Ep #08: Boosting Soil Health and Farm Profitability with Paul Butler
What if you could boost your farm’s revenue and improve soil health—without taking on excessive financial risk? In today’s episode, we sit down with seasoned farmer Paul Butler to explore innovative strategies for increasing farm profitability while prioritizing sustainability. Paul shares his insights on conservation programs like the Conservation Stewardship Program (CSP), as well as the economic benefits of no-till farming and cover cropping. He also reveals how maintaining strong relationships with landlords has allowed him to implement sustainable practices that would otherwise be financially challenging.
Listen in as Paul takes us through the intricacies of no-till farming, highlighting both its advantages and the hurdles it presents. He also talks about his journey of adapting cover crops and offers practical insights on striking a balance between soil conservation and farm profitability. Whether you're a farmer or investor, this episode is packed with valuable tips for optimizing land management strategies and leveraging government incentives to enhance both soil quality and financial returns.
Listen to the Full Episode:
What You’ll Hear About in This Episode:
How farmers can leverage CSP incentives.
No-till farming benefits and challenges.
Cover cropping strategies.
The benefits of having strong relationships with landlords.
Insights on balancing sustainability with financial returns in farming.
Ideas Worth Sharing:
“Any market projections made today, you're likely to look really foolish tomorrow or at least maybe a week or two out. But I've learned just to average, not try to hit the home runs.” - Paul Butler
“The niche I've tried to cultivate is really good relationships with my landlords. I've never lost a farm in 23 years.” - Paul Butler
“ Get paired up with a neighbor or somebody close by that you trust, you can work with, that's gonna help you.” - Paul Butler
Resources:
Paul Butler: LinkedIn
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Read the Transcript:
Paul Butler: This is kind of a joke I tell, but I actually kind of think it's a little truth in it is that farming in a 10-year cycle, you're going to make a lot of money two years. You're going to lose some money, one or two years, probably a lot, one, and you're going to kind of float along the other six years,hope that's one of the two good ones.
Welcome to The Land Ledger podcast, where investing in farmland meets the future of finance. I’m your host, Brian Kearney, here to guide you through the untapped potential of farmland as an asset.
Whether you’re already investing in farmland, want to invest in farmland, or you’re just curious about safe alternatives to stocks and bonds, this is your space to learn, explore, and be inspired.
Your journey to farmland investing starts now.
Brian Kearney: Welcome to The Land Ledger. Today, I have Paul Butler on. Paul is a farmer in the Macon County, Illinois area. One of the more interesting farm stories I've heard of. Also a good friend. So you guys will have to probably bear with us as we joke around a little bit more than I might in most interviews. But Paul, thank you for jumping on the show.
Paul Butler: Excited.
Brian Kearney: Yeah, I'm excited too. Let's start off with your journey into farming. How did you get started? And tell us a little bit about yourself.
Paul Butler: I grew up on a farm, hog and grain. My grandfather did. And that was just my life. I loved it. And he retired when I was 13. That was probably the hardest days of my life.
And my dad did not want to farm, so kind of got out of it. And that was my dream to get back into farming. And I got moved to St. Louis, got an engineering degree, worked at several companies down there, a few startups, a couple of Fortune 50 companies. And I always wanted to retire at age 55 and start farming.
That's what I told my wife and we had a little bit of ground for my grandfather left over 160 acres that he had bought, that grandpa passed away, but my parents rented it out, but it wasn't really enough to be able to move a family back and even consider farming on. The farm across the road from that came up for sale.
My parents and uncle bought it just as an investment. And I kind of looked at it and went, “Wait a minute, 250 acres. I can probably break even on that.” So I wasn't planning to, had no dreams of becoming a full-time farmer, really, but it was just something–I can do this, pay for the equipment. And it gave me an opportunity, I thought, to move back home, to be close to parents, let my kids know their grandparents a little better. And I was a consultant at the time at a very large company. And I asked, and they were trying to convert me to an employee. And they asked me, you know, “Would you do it?” And it was a pretty big pay cut.
I said, “Yeah, but can I work from home?” And they actually agreed. And I said, “Well, home 150 miles away” They said, “Sure.” So I went home that night and told my wife, “Put the house on the market, pack our bags, we're moving to Macon.” And I think I was 35 at the time. So, that's kind of how we ended up getting started, what was that route.
Brian Kearney: Wow. What'd that conversation look like with your wife?
Paul Butler: She didn't believe it was actually going to start farming when I was 55. She just thought that was like, when we got married in our 20s and it wasn't even something on the radar. And she had a really hard time honestly, moving to central Illinois, never heard coyotes or anything like that.
But she had a tough first year, but after that, she loves it here. And now neither one of us would go back. And it's really nice raising the kids here and your mom and dad and everything.
Brian Kearney: Oh yeah, family is important. So, during that transition, that's still a pretty big leap going from not farming to 250 acres, 150 miles away from where you were at. So tell us a little bit about your thought process on getting started, what that looked like that first year or two.
Paul Butler: No, I think at that time, had I known what I should have known, I should have been more scared, but I was just so excited to farm and so optimistic about it that I did have some friend connections back here that farmed and stuff.
And our previous tenant was very gracious on giving up the farm to let me keep it in the family. And I bought a small open station tractor and a six-row planter and worked out a deal with him where I would no till plant it and he would do my harvesting for me. And this sounds crazy now, but in the 2003, I started farming with $30,000. And that was a six-row planter. It's like a small junk tractor and a down payment on [...] That is all that I had.
Brian Kearney: Wow. What do you think that would look like now? Someone is trying to do the same. Would it be maybe double that? Triple?
Paul Butler: It's scary. You'd have to have that family guy. You could probably do it for under a hundred thousand.
I just, the cost of our inputs now are just so much higher and seed, I think we were buying corn for 90. I thought it was crazy to buy, pay a hundred dollars a bag for seed. Now we're talking 400 times. So the economics have gotten scared. I was really lucky to start farming when I did because that was about the time that costs really started ramping up.
Brian Kearney: Okay. Okay. And before that, do you think that just to kind of play devil's advocate, people that started 20 years before that would have said the same thing?
Paul Butler: Probably. Probably.
Brian Kearney: Yeah. I wonder. It's kind of like when people are buying dirt, they always say, “I'll never pay that price.” And then they do the next time.
Paul Butler: The timing is everything. And we'd kind of finished a rough session. Ag is very cyclical and I was just dumb luck to get in on a decent cycle there.
Brian Kearney: So you're an engineer and engineers have very analytical minds usually. Tell me a little bit about what you look at per acre on input costs, what your long term goals are, because not many people would do it losing money. A lot of people will do it to break even, but tell me a little bit about that.
Paul Butler: I live in Excel. I still have my engineering job, which really, it changes things in that break even is different for me than if I had to put two kids through college and make a house payment like a lot of farms are doing.
This sounds crazy, I've been farming for 22 years and I really probably haven't taken that much money that I've made. We've grown our operation a lot, built up a lot of capital. It's going to be nice in retirement to have that income, but it would be very hard without a full time job. I think I've maybe reached the point now where I could do it, but it's taken 20 some years and I don't see how short of being one of those really fortunate guys that falls into a large neighbor or relative retiring. You're going to just take years to build up that operation to where you could make it a full time.
Brian Kearney: Yeah, no, that makes sense. What things do you think would need to change in the industry to make that possible?
Paul Butler: It's just the cost of production versus [...] and we run on these just major cycles or plateaus. I got in the head of the ethanol boom and we were floating along making a little money and I was just spending every dime I made on other equipment and when the ethanol boom hit, that's when it kind of, I guess I could have put money in my pocket. I reinvested, but, and I think we all went a little bit ga-ga and thought that's the way things were going to be forever.
And it never has. And we come back down and as I think I recognize those cycles now. I didn't at the time. I was looking very year to year. And it seemed like, gosh, making this much, we can really, really I'm in the right place, but inputs always catch up. They're trailing and trailing us. And the more money we make, you can guarantee the inputs are going to go up the next year.
And that's like a little break where we now make less money. Those inputs are trailing and you're going to have a couple of really tough years. I think we're in a little bit of that right now. There'll be a time when we will make money again, whether it be a weather disaster in South America or here, whatever changes the cycle and it'll catch the input guys off guard or the timing of that.
And we'll have a couple of good years again, but you gotta really be ready to handle those cycles. And that can be hard. I know it was for me. I didn't, it took me, took me a few loops through that to recognize it.
Brian Kearney: Yeah, what advice would you give farmers to keep their balance sheet solid for those two, three, four years of tough times before you get a couple good?
Paul Butler: This is kind of a joke I tell, but I actually kind of think it's, there's a little truth in it, is that farming in a 10-year cycle, you're going to make a lot of money two years. You're going to lose some money, one or two years, probably a lot, one, and you're going to kind of float along the other six years hoping it's one of the two good ones.
And it's just, you don't know what next year is going to be. I'm like every other farmer. We get some money and I get a chance to maybe make myself more efficient and spend that on a bigger plan or whatever. It should be nice to get opposite of that cycle where you can, when you do make that money to put it away, and when everything has that downturn, the equipment prices drop and everything, that's the time to do it. It's easy to say, hard to do.
Brian Kearney: Right. Kind of like the Warren Buffett quote on investing that when people are greedy, you should be nervous. When people are nervous, be greedy. That's interesting.
Paul Butler: That's a great one.
Brian Kearney: That's interesting. I never thought about that with the equipment too. That does make sense though. If less people are buying it or you start cutting some deals.
Paul Butler: Oh, yeah. Combines this year, just down, I mean, craziest deals out there that, you know, I'd snapped that up a year ago had I known.
Brian Kearney: Yeah.
Paul Butler: The money's gone.
Brian Kearney: Yeah. Fascinating. And then in that cycle, tell me a little bit about the lagging like you were talking about how it trails a couple of years. So that sounds kind of similar to how the cash rent market is too, particularly.
Paul Butler: Oh, it's very much so, very much so. I'm going to bring a really current–to current day right now. I don't know if you saw the payments that the farmers are going to get. I think 43 bucks an acre on corn and 28 on beans or whatever. They announced that right at the time we're negotiating rents and fertilizer bills are coming out just to win out of our sales on that because the input suppliers knew that was coming.
The landlords knew that was coming, had that announced in January or something. And so they are very forward looking, but the landowners know, and the input companies know when we're making money and when we're not, but there is definitely that cycle. And I'm a member of a group called FBFM, and I should know what that stands for.
It's U of I's, it's a U of I run thing where they collect a whole bunch of financial data from me every year. You submit all of your, how much you spend on seed chemicals, fertilizer, rent, all that, and they roll it up, and they give you metrics back that you can benchmark yourself against other farms of your age, of your size, and acres in your area.
And that is fascinating, to look at that. So, looking at that, you can just see those cycles happening. And that's not just to me. When I look at the benchmarks of the rolling of income and expenses. And we're looking at, so last year, according to U of I, we lost, this is on average of all the people that they do, which is several hundred farmers across Illinois, we ran about 15-dollar loss per acre on corn. I think it was 60 something on beans. Now this next year, they're looking at gross revenue on corn, corn after beans, thousand bucks an acre. That adds up, you'd add in all your equipment, fertilizers, so you'd pass out about 750 bucks, non-land costs, average rent 339, that's negative $61 on corn this year, negative 79 for 2025.
So this is a widely published thing once they get these numbers out, and I think our bankers, our lenders, our suppliers, they all look at that and know that. So they know that can't continue. I would expect that there's always things that can happen, like Ukraine and stuff like that that screw up world markets, or how we have some sort of tariff situation with Canada on potash or whatever, that can screw individual things out.
But as a whole, I expect those to come down. And if we have another big crop, we're probably going to be over, we're going to make the oversupply worse again. So I don't know the prices are going to go up, but at some point we will have a crop failure. South America will have a crop failure. Prices will go up. Those rents, those inputs will be locked in and we'll have a pretty good year.
Brian Kearney: Yeah. That makes sense. Tell me about how you think about the commodity market as a farmer and also someone who's just interested in the investing side of the world anyways. Does that change how you view it, do you think?
Paul Butler: I don't know if it changes it. Somebody told me once there's three components to farming and there's the production and there's the keeping your costs low, whether that's a spinning wrenches and doing your own mechanical work and whatever you do to really kind of keep costs down, and there's marketing.
As a farmer, you need to be good at two of those. You can be a good marketer and a good producer, you can pay to have somebody fix your equipment. If you can fix your equipment and you're a good marketer, you don't need to be a great producer. So two of the three, really kind of fits. And I think it took me 15 years to realize I'm not a good marketer and most people aren't.
Brian Kearney: Yeah.
Paul Butler: So that's a unique thing. I actually finally broke down and paid for a service, which I don't know that the experts know any more than we do. I mean, if you look at the end of the year, they were telling us beans were going to collapse. And here we are three weeks later. Any market projections made today, you're likely to look really foolish tomorrow, or at least maybe a week or two out. But I've learned just to average, not try to hit the home runs.
Brian Kearney: That makes sense.
Paul Butler: It's an important part of it for sure. And something I, 23 years ago, I didn't think about.
Brian Kearney: Yeah. Yeah.
Paul Butler: I'll give you a check, right? Let's do it.
Brian Kearney: Do you do much hedging in your operation? Like hedge to arrive?
Paul Butler: I do. Yeah. I'm really blessed to be 10 miles from ADM. So we've just got a fantastic basis and lots of delivery options. But just from a comfort perspective, I really like having about a half, about half the crops sold with them. We're going into harvest and then try not to sell too much during harvest.
Brian Kearney: Yeah. That makes sense. What is your basis right now in that area?
Paul Butler: I'm sold out on all my beans last fall.
Brian Kearney: So it doesn't matter right now. Yeah, there you go. That's not the worst place to be for sure. Perfect. And then as far as per acre, it sounds like you're kind of working through some of those numbers. So let's just dive into that for the audience that isn't farmers and to kind of set that we're about 75% farmer listeners, 25% investors. So for that 25%, let's walk through that and talk about how farmers can make it through those years where they're losing a hundred bucks an acre, let's say, just make it even.
Paul Butler: So you gotta break it down into a couple different components.
There's certain things you can affect and certain you can't. They're projecting our county average will be 236 on corn, which is about right. 430 on per bushel right now is the estimate. And that's a little over a thousand bucks an acre. This will be grossing. Now you've got the things, the fertilizer, you can cut that one year, maybe two, depends on the farm. That's a risky thing because you end up buying a higher price fertilizer later to catch back up.
So we just kind of try to average that out. Those inputs, fertilizer, seed, pesticides, 500 bucks an acre, and you got the overhead there, and that's really, really different across different segments of farming. They're averaging 171 is what they're saying for these power costs and labor. Actually, 171 for power costs, and then you put labor and depreciation and interest and all in there, it's another 111.
So, about 250 bucks. I did a really fascinating study on what are the most profitable farms. And you'd think it would be these, the 30,000 acre guys, right? I mean, you're going to throw out the guy that farms 500 acres and owns it all. He's an outlier. But across overall, you'd think it was the most profitable farms were the 1,800 to 2,200 acre guys that own three, 400 acres [...] of all farms. Per acre, they were making more.
The really big ones, they may more in terms of dollars, but cost, but dollar per acre, they're significantly less, whether they have higher machine equipment or whether they have higher rents or whatever the situation is. So it's just so many ways to slice and dice that, who met who, to break that down.
But either way, when the average is 61 bucks an acre, I don't know that there's a way you can guarantee profitability in there. You try to hang on and get as close to it as you can.
Brian Kearney: Yeah, that makes sense. So let's go over those numbers one more time. So labor and power, you said right around 250, right? Give or take.
Paul Butler: Yup. Actually more like 180. I think there was 171 on power and 111 on overhead costs. That's labor, building rent, building depreciation, insurance, miscellaneous and interest.
Brian Kearney: Huh. Got it. And then for seed costs and input, what was that? You said 500. Is that right?
Paul Butler: 127 an acre on seed for corn, 81 for beans, fertilizer, 165 for corn, 65 for beans. Now what I do, I try to save a few bucks. I'll combine two years of fertilizer. So instead of 165, I'm looking at 230, 240 an acre on my corn grounds. I spread the two years ahead of the corn and then the beans don't get any. So if it's a heavy corn year, that could hurt a little bit more, but it's smart to break it down.
If you're going to be accurate, you break it down on what the actual cost is per, just say it's eight or ten bucks an acre I'm spreading. 120 bucks on pesticides, 127 on seed. They got 22 on drying, and 19 on crop insurance, so 465 for direct costs for total non-land costs of 747.
Brian Kearney: Yeah,
Paul Butler: That's on corn.
Brian Kearney: Is that about what you see in your operation?
Paul Butler: It is. That's fairly close, yeah.
Brian Kearney: Yep, that makes sense.
Paul Butler: I'm a pretty average sized farm. So, yeah, it makes sense that I kind of fit their averages here.
Brian Kearney: Yeah, that's interesting. And tell me about some of the other ways you can drive a little bit more revenue. I know you are always on the lookout for other programs that you're working on. Can you talk a little bit about some of those and what people should look out for?
Paul Butler: Yeah. CSP is a big one. I think that's challenging for people that turn over farms a lot, you know, more the grit and the more aggressive operators that kind of tend to swap those big acres amongst themselves.
The niche I've tried to cultivate is really good relationships with my landlords. I've never lost a farm in 23 years. Just, I treat my landlords like family and I really enjoy being around every one of them. So that allows me to do things like these CSP programs, doing no till, doing cover crops and stuff like that would not be economically viable if like cover crops is a great example.
I like what they do. I love cover crops, but I couldn't spend 30 or 40 bucks an acre to do it out there and on my own. But when the government's going to chip in 50, 60 bucks, now we're doing something that's good for the soil. And it's a little profit center that can make the difference or at least get you close in those hard years.
Brian Kearney: Yeah, talk a little bit more about the cover crop and no till and when that does make sense and when it doesn't because people outside of the industry sometimes think that's like a magic bullet that will just fix everything and it might be more nuanced.
Paul Butler: I call myself an honest no tiller and what I mean by that is I'll start out like everybody, there's a lot of people that no till it's just, I mean, it's almost like a religion and some people hate it.
I mean, they absolutely hate it. I don't know that that's really either one of those are actually fair. I've done a lot of trials and I have a landlord that will not let me do no till. He's just not going to have it on his farm. That's fine. I did it with the landlord once, but on beans, I'm not seeing one bushel difference in my no till and [...] chemical costs are a little higher. We need to fall spray, that's 12 bucks, but that's pretty cheap. And otherwise, maybe there could be a third spray depending on the year and when rains come and stuff like that, but overall significantly lower and it's not costing me one single bushel.
And I've actually seen it. I won't say, I'm not going to say it’s gonna happen consistently, but I've seen it outperform. Corn's a different story. I'm not going to win the bragging contest at the bank or at the coffee shop there on top yields. I think we are giving up 10 to 15 bushels. And if you're farming 10,000 acres, maybe that's not acceptable.
In my scenario, 1,300 acres, 1,200 acres, I have significantly less equipment. I don't have, I'm farming my ground with two old tractors that are not high horsepower and it keeps my cost down, it keeps my labor way down. So I think when I look at that 15 bushel an acre, spread that over the time and over the two years there of what I don't have to spend on farming and it allows me to keep my day job.
Because one trip over the spring, we can plant 120 acres a day. I'm not spending a whole lot of time in the field. I think I'm ahead at the bank, at the dollar, at the bottom line there in dollars, I'm ahead. Not saying it's going to work for every operation. If you've got time and you've got the equipment, might be a different scenario.
And I think it also depends on certain farms. There are farms that I'm going to say absolutely should not be tilled. There's just, it just does not help and it may hurt you. And there's others, maybe that 15 bushel on average I'm talking about on that perfectly flat black drain piece of ground that you could plant early and get the soil black. Maybe it's 20 on there. I get it. You're not going to no till it. But I love it personally. I would not be farming what I am now if it weren't for no till.
Brian Kearney: That's interesting. And for the people who are going to ask the next logical question of, or the people who are no till fanatics, as you say, where it's their religion, they'll say, “Oh, well, you haven't been doing it long enough to see the actual benefits for the soil.” But you've been doing it pretty much since the beginning, right?
Paul Butler: I have. I had a guy named Jeff Martin over at Mount Klask, Illinois, who'd been a long time no tiller and he just happened to be renting my parents ground and really mentored me getting started. I went to him when I was starting farming with the list of equipment I was going to buy, and he's like, “You don't need that. All you need is a planter, just something to eat.”
Brian Kearney: That's awesome.
Paul Butler: And so I never did go down that road. I do have it now, like I said, for certain situations, but it's just been so much simpler time wise, equipment wise. I forgot your question again.
Brian Kearney:No, that makes sense. It's the people who say that you haven't seen the benefits of the soil yet.
Paul Butler: Oh, that's something else. So I get a question a lot from people, and I think half the beans in Illinois are no till now, so that's not exactly cutting edge. Corn being, especially almost all your corn is and in Macon County, I'm a little bit of a weirdo, but being 20 years, I've got several farms that now have not been worked since I started farming my, both my current ground, the 250 here, and another one I got shortly after. I also picked up a farm that had not been tilled since 1985. Just coincidentally, that guy was a no tiller. So 40 years, that ground has not been tilled and people ask me, “How do you take care of ruts?” I don't have them. Our soil structure is just absolutely amazing. I can go out there when it's fairly wet, try not to, but we have to sometimes, especially harvest time, and we're just barely making the cleat to the combine and it holds it up.
Brian Kearney: Interesting.
Paul Butler: They say you can plant sooner without no tiller, I disagree with that. If it's dry enough, my ground, if it's dry enough to be working ground, it's dry enough to be planted. And I'm out there, first day, they're rolling, I'm rolling. We have torn up some ground before in that had a piece that was no tilled for a few years, we decided to tile it.
Pattern tiled it. And just, there was, we had to chisel all the lines and work it all down. And I saw a difference, it took me a couple years to get back to that. But that soil structure, it fixes itself.
Brian Kearney: Yeah, what explains the 10 to 15 bushel drop, do you think?
Paul Butler: I think the biggest difference is just turning that soil black so that it warms up faster and getting the ground. That's the biggest problem we have is getting that corn out of the ground, getting it warm enough to germinate. With no till, that soil is colder.
Brian Kearney: Yeah. That makes a lot of sense. That begs kind of the next question that I'd love to hear your views on what about those people who are the no till fanatics that say it's going to not only not lose you any yield, it's actually going to improve your yield over time. What explains that? Does that depend on where you're at, maybe?
Paul Butler: It could be. We're a pretty long state and you're farming, a hundred miles south of here, it's almost like we're not even in the same area of the country as far as yields and practices and everything. So, I only know this general area.
Brian Kearney: Yeah, that makes sense. I'm going to have to get someone on further in Southern Illinois that's a no tiller. I want to dive in there.
Paul Butler: Talk to people up North Minnesota and stuff. And they're like, “It doesn't work here.” And then I talked to somebody else later in Minnesota. “We've been no tilling for 15 years. It's great.” So I don't know.
Brian Kearney: Yeah. I've had similar conversations with people in Wisconsin, but I know the yields are still pretty good. So it's, yeah, interesting. But some of those others, so no till and cover crops, talk a little bit about cover crops and how the different cover crops you can put might help solve different things. I know we've had a couple small conversations about that before.
Paul Butler: So when it first really started coming on, everyone was doing ryegrass. And, I love rye. I love what it does for the soil as far as building organic matter and soil structure and breaking up compaction and all. I really got burned hard on it one year.
It was getting a little taller than I wanted and it was going to corn. Early, we didn't know maybe that ryegrass wasn't the best thing to put ahead of corn at this time. It's been 8 or 10 years ago, pretty early in the cover crop cycle. It was getting to be like 3 or 4 inches tall and I was getting nervous about being able to plant through it and there's something called the allelopathic effect.
Corn's grass, ryegrass grass, the corn comes up and touches that grass, it can pick up diseases and really, really hurt it. And I went out and I sprayed it and I sprayed it on a cold day and roundup doesn't work well on a cold day. So the corn, the grass turned yellow and it just sat there and I went ahead and planted it and then it turned back green again and it started growing and we had to spray it again.
And the corn struggled to come through and it cost me like 60 bushel an acre. That one really, really hurt. And that was on a pretty good size piece of ground too. So I'm still pretty. I'm a big fan of winter kale species, I had a corn, for beans though, I'm still fine with rye, radish and rye, love the radishes.
The one big thing that I've learned on cover crops is you're never going to get me or probably 90% performers out of the combine and to go plant cover crops and drill. And it's just, it ain't gonna happen. So drilling is better. If you got someone to do it, you got the extra resources to do it.
But if you do follow the combine the same day or that. So we started flying it on and it's expensive that way. Started in September. We just kept moving it up, moving it up, moving it up, and I'm flying the stuff on in August now into the standing corn with beans and we get great stands and it just looks beautiful right after harvest and just really loving what it does.
The one time it really scared me, we had about a three-week rain delay and I'm walking down this bean field and there was rye grass. Three inches tall and I'm like, “Oh man, what's going to happen here?” And we ended up getting a little dry spell and got in there and nailed it. And behind the combine, it looked like a golf course.
It was just green. It was just wispy stuff coming up there. We were able to cut it fine, didn't hurt anything, but I think we were about two weeks from away from a real problem there.
Brian Kearney: Oh man. What are you spraying or flying it on with? Are you using planes, drones? What planes?
Paul Butler: Yeah, there's planes, there's a couple of guys doing drones. I have just kind of dipped my toe in the water with the drone applicators this last two years. And we've got a really reliable plane that we use for fungicide and just use the same guy to get a good relationship with our cover crops.
Brian Kearney: Yeah, that makes sense then, wasn't sure if you were testing out buying drones and flying them on. Those are like a small tractor cost.
Paul Butler: I'm watching, but not ready yet. I love watching the guys do it, it's pretty labor intensive for the amount of acres they cover.
Brian Kearney: Yeah, lots of refilling.
Paul Butler: Lots of refilling, charging, you gotta get your tank mixed up before you come to the field, and yeah, I look at them, I spent the whole day. And they've covered maybe a hundred acres or I guess they can do better now with multiple rigs, but I own a pretty good size Hagee sprayer with a neighbor and when we can cover things, spray 500 acres a day, it's hard to think about messing around with a drone for a year, a hundred.
Brian Kearney: Yeah. No, that makes sense. What other cover crops are you looking at? You said winterkill species. So what specifically?
Paul Butler: I am really letting the CSP programs define that. They came out with something a couple years ago with buckwheat and the nice thing about buckwheat is it flowers in the fall and it's part of the pollinator program and I raise bees so that piqued my interest right away and I really like the buckwheat.
It's expensive but the payment on it is pretty substantial as well. So we started using buckwheat. Radish and turnips are really good. I question–I like what they do. I question, they're so clustered and it's not like a whole field, right? So I would question how much percentage they're really doing, but I guess maybe enough years you're going to cover the whole field. So I like that stuff. It's pretty fun.
Brian Kearney: Okay. Is the buckwheat a higher payment because of the pollinator program?
Paul Butler: It's because the pollinator program and then the buckwheat itself is just kind of expensive.
Brian Kearney: That makes sense. Okay. Huh. Interesting. Yeah. Talk a little bit about the bees too. That's a fascinating story.
Paul Butler: Well, it's just kind of been a hobby that I've really gotten into and started out with one or two and we got up to eight hives. It's bees in central Illinois without any wind cover. I'm on the flat part. It's there. It's hard if you don't survive through the winter, but it is a lot of fun.
It's been interesting that the people I've met through bees and some of the Facebook interactions and stuff. You run as a farmer, you run into a lot of people on Facebook that have a negative perception of farming and stuff like that. And then they like me because I've got bees, but one of the more viral topics I've had on is, this post keeps reappearing on Facebook, you know, roundup kills bees for three miles and I'm like, “Well, here's my beehives 10 feet from my bean field that was sprayed as roundup and the bees are happy.”
Brian Kearney: Oh, that's funny. Your Facebook trolling is hilarious. You had one recently about the commodity prices that had like hundreds of comments, didn't it?
Paul Butler: Yeah, I did. I came in with something about the experts were telling us to do this. And then three weeks later, here we are. And I don't envy those guys that have to make those statements on TV. You're just opening yourself up for that but–
Brian Kearney: Yeah, I think they get paid well enough to take some angry people on Facebook though. That's funny. Yeah. So what would be your advice to someone wanting to get started. Let's say they're in a similar situation to you where I don't want to dive into the people from big cities that want to come farm because that's maybe a different can of worms than what we're talking about, but someone who knows the industry.
Paul Butler: Now, I know what you're talking about. The first thing I'd say is get paired up with a neighbor or somebody close by that you trust, you can work with, that's gonna help you. I have a good friend that started recently and he's a fascinating story as well. He's, I think, 26, 27 years old. This is a guy that started four years ago and he got into a pretty good situation where he picked up a substantial amount of ground from a retiring person.
But he started farming his first couple of years with no equipment. He was working for a farmer, driving a truck, driving a tractor, and he was able to get some family ground, not a lot, and used his employer's equipment to do that in exchange for labor, was then able to run another piece and then another piece.
And then he started using my equipment. So he was like, here he is, he's been farming three years, he's up to a few hundred acres, he doesn't own a piece of iron. And that was great. Now he had to buy this farmer, the large farmer that he, well he had to buy him out. But you gotta be creative on stuff like that.
And he, I just thought, gosh, why didn't I think of that 20 years ago, starting out here, why didn't I think of that when I was 20 years old? I'd love to have been farming earlier, but just didn't have, didn't see that as a route in back then.
Brian Kearney: Yeah. I will have to have him on as well. That's great advice to find someone locally. And then I think starting small is probably a good one as well, I think.
Paul Butler: I remember the first corn I planted, I was pretty sure it wasn't going to come up. I don't know why I just did, I thought I did something wrong. And it was great.
Brian Kearney: Okay. Yeah. Tell me about that. That had to be a crazy, just feeling when you see the whole field start to pop up that very first time. Tell me a little bit about that.
Paul Butler: It was exciting. I mean, I knew a lot of the mechanical stuff from when I was a kid and helping my grandfather, had always been working on cars and stuff. So the mechanical part wasn't hard. I had a lot of agronomic stuff to learn, but I spent probably three years, after they bought this ground, I did spend about three years really studying a lot, trying to learn that, trying to give myself, maybe a self-learned minimal degree, and agronomy is not one of my strengths for sure, but I learned that. And again, it helps to have, I've got the best neighbors in the world, and I've been really good.
My local FS plan has people that really, they just advise me so much and say, “Hey, we were driving by your field and you might want to go scout that one. You might want to spray it tomorrow.” Stuff like that. It just, it'd be very hard to do by yourself.
Brian Kearney: Yeah, talk a little bit about that too because farming can be this weird mix, at least from the outside. I grew up working on farms, but I'm not a farmer myself. And it is a weird mix of you have to work with your neighbors, but you're also kind of competing for that next piece of dirt that comes up. Tell me about that.
Paul Butler: It is. It is bizarre. Do you remember when texting came out? I don't know, it was maybe 2008, 2009, whatever.
Brian Kearney: That's about right. Yeah.
Paul Butler: I was sitting in the office in my St. Louis job and my phone is blowing up with texts, what's going on and everyone's planting and they were all sharing, this was before group chats. We're all just texting each other. And now, especially with auto steer, just all planning season and all harvest season, it's just constant conversations of sharing yields or sharing what's going on, or I'm here, I'm there, or, you know, and competing with the local guys, we do, I've probably got, I'm going to say a dozen or 20 people that if I know they've got this farm, I've got no interest in going, I would not take a farm away from that set of guys. And I think they're the same way as well.
And we text each other, we're 20 miles away from the John Deere dealer, all of us are out here and, “Hey, I'm going there. Do you need anything?” And especially in the spring and the fall, we've all got parts waiting there, something. And when they bring it back and off, I just, it's really a great community, but it is bizarre when the piece of ground comes up for auction or something like that, we can throw it. Sometimes a little feelings get hurt and two years later, everybody's good again.
Brian Kearney: Yeah. Yeah. No, that makes sense. And that's, I mean, that's rural America to a T really. We might have our differences, but at the end of the day, it's a very supportive, supportive community in the Midwest. So that makes a lot of sense.
The last question I have written down is if you were talking to a young ag grad or a grad from a business school or maybe a liberal arts degree, recent graduate who wanted to go into the ag space and they couldn't choose being a farmer, where would you tell them to look?
Paul Butler: That is a great question. I wish I had researched myself 20 years ago. I went into computers and was really blessed to go into that industry at the right time. I'm saying 20 years ago, it'd be 35 years ago. Now that I'm in the ag industry and I go to the Farm Progress Show, I talk to these young people and I talk, I'm on Farm Bureau and we have a scholarship program for ag students.
There are a ton of jobs in the ag industry that are not farmers. I didn't see that. I didn't know about that. I loved ag, but I just didn't, I don't know, blame a high school guidance counselor or something. There are all sorts of [...] pick your, what you enjoy about it. I mean, if you want to do computers, you can do it in the ag industry.
If you're interested in biology, there's routes for you or genetics or anything. They're just so much–finance. I mean, there's a whole mountain of careers in ag and they pay pretty darn well.
Brian Kearney: Yeah, absolutely. That's, I think that's a good nuance to answer. Look where you'll enjoy it and you can probably do it in ag. So that makes a lot of sense. Perfect. Well, Paul, any last things you want to impart to the audience?
Paul Butler: No, I just got it. I do have one phrase for today. I wasn't sure exactly where we were going to go in this conversation today. And I had a conversation with my banker last week. I thought you'd appreciate, and there was a piece of ground that was having an auction for a rent for rent and the guy that got it paid 425 an acre for next year, which, yeah, I just don't see how that flows. And maybe he's doing it to think I can hang on to it for multi years or whatever. But he was talking to the banker and the banker says, “What were you doing?” And he said, “Well, I figured if that guy could make money at 400, I could make money at four 25.”
Brian Kearney: Oh, no,
Paul Butler: I thought that was hilarious.
Brian Kearney: Well, hopefully, the commodity market does well this year. We'll see. That's interesting. For reference, for people not from this area, what would you say a fair rent in the area is like 325, 350, somewhere in there probably?
Paul Butler: Yeah, that range catches most of it in Macon County.
Brian Kearney: Yep. Which is still a pretty high rent.
Paul Butler: There're 400-acre farms out there and there, there's some that are less, but that's average range.
Brian Kearney: Perfect. And we saw that happen a lot with a former employer I was at for sure. So it makes sense, but yeah, Paul, this has been great. I appreciate you jumping on. Really helpful diving into these numbers and just hearing the story for young people getting into the industry. If they have some ground in the family that it is possible, I think that'll resonate with a lot of the audience. So I appreciate you jumping on. Yeah. Thanks for jumping on the show.
Paul Butler: All right. Thank you.
And that’s a wrap on this episode of The Land Ledger.
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