Ep #19: Why Maximizing Yield Isn’t Always the Answer with Gabe Brown
What if the key to farm profitability isn’t higher yields, but healthier soil? In this episode of The Land Ledger, Brian Kearney welcomes regenerative agriculture pioneer Gabe Brown for an in-depth conversation about how farmers can boost profitability and build healthier ecosystems without relying on synthetic inputs or chasing maximum yields. Gabe challenges conventional ag assumptions by sharing examples from his own operation and his clients, including those producing above-average yields with fewer inputs—and sometimes no organic certification at all.
Listen in as he opens up about his experiences of transitioning to no-till farming, diversifying crops, and integrating livestock. You’ll learn the role of cover crops in improving soil health and reducing input costs, as well as how farmers of any scale can apply soil health principles. Gabe also offers strategies for securing long-term rental agreements, managing livestock in a time-efficient way, and increasing landowner value.
Listen to the Full Episode:
What You’ll Hear About in This Episode:
Why chasing maximum yield is often a mistake.
The five principles of soil health.
Why it’s better to focus on ecosystem function and resilience.
The role of livestock in soil regeneration.
Strategies for land access and long-term leases.
How using cover crops reduces costs.
Ideas Worth Sharing:
“ What we tell our clients is use livestock as a tool to enhance the life and function of the soil, and also convert some of those cover crops into dollars.” - Gabe Brown
“People don't understand that we've gotten these yields at the expense of the environment and the expense of how our ecosystems are functioning.” - Gabe Brown
“I like to think of it as stewardship. We need to do a better job of stewarding the land in order so that these natural processes can kick in.” - Gabe Brown
Resources:
Share the Love:
If you like The Land Ledger podcast...
Never miss an episode by subscribing via Apple Podcasts, Spotify, Amazon Music, or by RSS!
Read the Transcript:
Gabe Brown: Every year, my most profitable field was where I did not use synthetics. It wasn't my highest-yielding. Well, for someone who at the end of those drought years was 1.5 million in debt, profit is what matters. We have not used any synthetic fertility since 2007, and yet we're profitable every year, and we're very resilient because of our soil health.
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: Alright. Welcome to the Land Ledger today. Very excited for this conversation. I have Gabe Brown on the show, and anyone in the regenerative organic world will know that name. So yeah, Gabe, thanks for jumping on the show. I'm excited to dive in.
Gabe Brown: Well, thanks. Great to be with you today.
Brian Kearney: Yeah, it'll be fun. I wanna start a little bit with your origin, kinda where you grew up, and I'll preface with, I visited the University of Mary in Bismarck. And we made the mistake of visiting in February. It was like negative 26 without wind chill. I'm like, “Oh man, I don't know if I can do this.” And I'm in central Illinois, where it gets pretty cold. Tell us a little bit about growing up.
Gabe Brown: Yeah. No, central Illinois does not get cold.
Brian Kearney: Okay. No, not comparatively.
Gabe Brown: Yeah. And my Canadian friends will tell me that Bismarck, North Dakota, does not get cold. So yeah. I grew up here in Bismarck, North Dakota. I was not, my parents did not farm a ranch. I took a real interest in agriculture when I took a vocational agriculture course when I was a freshman in high school, and I was just infatuated with everything agriculture. And I started working on farms during the summer, really piqued my interest. Worked on a number of different farms, dairy farms, and I went to college then to become a vocational agriculture educator. I thought that would be my end to agriculture is through education. During college, I married my college sweetheart, who happened to be from a farm.
Her and I were high school classmates, and she had two sisters, no brothers, and so her parents asked us if we'd be interested in coming over, taking over the farm, which I was enthusiastic about. My wife jokes that she married a city kid to get off the farm, so she wasn't here as excited about it as I was.
But we moved on to the farm after graduating from college and spent the next eight years learning agriculture from my father-in-law, who was old, stubborn German. He was heavy on the tillage and manual labor of picking rocks and low on diversity. And so we learned how to summer fallow, and grow monoculture crops, and that's how I learned to farm.
Brian Kearney: Yeah, that's interesting. That's a cool background, and it kind of hit me during this conversation. I've already read the book, I don't know why it didn't hit me then, but it's kind of interesting, is I've got a very similar background into the ag world. Maybe not the education side, but I did the same, married my college sweetheart, three sisters, no brothers. I haven't taken over the farm. Don't know if I will. My wife's at the point where she doesn't want, she has a lot of friends in town. But that's interesting. That's very interesting. Yeah.
Gabe Brown: So then what happened? We had the opportunity after eight years to purchase a part of the farm from my in-laws. And we did that, and we were renting the rest of the farm from her sisters. And one thing about me, I really am an avid learner, a lifelong learner. The more I know, the more I know I don't know. And I wanna learn more. So every day I try and learn something. And I had studied about no-till, which was about exact opposite of my father-in-law's you could get a no-till operation.
But in 1994, I sold all my tillage equipment and bought a no-till drill. And I sold the tillage equipment because I had a friend who actually told me, “Gabe, if you're gonna go no-till sell your tillage equipment, then you can't go back.” And I did that. And so I was committed.
Well, 1994, we had a bumper crop for us that year, and I thought, “Boy, this is easy. I've got it made.” But 1995 came along, and the day before I was gonna start harvesting 1200 acres of spring wheat, we lost a hundred percent of our crop in a hailstorm. So that was pretty devastating. We did not have hail insurance.
My father-in-law had farmed there 35 years and had only had hail a couple times, and it wasn't a major event. That set us back financially. But what do you do with hailed-out wheat ground? You seed it back to wheat the next year, which I did. Lo and behold, we lost a hundred percent of our crop to hail again.
So my wife and I took off farm jobs, and we had a young family and mortgages to pay, and obviously hadn't been able to pay back the operating note from now two years. So things were getting a bit tough. Banker didn't wanna loan us money anymore to buy input, so I started to diversify the crop rotation and plant species like keys that don't require a lot of fertility, and just started to diversify a bit.
1997 came along, and it was extreme drought in this area. Nobody harvested an acre, so we were three years of no income. It was during that year, that winter, after our third year of crop failure that I went to a conference and I heard Don Campbell speak and he made said this statement, he said, “If you wanna make small changes, change the way you do things, but if you wanna make major changes, change the way you see things.”
And I remember that sticking with me. And on the ride home that evening, I realized, “Okay, if I'm gonna survive this. I need to look at things differently.” And I started to notice that there was some changes, 'cause two years of hail put a tremendous amount of biomass on the surface. A year of drought, we had no disturbance. And I noticed that we were starting to get earthworms in our field. We'd never had earthworms before. I could never go fishing up to that point 'cause there was no earthworms anywhere. I was noticing songbirds were returning, the neo tropicals were returning to our farm. And so I started noticing more life.
Well, 1998 came along and we had diversified the crop rotation quite a bit, but we had a late June hailstorm that took 80% of our crop, so four years next to no crop income. And I tell people it was hell to go through, but it was absolutely the best thing that could have happened to me because I had to learn how to soil function, how do I infiltrate more water, how does the natural nutrient cycle work.
I actually went to the public library and I checked out Thomas Jefferson's old journals too, 'cause I thought, how did they farm prior to these synthetics? And I'll never forget in that journal he talked about planting vetch and turnips and I recount the story on the first time I went to the grain elevator and I asked to buy 50 pounds of turnip seed, and they were trying to figure out how many of those little packets it had take to make 50 pounds.
Nobody had ever asked them that. Well, I started to, I should say, that year in June. Then, after that hailstorm, I scraped up enough money to buy some sorghum sedan and cow peas, and I planted that as a cover crop simply to get feed for the livestock, my cow herd. Well, I literally did not have the money to be able to put that up for forage.
I couldn't afford the twine, I couldn't afford the fuel. So I grained that during the late fall and early winter. Well, lo and behold, the cattle did pretty good and it saved me money. I didn't have to start a tractor every day to feed my animals. They were out there grazing and that now has led to the fact that here we are in North Dakota.
Well, last year, during the winter, my son only fed the cow herd 11 days is all here in North Dakota. Hey, well, this winter he made it the full year. He never fed the cows a bale of hay. They grazed the entire winter. And people think that's not possible. No, it's possible. And they do very well. I tell people, “If you think your animals wanna stand in a corral winter, go open the gate once and see where they go.”
I guarantee they're not gonna stay in the corral. And so I started learning these lessons, Brian, about how nature really functions and how as farmers, ranches were kind of addicted to spending. We're told if you do this one thing, it'll return you so many dollars. But I tell you what, at the end, there's not many dollars left. Okay.
Brian Kearney: Yeah. That's true.
Gabe Brown: So what happened then? We went through those four years of hail and drought. I noticed a real change in the soil. We were building soil aggregates, we were seeing earthworms, we were seeing more life, and realized during that time period I wasn't using synthetic fertility 'cause the bank wasn't borrowing me any, loaning me any more money. So I'm thinking to myself, man, this does really work. Now, I'll be honest with you, as things started to turn around years ‘99, 2000, I started using some synthetic fertility. But then what happened, Dr. Chris Nichols, who's the world-famous soil microbiologist, she came to work in 2003 in Mandan, North Dakota, right.
Just 20 miles from me, and she came out to my ranch and she looked at the soils and said, “Gabe, you've made real progress, but your soils will never be as good as they could be as long as you use those synthetics because they're actually setting back the biology.” And so for the next four years after that, I did split trials.
We used various rates of synthetics. And then we always had a zero check strip where we didn't use any synthetics, and I kept very accurate records of costs and returns. And what I found was every year, my most profitable field was where I did not use synthetics. Now, it wasn't my highest yielding, but it was my most profitable.
Well, for someone who at the end of those drought years was 1.5 million in debt, profit is what matters, 'cause all I cared about was how do I stay on the farm and keep the banker at bay? And so we have not used any synthetic fertility or fertility of any kind. I don't want to give the impression that we're spreading manure or anything over the land.
We're not. The only manure we spread is what falls out of the back end of an animal when they're grazing on the land. And since 2007, so here we are, we're approaching 20 years of no synthetic inputs, and yet we're profitable every year, and we're very resilient because of our soil health. Now, I want to make this perfectly clear for your listeners.
I am in no way telling them to drop their use of synthetics. They will have a wreck, and they'll be mad at me. You can't do that. Our soils are kinda like a drug addict. You gotta wean 'em off and you gotta build back soil function, soil health, you gotta build back the water cycle, and then that'll enhance and build back the nutrient cycle.
It all takes time. But my point is you can certainly be much more profitable if you use those inputs only where appropriate.
Brian Kearney: Yeah, that makes sense. I've got a lot of questions. The first kind of comments I'll make, you can definitely tell that. You were pursuing ag education 'cause that is basically what you're already, what you are doing, just in maybe a different way than you thought.
Gabe Brown: Yeah. It's kind of ironic. Now here I am, I've retired off the ranch. We've turned that over to our son, and nearly eight years ago, Dr. Allen Williams, myself, Ray Arlet and David Brand started Understanding Ag, our consulting company, and now we surpassed 36 million acres that we're actively consulting on.
So every day is education, working with clients all over North America, England, Ireland, and yeah, it's exciting.
Brian Kearney: That's, and I wanna dive into particularly our area because the soil is just so fertile that people can still make a slight profit using conventional ag. It might not be, yeah, long term. But right now–
Gabe Brown: If I may interrupt you, Brian, I'll tend to disagree.
I'll say yes, your soils are inherently fertile, and we do a lot of work in the I states, and so I'm very familiar with it. And I'll give you this example. So back six years ago, we were doing one of our Soil Health Academy courses in eastern Iowa. We were on a farm, and I'll never forget, we showed up the day before, looked things over, come out to do the class that first morning, and they had half of an inch of rain and the field was underwater right next to the shop where we were holding the meeting.
And so I started that course saying, I was told that the soils in eastern Iowa unlike anything I've ever seen, and things are different there. And I started demeaning by saying that, and I said, “But you know what? I would not trade you soils. And the reason is, look, we had a half-inch rain here last night, and you can't even infiltrate a half-inch rain.”
Okay? When I started farming in 1993 NRCS did water infiltration tests, we could only infiltrate a half of an inch of rainfall per hour into our soil, okay? Which meant most of the water runs off carrying with it nutrients, et cetera. Now, I've had scientists using very sophisticated equipment show that we can infiltrate 32 inches of moisture per hour. Okay.
Brian Kearney: Geez.
Gabe Brown: Bismarck, North Dakota has never received 30 inches of moisture in a year, let alone in an hour. So my whole point of the story is, look, you have inherently fertile soils, but you have no natural nutrient site. You've destroyed the aggregation. You can't infiltrate water and realize that aggregation is just critical because you've got to be able to move water into the soil profile, then throughout, but also biology, soil microbiology lives in and on thin films of water in the pore spaces between those aggregates. If you don't have those aggregates, you're not gonna have the biology, and it's the biology, then running its life cycle, protozoa, eating, bacteria release in excess, and that's the nutrient cycle.
So you have to have, your soils are inherently rich nutrients, but you don't have the functioning nutrient cycle. And so what we do with our clients there is explain to them, “Okay, we gotta do–what is an aggregate? How do we build aggregates? We do testing for the biology to see how much protozoa, nutrient, protozoa, nematodes, microrisal, fungi you have in the soil. And then we adjust management practices to proliferate those beneficial microorganisms to drive your nutrient cycle, which allows you to back off on your synthetics.”
Here's an interesting point, Brian. There's a soil test out there called TND, total Nutrient Digestion. Standard Soil Tests. 95 plus percent of them only look at the inorganic fraction of nutrients.
In other words, what nutrients are water soluble the day that sample was taken? That's how agronomists can sell you more fertilizer, 'cause they're showing you, “Oh, this is all you have.” What a TMD test tells you is not only the inorganic fraction of nutrients, but it shows you the large organic pool. In other words, those nutrients tied up in decaying roots in biology, in the soil, in proper residues, et cetera.
We've tested soils on over 36 million acres. How many acres were deficient in nutrients where you could not have profitable crop production? The answer is zero. The answer is zero. We have never, ever tested a single acre that doesn't have plenty of nutrients. For instance, let me give you this as an example.
We did a large project for a company here in the Northern Plains, 45 farms. The average farm had 8,000 pounds of nitrogen in the top foot of the soil profile. 11,000 pounds of phosphorus, okay. 2300 pounds of potassium. Plenty of nutrients. Well, then why can't a producer quit fertilizing a blind fertilizer and have a profitable crop?
The answer is because they're lacking biology. So we educate producers how do you proliferate that beneficial biology to access that large pool of organic nutrients, and the biology will convert that to inorganic. So for all of your listeners in the I states, you have inherently rich soils, but your biology sucks and you're lacking biology, and that can be fixed via management.
Plain and simple. I like to think of it as stewardship. We need to do a better job of stewarding the land in order so that these natural processes can kick in.
Brian Kearney: And what would you, I think to get to that aspect, we have to flip the kind of current narrative of profitability is yield because you said earlier that you took very consistent records, and your most profitable field might not have been your highest-yielding field. Dive into that a little bit more.
Gabe Brown: So, back there when I was, I'll never forget, after those four years, the world champion corn grower came to Bismarck and put on a workshop. And I remember I went and attended 'cause I wanted to hear how he was getting high corn yields, and he was telling us about all the things he did.
It just appeared to me, man, that's a lot of inputs. So at the end of his presentation, they had a Q&A and realized corn's always about three and a half to $4.50 a bushel. So it was somewhere around there. I don't remember the exact amount then, but I'd stood up afterwards. They, he was doing a Q&A and I went to the mic and I asked him, I said, “What was your cost per bushel to produce that yield?” And he said, “Well, just over $7.” And I'll never forget that. And I, me being the big mouth I have, I just said, “Well, I have no desire to learn how to lose money.” And the whole place broke up laughing. He got kinda mad, and I laughed. But that's my point. We're fixated on yield at the expense of the ecosystem.
Because the more nitrogen you put on what's happening, your soil is 11 parts carbon, one part nitrogen. Well, you put on a pound of nitrogen, you've gotta find that soil has to have 11 parts of carbon offset that. So you're actually destroying your aggregation, your water infiltration, you're burning through your organic matter, and you go to the I states there, what's the average organic matter on many farms now? Where are you at? Two to three, maybe 4%?
Brian Kearney: Well, it's, yeah, four or five.
Gabe Brown: Four to five, okay. Well, historically speaking, the I states were in the 12 to 18% organic matter. So you're less than a third of what you once were. And that's my old point. See carbon-nitrogen ratios, and people don't understand that we've gotten these yields at the expense of the environment and the expense of how our ecosystems are functioning.
So back when my wife and I purchased the farm, our organic matter levels on our fields were from 1.7 to 1.9%, 'cause all my father-in-law's tillage. Now, historically speaking, soil scientists tell me this area should have been in the seven to 8% range. So 75% of the organic matter that was once in my soils was in the atmosphere due to previous management.
Now, today, those same fields are from 5.9 to 11.1%. So we're getting back to where, historically speaking, we were. And where's the upper limit? I really don't think there is one.
Brian Kearney: And then what I want to dive into a little bit, 'cause this is what I hear a lot from people that are thinking about doing regenerative or organic, or even more so, adding livestock or specialty onto the farm is the amount of security and safety you have, quote unquote, in the commodity market and the ability to sell into the commodity market. And the other thing I hear is, well, that's well and good, but not every farmer would be able to do that, or else the prices would drop to the point where you're not getting that premium. What would you say to someone saying those responses, which I'm sure you hear a lot?
Gabe Brown: So I will come back with this. I don't need a premium, okay. Truth be told, I can produce crops and livestocks at a much lower price point than most other people. You're in the United States, of course, corn and soybeans.
Now, I do not grow soybeans for cash crops simply because we don't get raided in early August. Yeah. I've had a neighbor who, 10 years, he grew soybeans. He harvested one crop in 10 years. We just don't get an August break. Lemme use corn as an example, 'cause we do grow corn on our farm. So my average cost per bushel of corn since 2008, And the reason I used 2008 on is that 2007 was the last year I used synthetics. So all in, including my land costs, seed costs, fuel, fertilizer, storage, going and then hauling to the grain terminal, a $1.44 a bush. Now, tell me anyone in the United States who can produce corn for that? You can't because your land cost is so much higher. So what I'm gonna say to them is, “Who's gonna be the last man standing?” Right? But the key is my input costs are so low, right? And I'm using, well, now I use corn seed that we developed over time.
I keep my own seed back, it's open-pollinated. So my seed costs are so low. We don't have herbicide costs, we don't have fertilizer. We haven't used an insecticide on this farm in 25-plus years. Okay, I don't have those costs. So my costs and then my land costs are much lower also. So my cost to production is so low.
I'm going to produce things at a much lower price point than anyone else. Now, say I lived in the I states, okay, say I lived where you're at. Can I drop my cost to production to a $1.44 a bushel? No, because land costs are higher, however, I still guarantee you I would have one of the lowest overtime, not immediately. You gotta gimme three or four years to–
Brian Kearney: That's not that long, actually.
Gabe Brown: Jumpstart soil again. But I'm gonna be able to make much higher profit than will conventional farmers. And it has nothing to do with premium at all. It has everything to do with the function of the soil.
Brian Kearney: Okay. So this model could still work even if they don't want to get the organic certification and sell in the commodity market well, so–
Gabe Brown: On that note, I don't have an organic certification. No need for it. Okay. So we have many clients in the I states who have a much lower cost to production compared to everybody else, and it's to educate them as to how soils function, and they've been able to advance their soil ecosystem to be functioning.
Brian Kearney: Okay. And I'm assuming that their yield drop is not enough to offset that difference in production cost. Is that correct?
Gabe Brown: And understand, yield drop, there's a point in time, and there's a place on every farm where how much yield can you really have without negatively affecting the ecosystem?
You've gotta find that balance. Okay. You've gotta find that balance. Now, may not be a yield drop, and you're gonna laugh at this, but it's true. Here where I'm at, Burley County, North Dakota, average corn yield is about a hundred bushels an acre. Okay. We only have 120 frost-free days, so.
Brian Kearney: Wow. That makes sense. That makes sense.
Gabe Brown: As you realized when you were here, we were, okay, so we grow 79 days CRM corn, so, but in saying that, county average is a hundred. Our proven yield on our ranch is 127, so we're 27% higher than county average. Okay. So this stuff about a yield drop, let's use oats for instance.
County average for oats is at 62 bushels an acre. Our proven yield is 112. I'm over double the yield on oats. So this misnomer about yield, I just laugh at it. All depends how healthy you get your salt.
Brian Kearney: Okay, that's interesting. So theoretically in this area. Maybe not even theoretically, you probably know farmers who are doing it, you can probably still push 250 corn.
Gabe Brown: We have clients who are yielding greater, 250 with very minimal inputs.
Brian Kearney: Wow. Okay. That's fascinating. That's fascinating. Well, that would be–
Gabe Brown: Now let me quantify that a little bit, Brian. I say with very little synthetic inputs. They are using cover crops to cycle solar energy. That is an input. It does cost money, okay. But that's where you're able to have the livestock come in and graze part of that cover crop off, adding more dollars than offsetting the cost of the covers–
Brian Kearney: That's what I wanted to dive into as well. The need, if there is one, to have animal live agriculture on the farm as well, can cover crops get you part of that way, and you may only need cattle. Do you need the full thing you hear about in the Joel Salatin model?
Gabe Brown: Yeah. So we added the principle of context. There's now six principles of soil health, and the first one is context. Let's be realistic. The majority of farmers in the I state do not wanna run livestock. They just don't want to. That's their right.
And we work with a lot of farmers who don't. What we tell them is that's fine. We can significantly advance the function of your soil ecosystem without animal integration. But make no mistake about it, your soils will never be as healthy as they would be if you integrated livestock. Livestock will just take it to another level.
Now, can you do that with single species? Yes, you can. And what we tell our clients is use livestock as a tool to enhance that life and function of the soil, and also convert some of those covered crops into dollars. Now, maybe that means you don't do it yourself, but I challenge everyone. What's one of the real problems we have in agriculture today, right? The average farmer's 62 plus years old. We need to help get the next generation started. Okay? You may not wanna graze livestock, but isn't there a young person in your community who would gladly do it? Why not work together with them? The cover crops are gonna be a big benefit to your soil, to the nutrient cycle.
They're gonna take solar energy and convert it into carbon and all of this to feed biology. Why don't you allow that to happen and help out a young person, let them graze their livestock? And so I encourage things like that. Now, for those producers who maybe don't have the land base, okay. Maybe they don't have the desire to farm 2000 acres.
Maybe they can't afford all the equipment. The equipment costs this day and age is astronomical. Okay? And you've gotta cover a lot of acres in order to make that cash flow. Well, then you can start stacking enterprises like we do on our ranch. That builds resiliency. I often hear this, “Well, Gabe, we just don't wanna do that. And we don't wanna have take less yield.” So I give this analogy. My neighbors grow spring wheated. I grow spring wheated. Let's say that they yield more than I do, which most don't. We out yield most of 'em, but say they do. Okay, so they're a little bit ahead at harvest time. Okay, well, after we'd harvest, I plant the cover crop, then I graze my grass finished beef, my pastured lamb, and my laying hands.
We got bees for honey. Who's making more profit and producing more food per acre, right. They can't even begin to be in the same league as we're in, and our profit per acre is exponentially higher than theirs. So I just laugh and I laugh when people say, “Gabe, we can't feed the world in your model.” I use that example and I say, “Okay, who's gonna feed the world first?”
And most importantly, I will guarantee you, because we're proving it out, the phytonutrient content of what we're producing will be much higher. It'll be, in other words, it's food that's higher in nutrient density.
Brian Kearney: Yeah. No, that makes sense. That brings two questions, but the first one is, what size is this possible at, and where does it cap out, and what's too small?
Gabe Brown: Yep. So our smallest client has a quarter of an acre. Okay?
Brian Kearney: Wow. Okay.
Gabe Brown: And yeah, one of our clients is netting $300,000 on three acres.
Brian Kearney: Geez. Okay.
Gabe Brown: Our largest client is 2.1 million acres. So will your farm bid somewhere in between there? Yes.
Brian Kearney: Right, right.
Gabe Brown: It works anywhere where there's land. There has to be soil. I tell people I can't do this in Indiana, but you know, I've been very arrogant in telling people that if you don't think it'll work on your land, just let me my ramps against yours, and we'll see you own your farm when we're done. And I'll guarantee it, it'll be me because–
Brian Kearney: It'll be a good deal for you.
Gabe Brown: This is simply the principles of how natural ecosystems function. It's the energy cycle, sunlight, it's the water cycle, infiltration, it's the nutrient cycle, the biology and the soil, and it's biodiversity. Those four ecosystem processes take place everywhere in the world.
Brian Kearney: Yeah, that does make sense. And then for farmers in our area, and I know you said you own and rent, that's kind of how you started. How do you negotiate that rent so that you know, “I'm gonna put five years of blood, sweat, and tears to this, and it's gonna go to the neighbor who's just going to go back to mining it and get all those benefits.” How do you navigate that?
Gabe Brown: Yeah, so a large part of our farm is rented. And the majority of our landlords, and I'd have to count up, we probably have about six or seven of them. We have been renting from them for 15 or more years.
Brian Kearney: Oh, wow. Okay.
Gabe Brown: And there have been a few others that we rented from just a couple years, and they didn't buy in. Usually, what I do when a landowner approaches us, and we get approached every year, people see what we're doing. “Hey, would you do this on ours?” We're not addicted to work. Okay, we've got enough. It's the ranch, farms, ranch is about 6,000 acres. That's enough for my son and his wife.
It's more than they can handle, really. And so we don't take on any additional land, but back when I did, I would sit down with them and explain to them, “Hey, this is a long-term process. Here's what we'll do. We're not gonna pay you the top cash rent.” I just, no reason for me to do that. If we get offered a lot of land, I tell them that, “You have to agree to this five-year lease, but here's what I'm gonna do to you. I'm gonna treat your land even better than I treat my own. And we're gonna plant cover crops on it. If it's crop land, we're gonna build you all new fences around the property, and that's at our expense. We're gonna develop water infrastructure throughout your property.” Now, I'm not foolish enough to put a new well on our land.
The well will be on our property, and we'll pipeline it into theirs, but we make it so it's visually appealing to them. And then what we do as we increase profits on their land, we're gonna voluntarily raise our rent. So the amount we pay them, they see that they like the looks of all new fences, they like the animals integrated, they like looking at the covers. We don't lose landlords if we do have a landlord who just doesn't buy in. Goodbye. We don't need to work with them, and I have no desire to farm the entire county. I have a neighbor, they farm 40,000 crop land acres. Okay, think about that. 40,000. They're spread out over 150 miles. How would you like that? That to me just doesn't sound like fun.
Brian Kearney: Yeah, that makes sense. And I don't want to dive a little bit into some of the things you've done to save time and effort because I think that's often the pushback people have with livestock is like, it is just gonna be two or three full-time jobs worth of work.
Are there ways to mitigate that and find like hacks so it's not quite, it's gonna be work, but it doesn't have to be 80 hours every week.
Gabe Brown: Yeah. So let's take our beef herd for instance. So we have a cow-calf herd. And then we keep back all the calves and we grass finish them, okay, to allow us to market. So the animals are running only two groups.
You have your cow herd, and then you have everything from weaning on. So there's two groups of animals. They're moved daily. Every day, we move them during the growing season, okay? During the winter, they only get moved maybe once a week. But the key to it is how long does it take us to move those animals? We can easily move, we have about 800 head of animals on the place at any given time, we can easily move all of them in under an hour a day, okay? Now let me ask your listeners this. How long does it take them to put up all that hay? How long does it take them to haul that hay home? How long does it take them to feed that hay in the winter?
How long does it take them to haul all the manure out and apply it to the corrals? Meanwhile, we're spending an hour a day moving a poly wire. Okay. Even in the winter. Okay. So, is that too much time? I don't think so. And then you realize what that's doing to the soil and the return we're getting from enhanced soil function is highly profitable.
We can keep a cow, our cap costs to keep a cow a year. Okay. In the US average cost to run a cow last year was $997. We're running a cow for less than $500, so less than half the cost of average. Why is that? We don't have the fuel. We don't have the depreciation. We don't have near as much labor stuck into it.
Then the other thing, we're done, we're calving in sink with nature. We don't start calving. We're just starting the calve now. Middle of May is when we start calving through the end of June. They calve out on their own, out on pasture. It's no problem. We go there and–not we–my son goes there once a day, tags any newborn calves, bans them if they're bull calves, if he doesn't want to keep 'em as a bull, work done, moves the animals. That's it.
Brian Kearney: And you don't have any issue with them giving birth on their own. You don't have the terrible–
Gabe Brown: They will only have a problem once. I laugh when I say that, but you'll find when you have animals not standing around the corral, they're out getting exercise, grazing. It's very rare. I'm not gonna say never, because once in a while you'll have something happen, but it's just rare.
It's so rare that, eah, it's just a non-issue. And it's the same way with we don't vaccinate any of our animals. Now, I'm not telling your listeners to stop vaccinating. But our animals, because of the diversity of their diet, because of the exercise they get, the health, we just don't have issues. So we haven't vaccinated everything, anything in, oh, at least 12 to 15 years.
Brian Kearney: Oh, wow. And you don't have widespread pandemics that go through and wipe out herds?
Gabe Brown: No. No.
Brian Kearney: Wow, that's interesting. That's interesting. Tell me about the diversity you're trying to put into those cover crops and into the livestock mixture going through. Tell me about the benefits of that as opposed to just single animal or single cover crop. That's usually what I see around here. If I see any cover crop, it's usually one, maybe two.
Gabe Brown: Realize, okay, covered crops are really biological primers. They're there to address resource concerns and to jumpstart the light and the diversity of biology and the soil. So if you grow a mono–first of all, what you have to do is you have to determine what's your resource concern in that particular field.
Do I have a compaction layer? Do I have salinity issues? Do I need more aggregation? Is there water ponding? What's my next crop gonna be? When does that crop need its nutrients? Because that all comes into play. If you are gonna plant a crop next year that needs its nutrients later in the growing season, you wanna have a higher carbon dinitrogen ratio in your cover crop so that biology will break it down more slowly to release those nutrients when that next cash crop needs it.
So you have to identify your resource concern first, and then we adjust the species in the cupboard crop accordingly. Okay. Now the difference between a monoculture and a diverse polyculture cover crop is simply the same as diversity in our diet. If I was to eat only donuts every day, what would I be like?
But if I throw in a salad and a steak, okay, I'm getting better. Now, there does reach a point, we have to look at it economically. There reaches a point of too many. The most I've ever tried is 75 species and one cover crop mixed. But what you'll find is usually there's just a handful that proliferate.
Okay? Now, there was some real good studies done by Tillman, University of Minnesota, that showed that biomass production increased significantly until about seven species, and then it kind of slowed down. Okay. And same with functional group diversity. Now, functional group diversity, that's your grasses, your forbs, your legumes, your shrubs.
As you increase the number of functional groups, you increase biomass production also. So what we try and do when we design the cover crop mixes is you look at resource concerns and then what species can address those resource concerns. And we try to get our clients, there's no magical number, but somewhere between five and 10 species is a good mix, depending on cost though.
And then also, are you gonna graze those cover crops? Okay. That has to be taken into account, and when are you gonna graze them? And with what class and species of livestock? There's a lot that cover crops rarely fail. It's usually the operator fails to plant correctly, and they put in the wrong cover crop for their resource concern.
And this is where education is key, and work with people who truly understand carbon-nitrogen ratios, nutrient cycle, et cetera.
Brian Kearney: That makes sense. And I think that's a perfect transition to kind of the last point. Don't want to take up too much of your time. I really appreciate this. This has been, it has been a lot of fun for me.
I think two last questions. The first one is for our listeners, and let's say they're the kind of standard listener for us, maybe 1,200 to 3,000-acre corn and bean farmer in the I states, that's our niche. What would you say their first step is? Because you are saying, do not just stop using fertilizer. Do not just throw on whatever cover crop. What would that first step be?
Gabe Brown: Yeah. So I can tell you exactly how we approach new clients in those areas. The first thing we are gonna do is proper soil testing. We're gonna do a Haney test, H-A-N-E-Y. We're gonna do a P-L-F-A test, which stands for phospholipid fatty acid.
The Haney test and the PLFA test will tell us how biologically active your soils are, what type of biology is in there, protozoan, nematodes, microrisal, fungi. Those are key for driving the water and nutrient cycles. We need to know that. Then we're gonna do a TND test, which I spoke about, total nutrient digestion, to show them this is what you really have available.
I'll be honest, Brian, with the vast majority, 90 plus percent of the new clients we work with, they're grossly overapplying nutrients, grossly over applying. So what we do to them then is, and realize it's all about their aversion to risk. Okay? So what do you feel comfortable with. Based on the soil test results, what we see is we'll do a split trial in a field. We're gonna do part of the field the way they have been seeding it, planting it. Then we're gonna do part of the field at various rates of fertility to show them, then keep very accurate records, and 98 plus times out of a hundred, the reduced rate that we show them is gonna be, have them use is gonna be more profitable.
That gives them the confidence, “Wow, I can make more money by going this route.” Then they'll expand to more acres and more acres as they build their confidence, okay? At the same time, then we start working with them on cover crops and integrating that. How do we get more diversity? Unfortunately, today, 95% of planting decisions in the I states are solely based off revenue insurance with the federal government.
And you know what? As we build soil health and ecosystem function, you really don't need that. And you find out I'm much, much more profitable and I'm more resilient by going the regenerative route than I am following the government mantra.
Brian Kearney: That's right. That's a big concern right now in the United States.
Who knows what's gonna happen over the next two years with crop insurance subsidies. Yeah. So that's interesting. That's interesting. And then the last question I have is, where would you like people to reach out to you? What is the easiest place for them to get to you?
Gabe Brown: Yep. So they can go to understandingag.com. Our Understanding Ag website, there's a resource tab. We have a lot of free materials, videos, and good information to help educate them. That is the first place to start. We also have a nonprofit, Soil Health Academy, where we put on three-day intense trainings as to how to move down the regenerative path, and that says soilhealthacademy.org.
Brian Kearney: Perfect. We'll put both of those in the show notes. Appreciate your time. This has been great. If you're ever coming through Central Illinois, be sure to stop by El Paso. Let me know. Love to, I'd love to have you at the office.
Gabe Brown: That'd be great. I would enjoy it. Thank you, Brian.
Brian Kearney: Thank you. Great to meet you.
And that’s a wrap on this episode of The Land Ledger.
Your path to smarter, more diversified investments is just beginning, so keep that curiosity alive and subscribe to the show.
If you’re ready to take the next steps and reshape your financial future, visit our website at farmlandstocks.com and book a call or sign up for our email list to get tips, updates, and opportunities to join our community.
Thanks for listening, and remember: our goal is to invest in Main Street, not Wall Street.
Disclaimer: Brian Kearney is the CEO of the Farmland Stock Exchange. All opinions expressed by Brian and podcast guests are their own and do not necessarily reflect the views of Farmland Stock Exchange.
This podcast is for informational purposes, and should not be construed as investment, legal, or tax advice.