But it takes all sizes of farms to make our business work. 00:07:37 Lee, you uh, and I always like to talk about business 'cause you always bring up, uh, always about the business side of agriculture. 00:07:42 And as I like to point out to our, our listeners, yeah, it's neat to talk about lifestyle. It's neat to talk about legacy. 00:07:47 It's neat to talk about generational stuff, but if you don't take care of the business, there's not gonna be any of that. 00:07:52 So you're the business, uh, you're the business minded guy. You've created a business model that where you 00:07:58 and Terry, your brother, can get across 17,000, whatever the number is now acres and do so with a limited number of employees. 00:08:07 I mean, you don't have a big city to pull from. You, you are in a remote area. And so this this thing, I assume, 00:08:15 just like when you went no-till, you said one of the reasons was the soil health. The other reason I went no-till was we can, 00:08:21 we don't have to cover as much ground. We don't have to put as many man hours in. We don't have to hire as much help. 00:08:26 So a lot of your thing is always about reducing the need for labor. This this has to be, we can talk about the money side, 00:08:33 but the labor part of it is probably one of the biggest reasons you became 10 years ago. Started hiring, uh, Chad. 00:08:40 Uh, yeah, the iron is the easy part. Uh, but that's the thing. We, with custom harvesting, we're able to define our cost, 00:08:50 uh, our cost per acre. We know what that is. It's built into our projections. We know what it's gonna cost. 00:08:56 And then Chad, he's actually assuming all the risk of all the combines, the heads, the trucks, the tractors, the grain carts, all the labor, the campers, 00:09:06 everybody shows up. The army shows up. Yeah. And if we didn't have that so-called army of people show up, we would need to buy, okay, let's go buy four more machines. 00:09:18 Uh, let's go buy five more trucks and then have all the people to do it. And then when we're not harvesting, then okay, 00:09:25 we gotta put 'em in trucks. We gotta do this, we gotta do that. Keep everybody busy. That's the thing. I mean, even in our operation, 00:09:32 harvesting is X amount of weeks. Yep. Where Chad is doing it for multiple months. It's over a six month period. 00:09:40 And that's the thing, you're getting the value of everything that he's doing, that he's putting together, that our motto 00:09:46 of people and machines and everything and the expertise. They're showing up. You're getting that, you're paying for 00:09:51 that piece of time by the acre. And for us, we just feel that's a good value and we view it as a working 00:09:58 partnership 'cause we're in it together. Yeah. And that's what makes it really work is having that mindset. 00:10:04 Yeah. The, this the person, there's, there's you, you have even said that more people should do this. There is a skeptic. 'cause there's always a skeptic. 00:10:12 There is a skeptic listening or watching this right now that says, yeah, that works out there for them. 00:10:17 But I'm at Ohio. Hell, nobody's gonna come in. There's no fleet of, there's no armada of combines rolling in here. 00:10:23 That's only gonna work in the plains states. That's, you know, a skeptic is saying that your response would be, Chad. 00:10:30 Well, I disagree with that. I I know harvesters in Ohio, I know harvesters out east. Uh, there's custom harvesters all over the country. 00:10:39 I don't care what state you live in, there's somebody doing custom harvesting the same way that I'm doing it. 00:10:45 So that's kind of a lame excuse. What about the, um, on the business side of it, Lee, again, you would have to have a bunch more employees 00:10:55 and then you're gonna have to have those employees, you know, okay, all winter long you can have 'em driving truck or whatever. 00:10:59 So honestly, it's the labor part of it is a big reason you did this for you. Like you said, you define the cost 00:11:05 and now you know that Chad charge you a certain amount per acre, whatever that charge is should be. 00:11:11 And it's, it makes your life easier, is the point that you're making? Uh, yeah. Uh, well, when the guys show up, it's great. 00:11:20 I mean, we get to know everybody in the crew. Uh, great group of guys. What really impresses us with, uh, working with Chad 00:11:28 and his people, they treat our crop like it's their crop. And that is so neat to see the guys 00:11:34 and the crew, uh, caring about the fields and, and the things that they notice out there. They're very conscientious. 00:11:42 Uh, I mean, that's something you don't actually expect that, uh, when you first enter into custom harvest thing. 00:11:49 But that's what we see with, with OCF, with Olson Custom Farms, that they actually care about the acres they're cutting 00:11:55 and the people they work with. And that's really nice. But when they're done and they leave all that stuff left. And all the thing is, 00:12:03 when you think about all those machines leaving and the people and all that, it's, uh, a whole lot of working capital went down the road. 00:12:10 That's Chad's working capital. Yeah. Right? And he's spreading that risk out over multiple months. Where if we try to do it in a more compressed timeframe, 00:12:18 we're tying up such a volume of working capital to achieve the same thing. And for us, we're all about working capital, uh, 00:12:27 being very lean and mean in our operation. Uh, not tying up a necessary working capital and growing our working capital. 00:12:35 And custom harvesting actually enables us to grow our working capital. Why don't more farms do this? 00:12:47 I think there's more all the time of starting to do it. 'cause uh, like when we started working with Chad, you know, basically 10 years ago, uh, the growth in his operation 00:12:58 and even operations that we know that we've referred to over to Chad, like, Hey, we're getting along great with Chad. 00:13:03 You know, we have guys call us up. Like, I'm kind of struggling trying to get this done or figuring that out. 00:13:09 We'll talk to Chad. And we're surprised how many people that we've had conversations with now are working with Chad and they're having the same experience that we do. 00:13:19 And everybody's growing. Okay, Chad is growing. We are growing. Mr. Olson, you're a farm as well as you run this business. 00:13:25 Why don't more farms do this? I think, not to downgrade anybody, but there's a lot of farms 00:13:34 that really don't put the two true cost of their own harvest bill into their operation. 00:13:41 I mean, they don't, I think some people are scared to put the true cost into their budget, what it's costing them to, to own the trucks, 00:13:51 to have the labor, to own the combines. By the way, if you're listening to this and you're not watching the video, Lee is over here nodding 00:13:57 his head like a bobblehead and agreeing with that. Uh, Lee and I did a recording and I encourage you to go and check out some of the stuff that we've done. 00:14:03 We talked about the true cost of stored grain because again, farmers are very, they love to produce stuff. Chad, they not necessarily like to sit at the desk 00:14:11 and get the calculator out. Um, you know, I made that point years ago, I asked o one of my, uh, farm buddies in Indiana. 00:14:18 I said, um, how the hell can you justify paying, uh, feeding $7 corn to a dollar, uh, to dollar and a nickel, uh, feeder steers? 00:14:28 He said, I'm not feeding $7 corn. I said, you're not. He says, no, I grow it myself. Meaning, well, if you can sell it, 00:14:35 if you can sell at the elevator for $7, at $7 corn, no matter what you do it for. But there's that thing, like you said, well, 00:14:41 I couldn't pay Chad because he's gonna charge me all this cost to come in here. And, and, you know, uh, I I, my combine's, uh, 00:14:48 only worth this much. I'm like, okay, what's your time worth? What about the trucking? What about the insurances? 00:14:54 What about, I mean, you can go through all those kinds of things. So you think the reason that more farms don't do it is 00:14:58 because they haven't actually put the pencil to it? I was gonna say, do you think there's also a thing of this is what we've always done. 00:15:03 We, we've, we've always, we've always done this. Totally Agree. They have to take the 00:15:07 emotion out of it. You know, I I tell people, if I wasn't in the business of harvesting, I would hire my own farm I'd, 00:15:14 I'd hire another harvester to harvest my farm if I wasn't in the business myself. Right. So, you know, I think some, some farmers just love 00:15:23 to jump in that combine and get to go across the land and, and, um, you know, it's a pride thing. 00:15:31 Yep. It's not a very smart business decision. I love you. You know, I started this business only 00:15:37 because I like to drive big equipment. Well, as it grew, it had to be a business. It had to be, you know, things change over 30 years. 00:15:47 Right Now it's you, uh, you know, I got 150 people on my crew that are relying on me. I got customers in 17 states relying on me. 00:15:59 Now it's, we better be a profitable business so we can make all these families whole or profitable people that are relying on us. 00:16:08 So my days of driving a combine, I, I got to drive a combine two days this year. I mean, love it. 00:16:15 I drive a truck every day in the fall and still can do business. But it's, it's not all about just getting 00:16:21 to jump in your combine and enjoy the fall to see what you grew. It's as farms grow 00:16:27 and as times change, as as tight as everything is right now in ag, you better know the bottom line in your business. And 00:16:38 I Get back sitting in that combine all day. Got it. I want to ask some more questions about the business side of it. 00:16:43 Before I do that, I want to, uh, remind our listeners and viewers that Nature's is one of our business partners here at Extreme Ag 00:16:48 and, uh, in fact, they're sponsoring our new show, uh, which is coming out. And also they've got a promotion going on. 00:16:53 Nature's will pay your admittance into Commodity Classic. You and a guest will go to Commodity Classic 00:16:58 for free if you're an extreme Ag member. So just think about that. It's seven $50 to be an Extreme Ag member. 00:17:03 Well, you're gonna get a bunch of that money back for free admission into and registration for Commodity Classic for you 00:17:09 and a guest you got signed up by January 11th. You can do that@theextremeag.farm website. Nature's, if you're not familiar, 00:17:15 is focused on providing sustainable farming solutions and helping farmers like you maintain crop crops potential for today and for future generations 00:17:23 with high quality liquid fertilizers powered by Nature's Bio. Okay. You can target specific periods 00:17:28 of influence throughout the growing season. Very important in a season like this with low commodity prices. 00:17:32 Why fling a bunch of fertilizer out there that's not doing any good? Put it where it needs to be, 00:17:36 exactly when it needs to be there. You can do that with products from Nature's. Go to natures.com to check it out 00:17:40 and figure out how you can enhance your crop yield and boost your farm's. ROI, speaking of ROI 00:17:45 and money, how do you charge somebody that's listening to this is like, Hey, you know what, uh, Lee's a smart dude, I really probably should consider this. 00:17:52 There's gotta be an acre charge, but then there's an acre that only gets 35 bushel of wheat and there's an acre of Lee 00:17:59 that gets a hundred bushel of wheat. Well, you're doing a lot more work on one acre than you are on the other. 00:18:03 So I'm assuming if I'm just gonna guess here, you charge by an acre and then you also charge by a volume 00:18:09 because you're moving the product as well. Charge by an acre charge so much for trucking. Uh, in a lot of the southern wheat states, uh, 00:18:19 we have a three number, so much an acre, so much for trucking and so much for every bushel over a 20 bushel yield. 00:18:27 So, you know, it, uh, it, it's all price. There's basically a flat fee for what that combine's gonna get. 00:18:35 And then basically the, you know, the more bushels lead raises more, it's gonna cost him for us to truck it. 00:18:44 So that's kind of fair both ways. That's kind of how the, the rates are figured. And then on the trucking, it's, it's per, I mean, 00:18:53 per bush, but also it's per mile. I mean, sometimes you're running it back to the guy's farming operation. 00:18:58 Sometimes you're running it 37 miles down the road. I assume It's, you know, it's so much per bushel per mile. 00:19:04 I, I've got a chart done, you know, it's so much for the first 10 miles so much for, you know, the next 10. And on down the line 00:19:11 You pull into Lee Lubers, you, and you're covering a whole bunch of acres. So you said you gotta take care of the small guy. 00:19:17 So if I've got 80 acres and he's got 17,000, um, you're, you're, I assume you're gonna charge me a little bit more 00:19:24 for pulling into my place on a per acre basis? Not necessarily. I mean, I'm not gonna, I'm not gonna haul a combine 200 miles to 80 acres. 00:19:34 Right. I mean, the neighbor that's got 80 acres and when we're going by it, we'll pick it up, you know. Okay. We gotta let you know, for instance, Lee know if, 00:19:44 if he's gonna let us stop by and pick it up. You know, it's like most people work with us very well. You know, it's, you know, it might take us a, a couple hours 00:19:53 to pull off his farm and make another neighbor happy. But I mean, everybody's gotta work together to make this deal work. 00:19:59 Yeah. Yeah. So, so, so the guy that's down the road that's got a small chunk, uh, he is like, Hey, we're gonna run over and knock this off. 00:20:05 And that's just the way it goes. What about on the employees? You said you've got a crew of 150, is that what you said? 00:20:12 Yeah. Give or take. Yep. That's, That's a little bit to manage. I've got a lot of good people. 00:20:19 Um, I'm not saying I do this on my own. Uh, we have probably 40 time full-time employees, uh, that are here maybe 50 year round. 00:20:31 Uh, the rest are H twos, uh, that're here on H two a. Visas come from South Africa. Um, you know, we run 13, 00:20:41 14 crews out on the road harvesting. You know, those leaders are going to take care of their crew. 00:20:48 Um, so I'm not dealing with 150 people every day. And just in the past couple years, um, you know, these 13, 14 crews that are out there, I have two other guys 00:21:01 that have been with me a lot of years that kind of oversee these 14. And then, you know, it's kinda like a pyramid thing. 00:21:08 And I talk to those two guys every day. That's kind of what our plan was. But, you know, I'm, I'm still checking in 00:21:15 with every crew every day. Not to be, but just to see how it's going. And, you know, if there's a problem with a customer 00:21:20 or problem with some machines, you know, I can help smooth it over. So I still have my fingertips on everybody, 00:21:27 but just kinda have a pyramid of, of a group of guys that have to figure it out day to day. Do you the 50 full-time employees, uh, 00:21:38 and then the others that come from South Africa, is that predominantly where you're, your seasonal help comes from? 00:21:44 Yes. They all come from South Africa. Okay. So they're South Africa. Uh, and they're credentialed. 00:21:50 Uh, they're like, you, you, you're just getting somebody that was flipping burgers and saying, oh, by the way, 00:21:54 now you're gonna run this, uh, you know, million dollar machine. Yep. Uh, when I started getting South Africans 25 00:22:01 some years ago, I'd spend half the winter looking at their resume, talking to 'em on the phone. 00:22:07 But when they would get here, they were so full of BS that it's like I wasted my whole winter. Mm-hmm. Right now it's all, uh, you know, 00:22:16 referrals from guys that have been here before. Uh, but if you go back to, uh, looking at the guys that have been here, the guys that were flipping burgers 00:22:25 or the guys that are from the city, they've worked out better for us than the guys that probably grew up on a farm. 00:22:31 They will come, we can train 'em our way. It's like hiring you or Lee to come and work on my farm or harvest. 00:22:38 It'd be a disaster. You guys have been doing it your way since you've started, and now I want you to do it my way. 00:22:45 It doesn't work. Mm-hmm. You hear what he just said, Lee? He won't, he wouldn't hire you. 00:22:52 I don't blame you. I mean, I, I think, I think, I mean, I think the guy's getting down right. Insulting, uh, he hire you. 00:23:00 Um, alright, so about the work, I, when I was a kid, I read a big article. I was 17 about the custom harvest thing. 00:23:08 And I'm growing up on the dairy farm in Indiana. And, you know, we filled silo and we milk cows and we pushed manure and I thought, this would be amazing. 00:23:16 I wanna do this. And I never did. So I've kind of actually always had this unfulfilled thing that I want because I never saw 00:23:22 anywhere, you know, I never went anywhere. Went on FFA trip to Oklahoma. It's the first time I'd been, you know, 00:23:28 very much west of the Mississippi. I wanted to do that, but I don't think I could do it now at age 55. 00:23:34 It's like 120 hour weeks, isn't it? You know, there's, there's a lot of hours. I mean, when the weather's fit, it's seven days a week 00:23:44 and you know, it's a rainy day. You get a little break. But, uh, you know, I can take a, a kid that comes from my hometown that's 17 or 18, 00:23:55 or actually when we started, when my wife and I started going on the road, we had all high school kids working for us. 00:24:00 You know, now it's, it's an 18-year-old kid that's in college, or most of 'em are coming from South Africa. 00:24:06 I can take an 18-year-old kid that's a boy when he gets here, maybe just a little punk. But by the end of the year, he turned into a man. 00:24:15 'cause he's, he had to work his tail off. And it, it really changes a young man. So your, your guys that are full-time, 00:24:27 what are they doing now? It's, we're recording this, uh, just before Thanksgiving. What are they doing? I mean, harvest is even in Minnesota, 00:24:35 I mean, you still have machine running. Is there still some, some late crops that are we Wrapped up? Uh, 00:24:40 Sunday night. Okay. Uh, it's coming back in the yard. Equipment's getting cleaned up. Equipment's getting lined up. 00:24:46 Uh, shop is getting tidied up again. Uh, in a week or so, we will have a big party for the whole crew and customers and neighborhood unwind a little bit. 00:24:59 And the day after that party, the, the shop gets filled back up with trucks, headers, combines, uh, what we have to get ready for next year. 00:25:09 So basically there's a couple weeks of downtime and everybody's back in the shop, uh, working on equipment to get ready to go for the next year. 00:25:17 Along with haul grain for our own farm. Uh, picking new equipment up out of the factory that comes back to get set up. 00:25:24 So, uh, you know, that's, that's one big question I give. What do you guys do all winter? Well, 00:25:29 No, I I another point, My winter is more stressful than when the combines leave. It's like getting all the contacts, getting all the, the, 00:25:40 the jobs lined up, make sure we're going back to the same area, getting this equipment ready. So there's, there's no really downtime. 00:25:46 I mean, it's not the a hundred hour weeks. I mean, it's five days a week, but everybody's here, you know, every day 00:25:53 of the week getting ready to go for another year. Lee, you ran the numbers, I'm sure. And so when you and Chad met, you said, you know, 00:26:00 let's talk about you coming and doing my harvesting. You ran the numbers and so you knew what it costs you to have four machines, whatever it is, 00:26:09 you know, all this and that. And are you gonna make the case that it's actually cheaper or is it just easier? 00:26:17 Uh, both actually for us, uh, we, we see it as a value multiple ways. And, uh, and even like when Chad 00:26:26 and I, when we settle up, uh, you would think that, uh, you know, we'd be going back and forth and trying to hammer it out. 00:26:34 Actually, it's like Chad, it's with Chad and I, it's about a 32nd conversation and we agree that it's gotta work for both of us. 00:26:41 And it's very, it's a very easy decision even when you settle up after the harvest. Uh, it's, uh, yeah, it just works really well for us. 00:26:51 And, uh, yeah, we know our numbers and that's where a lot of guys, they need to look at their numbers. 00:26:58 If they look at what their true cost of harvest is, yeah. It, it would, it might persuade them 00:27:04 or even scare them to a certain degree depending on the operation. Uh, going to the people component. 00:27:10 I wanted to point out, like, uh, Chad said about boys becoming men, uh, like, uh, on Chad's crew, uh, aj we've known him from Minnesota. 00:27:21 He never even grew up in a farm. He grew up in the edge of Minneapolis and he oversees multiple crews. 00:27:26 And he has a passion for agriculture that most farmers couldn't even equal. Yeah. And that's because of the culture at OCF. 00:27:34 And, uh, ger, uh, one of his, of multiple foreman, uh, he's been on our place multiple times. He was here this fall and dirt, 00:27:43 and I laugh about it every year, about the first day he was here eight years ago and he was learning how to run a combine. 00:27:53 He never grew up in a farm in South Africa. And I hopped in with him and we were in tough conditions and down wheat and mud. 00:27:59 And he and I spent about three hours that afternoon. I was trying to get him, uh, up to speed on some things. Uh, 'cause it, it was really tough conditions. 00:28:10 And now he combines thousands of acres from Texas to the Canadian border up into Montana, treats every acre as as if it was his own. 00:28:21 And he is one of the nicest guys in the world. And that's during an eight year period, we've watched how he's really grown into himself. 00:28:27 Uh, it, it's neat to see when you see guys in the crew coming back multiple years. 00:28:32 Yeah. Right. And how they really get into it and they have the passion for it. And, and harvesting is just like farming. 00:28:39 It takes a passion for it. You've got to want to be there. And Chad has a lot of people, they want to be there. 00:28:46 Mr. Olson, uh, the other skeptic or the questioning, uh, viewer, listener is gonna say, yeah, but you know what? 00:28:52 That guy's sitting behind the wheel. By the time he's, uh, on his 90th hour, he doesn't give a damn whether three bushels are getting 00:29:00 blown out the back of the machine. 'cause it's not set up right because there's something wrong because it ain't his crop. 00:29:05 I mean, you could see a person, again, clinging to their own, of course. I would say, wait a minute, these are the professionals. 00:29:13 Hell, they're gonna know how to set up a combine better than me that only farms 800 acres. 00:29:18 So kind of address that. Well, I think it's instilled into these boys when they get here in the spring of the year. 00:29:25 Um, a lot of these guys are working on our farm too. You know, they're helping with planting on our farm. And it's like, I still unto them that, that people hire us 00:29:34 because we're farmers. We know what it takes to make a living farming. We have to treat everybody else's farm from 00:29:42 one end of the country to the other. Like it was our own. I said, if we're going to push grain out the back of 00:29:47 that combine, they may not be in business next year. 'cause it takes every bushel to make it work. And we have to get every bushel to have a job the next year. 00:29:57 So, I mean, you could find some fly by night guy that's just coming through town wants to pick up some dollars and move on. 00:30:03 But I mean, our core business is we wanna build relationships with everybody we work for and we want to come back next year. Yep. 00:30:10 So It's, Uh, you do the sale. Are you the sales person? Are you the person that gets on the horn now from 00:30:15 that day when the guy in Fargo, uh, turned over his clients to you? Are you the, are you the person that makes the call 00:30:22 and says, Hey Roy, um, assume we're gonna be doing your acres again in, in Oklahoma. 00:30:28 Are you the person that's on the horn doing that? I am a a lot. I try to get to see everybody every year. It doesn't always happen. 00:30:37 But with my crew leaders that have been with me for so many years, I've got guys that are, that have been here from five to 22 years that have, 00:30:46 that have worked for me on harvest. Um, and I think it's almost a little pride and joy for them to go visit their customers. 00:30:54 Um, you know, most of these people become like family, but, uh, like the guy that ger, the guy that works for, uh, Lee, he's down in Oklahoma seeing some customers just 00:31:05 unwinding a little bit, went back to some of the customers in Oklahoma and, and they're having a good time down there talking about next 00:31:11 year and just unwinding. You know, it's when, uh, when Lee's crop, when they finished Lee's crop, you know, they, uh, the day 00:31:20 before they came home, Lee had a barbecue for him, or Lee and Terry had a barbecue for 'em. 00:31:24 And I mean, that's all they talked about. They didn't talk about Harvest when they came back here. They talked about the little party 00:31:28 they had before they go home. And it's like all these people become family. So it's like my crew leaders want to go back 00:31:35 and call family. Let's go back and see some family and talk about next year. So, you know, sometimes I I I struggle 00:31:43 with not seeing everybody and being at the fingertips of, of every job. But I think that's lot of pride of, of the guys that, 00:31:51 uh, I get to work with every Day. You put a picture on Facebook of the party post-harvest party, 00:31:56 and it made again, it made me want to go and, you know, a 17-year-old kid, I wanted to do this. And then I find out that the only custom harvester I, 00:32:03 now I know Mr. Olson said unequivocally he wouldn't hire me. That's what I heard. I, he said, I would not hire you 00:32:13 because you suck Damien. That's what I heard him say. And then, and he took a swing at me. Figuratively. Uh, all right, while, while we're on here, is it, 00:32:23 could you expand and have even more, but then employees are the problem. Do you have a hard time getting people to work? 00:32:30 I got the H two A thing and, um, bringing in, you know, because that's seasonal, it fits the exact definition of H two A. 00:32:36 They can be for I think up to 10 months and, and all this kind of thing, and they can come back. That probably works out very well for you. 00:32:42 But could you do more? And employee recruitment is a problem. I don't think employee recruitment is a problem. 00:32:51 I, I know most people, uh, when you talk business, their biggest problem is their employees. I, I don't ever chime in on that. I've got great employees. 00:33:03 We've got a lot of people that want to come to work for us. Um, so employees aren't my problem. 00:33:09 If we wanted to grow, I think we could grow. But I think we're in a situation, I'm not gonna say we're never gonna grow, 00:33:16 but with the core group of people that we've got and that keep coming back and stayed year after year, um, I think we're doing quality work. 00:33:26 And sometimes you get to a point where, you know, quality over quantity. So with our custom harvesting business, I think that's 00:33:35 where we're at today. I think that this Lee is going to expand my prediction. I've been saying this to my ag audiences. 00:33:43 I said, you know, and when interest rates were two or 3%, you can let some stuff blow in the wind a little bit. You're talking six to 8% money right now. 00:33:52 That's like a doubling or tripling of the cost of money. Um, and so given that many farms operate on operating loans 00:34:01 and then not to mention your land, et cetera, et cetera, to have a million dollar machine or, and, 00:34:08 and you guys are the experts on this, but I'll just say a million dollars for the biggest combine and two heads. 00:34:12 I don't know if that's the right number or not, but am I close? Am I close on that, Chad? You're close. Okay. 00:34:17 It, it have one of those tied up, one of those sitting in my shed. And I use it for, uh, 10 days. 00:34:24 It just seems like a real, and I say this to, and then farmers say, yeah, but if I don't have that machine when 00:34:29 I need it, then I lose my harvest. And I said, well, you know, Uber, it's a crazy comparison by the, its similar comparison. 00:34:37 When I need a ride to get from the airport to the hotel to do a speaking engagement, I need that ride when I need that ride. 00:34:44 Because if I don't get on stage, I miss out on my income and this phone right here, I have an app 00:34:49 and I can get a ride within about eight minutes to haul me there. So why can't it work that way? 00:34:55 In other words, why can't it be to where most farms decide to not do their own harvesting? 00:35:01 And they, it's a, the uber concept and custom harvesting are really kind of a similar concept. Am I right? 00:35:09 Yeah. I, I think they are. Even with the custom harvesting. And another part of our business is, uh, we rent combines 00:35:15 to farmers combines or, you know, farmers that don't wanna own their machine, but, you know, have the labor, have the trucks, but 00:35:23 but don't want to have that piece of equipment sitting in the shed for 11 months out of the year. 00:35:27 We also, you know, all combines all over the country and, and, uh, you know, 00:35:34 our machines will see four different farmers. So there is another option where they can rent a machine but don't have to own it. 00:35:41 You know, that has grown over the years. Also, Do you have you have any, Or they get a 1-year-old come combine every year 00:35:49 to keep up with the technology? You know, don't they know it's just like harvesting. They know their exact costs. 00:35:55 'cause I take care of the repairs unless it's negligence. So that's just another part of our business. Also. 00:36:00 How the hell do you farm and do this business? You got a lot going on. Good people. It just takes a lot of good people. 00:36:10 Are you a farm or, or which one? Are you better at farming or running a custom harvest business? 00:36:16 I don't know if I wanna decide which one I'm better at. I want to keep getting better at both of them every day. So, um, I think it's putting, it's delegating, 00:36:24 putting people in the right place, uh, where you need to be. I mean, it's, you can't do it all alone If you want to grow, 00:36:32 Lee, you guys do this because of a lot of reasons. It makes sense, et cetera, et cetera. You think it's, it's not inconvenience. 00:36:38 You think it's actually more economical for you to do it this way. Is there any other aspect of your business 00:36:44 that you're going to farm out? Uh, the harvesting, it'll stay the way it is because that's a great fit for us. 00:36:53 Uh, about About off season trucking. Off season trucking, do you hire a lot of that done because, Uh, yes, we have to, uh, we've actually had Chad, uh, 00:37:02 come in and help us, uh, with seeding some soybeans. And, uh, when he gets done in Minnesota, because we're looking at a, you know, window, 00:37:10 usually he can get going earlier than us. So if he comes in and runs with us, great. Uh, yeah, we're looking at just trying to maximize 00:37:19 what we do, you know, all the time we we're, we don't, we're not gonna rule anything out. If it's an opportunity, 00:37:26 Mr. Olson, you're going to be, and you're, again, we're all the same age roughly here. So you've lived through a couple of up and down ag cycles. 00:37:34 We're in a down, uh, ag cycle, downward ag commodity prices. Two things will happen. First off, do you, do you ever have 00:37:43 that uncomfortable time where you don't get paid and it's somebody you've been working with for 10 years because of this kind of a downturn? 00:37:51 Uh, I haven't had a problem customer for 10 plus years. Um, I think the people that we work for right now, uh, are always upfront with us. 00:38:04 I mean, we might have to wait 30 days, you know, if some people have to move some grain or wait for, uh, some contracted grain to get out of a bend. 00:38:13 Um, the ones that I, I get a little concerned about is, you know, the extra jobs that we may pick up at the end of, uh, somebody else. 00:38:22 It's somebody that picks us up right at the end of the year. Mm-hmm. You know, little nervous. 00:38:26 But, um, you know, I'm gonna give everybody the benefit of the doubt. Okay? So if you, you don't have, you've, you've been 00:38:33 around long enough, you're doing the problems you might have are the person that's scrambling in November and 00:38:38 because they've, they're scrambling for a reason because they're underwater Sometimes. 00:38:43 Not all the time, but I'm gonna give, I'm gonna give everybody the benefit of the doubt. I mean, everybody's had tough times. 00:38:48 If they're, they're up front with me, I'm gonna work with them. You said a bunch of machines come back a 00:38:55 after going over as many acres, you don't get new combines every single year. You do, don't you? 00:39:00 Half of 'em. Okay. So with our rental business, uh, John Deere won't let us rent out a brand new combine conflict of interest with them. 00:39:10 So half of 'em are new. We run the new ones. The 1-year-old ones come back, uh, go through our shop, and those are the ones that go out on our rental fleet. 00:39:21 The person's listen to this is saying, okay, uh, because how many, how many harvesting machines, how many combines do you, do you run 00:39:29 90? That's, that's a few dollars tied up. And then how many semis? 75, 80. 00:39:40 Yeah. And that's, that's, that's haul, that's flatbeds to haul the machinery and also then graining trucks. Correct. We're, we're hauling the majority 00:39:51 of the grain off of our combine. So it's, it's moving the machinery and moving the grain off the, off 00:39:57 The grain carts. You do the, you have to haul grain carts to all these places as well. Grain buggies, whatever people call 'em. 00:40:02 We do. Yeah. Yeah. You, you got an of those also. Majority of the time we, we truck those, yes. Those are ours. Every once in a great while when we get 00:40:11 behind and, you know, if we get laid out on a job finishing late and the next job's early, there's times that those tractors 00:40:19 get on the road and might have to drive a couple hundred miles. But it happens 00:40:26 When, uh, yeah. So you're hauling grain cart also. So you got 90 grain carts. One for every combine On wheat harvest, uh, takes one cart per three combines. 00:40:36 Okay. You know, with soybeans, um, corn harvest, you could run three combines with two carts. Okay. Most of the time. 00:40:45 Okay. Uh, what have we not covered here, Lee? Because you want to get Chad on here, and this is a little bit of a longer episode than usual, 00:40:52 but I like it because of the very diff divergent topic. I see this being more of the future. So with the ag economy, 00:40:59 and usually a downward ag economy creates consolidation. There's usually a 75-year-old that says, 00:41:05 I guess I should have retired three years ago. Like, yeah, we told you that. So then there's, then there's the, uh, 00:41:11 the consolidation effect. I would think that the consolidation effect would mean there's fewer customers for a guy like Chad, 00:41:19 but more opportunity because if you're consolidating and very business minded, you're gonna do the same thing that Lee Luber does and look at the numbers 00:41:27 and say, I think it just makes sense to hire this done. Am I right or do you, am I wrong about that? Well, we've noticed, and 00:41:35 and Chad can, uh, definitely, uh, uh, attest to this that we've seen a consolidation in, in the custom harvesters, uh, with retirement and whatnot. 00:41:45 There's less custom harvesters out there, and yet the mindset has gotten more business minded in multiple operations 00:41:53 where they're seeing custom harvesting works for them. And we have several friends that did not use custom harvesting 10 years ago. 00:42:00 Now they do. Yeah. That I think there, there's, uh, there's more a there's getting to be more acres, but there's a consolidation out there. 00:42:08 That's why Chad, uh, focuses on his, uh, you know, dedicated customers every year. And if he picks up a little bit extra, great, 00:42:17 but he takes care of his people. Mm-hmm. You know, and that's the thing. I mean, uh, when they're, 00:42:22 they might be plowing mud in Oklahoma and they could be going into Kansas and Colorado and, you know, we're talking to the guys 00:42:30 how things are going, but they'll make it here on time. 'cause everything is structured and scheduled. You know, that's where people think, 00:42:37 well, gee, they're down there. They're not gonna make it in time. We're, you know, but they always do. 00:42:42 They always show up in time. They, it's the voodoo that they do and all their scheduling and their jobs and the areas they work in, 00:42:49 they show up on time when we're needed. And that's very important. And yes, they might be packing up two hours starting 00:42:58 to clean up and pack up two hours after we're done and, and headed on to the next place. But it's all to make it work for the next guy. 00:43:05 Yeah. That's gonna be the other argument is, well, yeah, they don't get here and then I lose, I lose 8% 00:43:10 of my potential yield because the field needed harvested, uh, 10 days ago and they were late. 00:43:15 I'm sure you've heard that as the argument against hiring somebody like you, right, Jen? Oh, definitely. I've, I've heard that. 00:43:21 Uh, I think it happens. Uh, I think we're fortunate enough to have enough machines and enough crews where if the crew that was supposed to come 00:43:30 to lead, uh, is hung up somewhere, we've got other crews that are capable and have been on his farm 00:43:37 that maybe finished up a job at a different place that can get there. So I think that's what's fortunate about us, 00:43:43 is just having multiple crews that we're not gonna leave anybody hanging, we're not gonna be coming in late long 00:43:50 as the customer is working with us. I mean, it would really be tough if, if Lee tells me I have to be there on the 1st of July 00:43:57 and we don't start till the 15th of July. So it's, it's all about the relationship with a customer that be honest with us when you think it's gonna start, 00:44:06 don't get us there 10 days ahead of time and make us bust our ass to get there, you know, doing stuff unsafe 00:44:14 or whatever to get there when you tell me it's ready and it's actually not. So it's, that's how you kind of pick 00:44:21 and choose who you work with also. Got it. So you're gonna cover more acres potentially with fewer customers through consolidation. 00:44:28 Was one of my original questions. Am I, is that an accurate prediction? Definitely. Yeah. Yeah. 00:44:34 Sometimes like the way the ag market is right now or the ag economy, you know, uh, I think it's, if you're in the right spot financially right now, I think 00:44:45 this is a great time for more opportunities. You know, people retiring or, uh, or it's not working financially, you know, the guys 00:44:52 that are in better shape, this is kind of an opportunity type I think for a farmer. I agree. I agree. 00:45:00 I always ask money questions, but I'm afraid to do that with you because I'm afraid there's too many variables 00:45:05 because nobody likes me. You ask a money question, say, well, it depends, but the really reality is how far to the elevator, 00:45:12 how far are we trucking it? What is the yield? What is the crop? I mean, there's a lot of stuff here. 00:45:17 So if I was to ask you a question of what's the average price per acre you're gonna say of which thing and where is it? 00:45:24 And so, I mean, am I right in, in saying we sh it's, Yeah, I think we need to leave that out of it. Um, you know, if, if somebody calls me 00:45:33 and their first question is what do you charge? Yeah. Um, they're being nosy. They're, they have no interest in hiring me. 00:45:41 They probably want to know what their neighbor's paying or Yeah. They went order for their neighbor. 00:45:48 I mean, to have a conversation about me coming to cut your farm. There's a, there's a lot of variables. 00:45:54 We, I mean, it's gotta work for both of us. We, we have to look at it how everybody approaches it different, so Yeah. 00:46:01 Yeah. It's not you, you'd agree with that, Mr. Mr. Luber. I assume that that's the same thing when you first engaged 00:46:06 their services 10 years ago, uh, your first question was how much it was. Uh, I know what I'm paying. 00:46:12 No, no. We, we never had that conversation because if you start out that way, you're not seeing the actual value 00:46:17 of custom har custom harvesting. Yeah. Uh, if, if that's like Chad said, then you're just fishing, you're snooping. 00:46:24 Uh, that's one thing. We know how many other jobs that, that Chad cuts, uh, we never ask them what, what they pay. 00:46:34 They never ask us. Yeah. It's just, that's just good business. Uh, yeah. That, that's the way it works. 00:46:40 Uh, two years ago when, uh, AJ got done cutting wheat, he had about a two day window before he had to leave for North Dakota, 00:46:49 a neighbor just to the west. He was way behind him and his son and AJ said, well, as soon as I get done with Terry 00:46:55 and Lee, I'll come help you. And he went and he cut for him and saved the day before the next rain came and it could have lost the crop. 00:47:03 Guess what? Pat didn't ask what, uh, Chad charges us. I just said, you need to talk to aj, he'll take care of you. He'll treat your crop as if it was his own he'll. 00:47:13 He'll do a good job for you. I vouched for him. And I never asked Pat what, what he had to pay Chad either. Sure. That was not part of the equation. So, 00:47:22 Well, the main thing that we, we, we both of you started with is, and that was Chad's, one of his main points. 00:47:29 A lot of these farmers really don't calculate the real cost that they incur the machinery, that the, the payment, 00:47:35 the in the interest, the storage, the maintenance, the trucking, the manpower, the fuel. I mean, you can go, there's a lot of stuff that, 00:47:42 that I'm guessing a lot of folks gloss over when they don't, when they wanna do and a comparison. 00:47:47 So I'm, I think that you guys both led off with that, so mm-hmm. Chad, Chad, I both love, we both love what we do 00:47:53 in our profession, but it's a numbers game. We're driven by the numbers. The numbers gotta make sense. Lee Luber, top producer 20 14, 1 of the founders 00:48:03 of Extreme Ag, Chad Olson, a Minnesota guy that's a custom farmer, has a lot going on, also farms, uh, a custom harvester. 00:48:10 I'm sorry. If somebody wants to find you, how do they do? So, 00:48:14 Uh, you can go to olson custom farms.com. That's Olson with an EN, not an ON, correct. With an EN. That's right. Olson Custom Farms Arms. 00:48:26 It's been a great episode. I know it's a little bit long, but you know what? I love the topic. Thank you for being here. Again. 00:48:30 You can find all kinds of great information. Lee and I have some really good episodes. Go and check it out. Extreme Ag Farm, it's a library, 00:48:36 hundreds and hundreds of episodes of cutting the curve and also hundreds of videos. These guys are shot on their farm. Go check it out. 00:48:42 It's all free. If you want to take your learning to the next level, become an Extreme Ag member for $750 a year. 00:48:47 And if you do that by January 11th, 2025, you'll get the offer to go to Commodity Classic for free courtesy of our friends at Nature's. 00:48:54 Thanks so much for being here. I gotta tell you, this is one of my favorite episodes. I love this 'cause when I was 17 years old, I wanted 00:48:59 to be a harvester, and then I found out the only guy I know that does this won't hire me. So, you know what? 00:49:06 Make, we'll make an exception, will try you out for a week when you want to go for a road trip, And probably a week would be enough for me at my age. 00:49:14 All right. Till next time. Thanks for being here. I'm Davey Mason. This is extreme max. Cutting the Curve. That's 00:49:18 A wrap for this episode of Cutting the Curve. Make sure to check out Extreme ag.farm for more great content to help you squeeze more profit out 1179 00:49:26.755 --> 00:49:28.075