Podcast Episode 121

Home
The Podcast
Navigating the Challenges & Opportunities of Being a Farmer

Navigating the Challenges & Opportunities of Being a Farmer

Episode 121 | 27 min

With Guest:

Karl Guetter, Farmer and Agriculture Segment Lead of Prinsco

From extreme weather and its impact on crop yields to the importance of timely drainage installations, Karl Guetter, farmer and Prinsco Ag Segment Lead, discusses the results of 2024 and offers valuable insights for navigating the challenges and opportunities of today’s agricultural landscape. Learn what’s ahead for commodity prices, how timely installations could mean leaning on drainage contractors, and the potential influence of the new administration on the industry.

Listen Now

Don't feel guilty about hiring your tiling out, even if you have your own equipment. You just have to get it done.

— Karl Guetter

Guest Bio

Karl Guetter has nearly 20 years of experience in the ag industry and, being an active farmer himself, is a true advocate for managing water on the farm.

Karl is an active farmer and the Agricultural Segment Lead at Prinsco. He’s passionate about issues facing rural America and the ag community– his experience gives him a unique perspective on what pushes farmers to manage their water, how the demand for tiling has changed and increased over the years, and why tile is critical for the sustainability and profitability of farms in the future.

Jamie Duininck (00:00):

Today on The Water Table, I’m speaking with Karl Guetter, Prinsco’s segment lead for agriculture. We’re talking all things about 2024, what happened, the dynamics of the year, and what to expect for 2025.

(00:15):

Please join us today on The Water Table.

(00:27):

Well, welcome back to The Water Table podcast. I’m Jamie Duininck and want to just share some insights on 2024 and early 2025 here, as we enter 2025. And I have Karl Guetter with me, Prinsco’s agricultural segment lead. And Karl’s also a farmer in Southern Minnesota. And we wanted to just visit about what the year’s going to look like coming up, but start with 2024. It was quite a lot of dynamics that happened in 2024. And kind of relive it a little bit and then put it to bed.

(01:01):

So Karl, thanks for joining me.

Karl Guetter (01:04):

It’s a pleasure being here. And I’m not sure 2024 wants to be remembered by a lot of folks. It was a challenging year. From a farming standpoint, the year started out not looking terrible. For the most part, I think across the upper Midwest, guys got in the field fairly early, and then once they got in the field, got a few farms planted, got a little bit done, that’s when the chaos hit.

(01:32):

So looking back, when it started to rain… It’s like any other spring, everyone thought it was just going to rain for a few days and be done. And it wasn’t this way across the entire country, but for sure up in the upper Midwest, and Minnesota, parts of Northern Iowa, it just started raining and never quit. It literally never quit for about 30 days.

Jamie Duininck (01:56):

Mm-hmm.

Karl Guetter (01:56):

So there was a ton of challenges.

Jamie Duininck (01:58):

And the interesting thing, as we are in early 2025, the winter so far is very similar to the winter of 2024, where was not a lot of moisture. Kind of average temps but not a lot of moisture. And then when it changed in the spring, it changed to way more than average moisture there in the spring.

(02:22):

But like you said, a fair amount of people got 10 to 30% of their crop planted, and then all of a sudden you didn’t plant anything for a month, to where we’re starting to get late, right?

Karl Guetter (02:35):

Right. Three weeks for sure.

(02:37):

And then the issues. And then, we got a little stretch there in May, it probably rained for two or three weeks. Once it quit, then everyone got back in the field. And from a drainage standpoint, that’s when things really started to show up because, A, it got you back in the field. But the other thing that we noticed in 2024 was that even for the fields that weren’t drained really well, it got pretty nice then. Because later in May then, so the sun comes out, it’s got some power. So it dried off the top and you could get in there, but you had a little bit of dried earth on top to float on, but complete saturation underneath. So it was really mucky, wet, cold yet to some degree underneath.

(03:22):

And we saw some atrocious stands. We saw a lot of replanting. We saw corn that did get out of the ground that just couldn’t get any legs under it. It just sat there and stayed yellow and sickly. And just really never came around the whole year.

(03:38):

Because then as we floated past that, we got into the mid-summer and it literally stopped raining. A few timely rains through July, but once we got into August, it literally stopped raining. And I think we went for 50 some odd days towards the end of August and September and October. We’re really not seeing any precipitation.

(04:01):

So I was visiting with the crop adjuster that came out and did my claim for this year, and they were doing equivalent numbers for a while of claims for wet in the spring and drought in the fall in the same year.

Jamie Duininck (04:15):

Which is very rare.

Karl Guetter (04:16):

Very rare.

Jamie Duininck (04:17):

Very rare.

(04:17):

And that’s kind of why I wanted to have this discussion about 2024. Why would we be talking about 2024 is when you’re in the water management business, the tools that we have, and the benefits of drainage and managing your water on your farm. You could kind of see all of them in one year with how cold and wet it was in the spring. Got your farm properly managed, from a water standpoint, you’re going to get into that field sooner. And then what happened later on too?

Karl Guetter (04:49):

Well, it wasn’t just a farmer that felt those pains. So we got into June, it’s wet. Well, let’s back up even further. We got into May, so the ground is still cold and wet under something that’s not drained. So now your seed corn guy’s getting affected. Because the last thing he wants is his seed corn laying in wet, mucky soil. He’s getting paid for selling you a bag of seed corn for 3 or $400 a bag. He wants good conditions.

(05:16):

Then we roll into June. Now we’ve got your crop protection guy that’s all jacked up because he knows he’s got a limited window. He just sold you in the spring, he sold you a crop protection package that had to get put on in a specific window. A lot of programs that you’re going to sign up for today, you don’t have the option to go out there from June 1st until July 1st, or July 15th. So his window just got shrunk down. Now he’s getting his world all jacked up because he can’t get out there when he’s supposed to get out there. Now he’s too late. You couldn’t get through with the pass, you couldn’t get the whole field sprayed. So now his world really gets turned upside down.

(05:52):

I would not have wanted to be a crop protection guy in 2024.

(05:57):

And that just keeps building on itself as you work your way through. Because when you don’t get timely application, you can’t get through the field when you want to, that pushes every one of those passes back. And you may be going across your farm four times in the summer from post-application chemicals, through bug juice, and whatever else you’re going to put on towards the end of the year. So it really was a tough, tough summer for anyone related to agricultural farming across the spectrum.

Jamie Duininck (06:32):

Mm-hmm. Mm-hmm. And then you multiply that, you look at a broader geographic area, and we face the same things in the Dakotas. And then you got out east into Illinois and Indiana, and it was much drier, and they had different conditions to deal with. But just talking about the basics of agricultural water management and when you can get in, one of the keys is getting in because you have the dry ground. And getting in a week or two weeks earlier, the benefit to that crop by planting two weeks earlier. And I think you saw some of that and I wanted to talk about that.

(07:13):

But the benefit of that crop, if you get after a certain date on corn, you’re going to lose a bushel a day. And in the case of those, going to go back to those first few farms you got planted before it started to rain, compared to the other stuff. What was, in your experience, which is one little microcosm of the whole thing, but in your experience, what was the difference between those farms compared to stuff you got planted the latest, say?

Karl Guetter (07:43):

Right. I don’t have any specific yield data, but I can tell you for 100% sure that through the last couple of years, anything we’ve planted earlier, corn or soybeans, has outdone the later stuff. And it really comes down to its yield. You’re obviously trying to get yield, but you’re also trying to mitigate risk. And today, we need to grow so many bushels on so few acres that you’re always going to have those little things that pop up, whether it be needing to plant at a certain time or you need to get out there and spray at a certain time.

(08:22):

And you got to try and put all those little tiny pieces together to have a really good year. And parts of the country did have really good years. There was some areas in Iowa that saw probably the best yield that they’ve ever seen. They were in early. They had good growing conditions early. And parts a little farther south, maybe a little bit drier. It was dry over into Illinois and some parts of Indiana.

(08:43):

But in order to really capitalize, you need to be able to do what you need to do when you need to do it. You just don’t get those windows. If you get too many of those little windows where they close shut and you have go to plan B, it just starts taking off yield, and you just can’t afford it anymore.

(09:02):

You got to try to mitigate that risk because that follows all the way through down to crop insurance. You need to try and get your APHs up as high as you can. We’re going into February here in a few days. Or it’ll be February when this airs, so we’ll be setting 2025 spring pricing. But for the whole package to come together, to mitigate the risk, go for high yields, it all comes back down to you got to be able to do what you need to do when you want to do it with the products that you want to use.

(09:33):

And the only way you get that done is being able to… Timely application, get out there early. So drainage is… It’s a foundation.

Jamie Duininck (09:41):

Yep, it’s a foundation. And kind of leads me to a question I wasn’t really planning on talking about. But when you look at these windows you get, and as a farmer and a guy that is in the drainage industry, I’m sure you have a lot of opinions and a lot of advice, which would be good advice. For a farmer that does his own drainage. We have a lot of customers that do at least their laterals. They might hire out domains, things like that. And a lot of those customers show up in times where they have the time.

(10:21):

So it’s like, if you get a wet, long fall where you’re harvesting until Thanksgiving, probably don’t get very much of that farmer business that year. But a year like what happened in 2024, where you stated that earlier, 50 some days of hot, dry weather; when we thought in mid-August it’s going to be a late crop. The crop’s not coming out of the field until… Probably not even going to get into the corn until late twenties, in the 20, 25th of October. I think you were done with your harvesting by… Everything, by the 25th of October. So all of a sudden you get a month at the end for these farmers that do their own work, they show up in droves, and want to do some stuff.

(11:05):

But back to the question, the question is, you can’t plan for that because these windows open and they close. And if you were just given some advice to guys that are looking at, “Hey, I need to do this work and I’m going to do it when a window opens,” is there a more plan for way to do that? And what would you suggest?

Karl Guetter (11:28):

Well, I’d say the first thing is nothing makes you want to go tile worse than having tiles sitting in your yard. So that’s part of it. It’s maybe a little selfishly on my part, but at the end of the day when it’s sitting there in the yard, even if you’re tired, even if you really don’t want to go back out, it may be a motivation. But more so I would say, there’s going to be years when you can get your own work done. And above all, your fall tillage, and anhydrous, and whatever else you have to do.

(11:59):

But honestly, for those farmers that find themselves a lot of years not having the time, I would tell them don’t feel guilty about hiring it out even if you have your own equipment. Because at some point you just have to get it done, otherwise you will just keep kicking the can down the road, down the road, down the road.

(12:15):

We’ve hired projects out, even though my brother and I have a tile plow and all the equipment to get it done. We had a pretty good fall this year. We got a lot of pipe in the ground or fair amount of pipe in the ground. But I would just encourage those guys to just think about, I got to do something every year. If I don’t have time to do it myself, just hire it done.

Jamie Duininck (12:33):

Mm-hmm. And the challenge of when you don’t have time is the same time the other guy, your neighbor doesn’t have time, and the contractor then is full a lot of the time.

(12:43):

But I think it’s the right answer, what you said around having a plan, knowing what your whole universe looks like, and how much you need to do, and getting some done every year. And some years you might even say, not knowing what that window is going to be four or five months before, “I’m going to do something else with my time after harvest. So I’m going to hire it out just for that.” Even if you don’t know if you’re going to have the ability to do it or not.

(13:12):

But I think that’s right. That would’ve been my answer. Don’t be afraid to talk to the local contractors, and you know who they are, and you fired them before. You had a tile plow. And be ready to do that. And just because you have the equipment doesn’t mean you need to do all of your own stuff.

Karl Guetter (13:34):

And I don’t think that’s terribly uncommon. I know several guys that have their own equipment that also hire contractors, to either do whole projects or maybe it’s a part of a project, or whatever the case may be. And they can have very good relationships. It doesn’t have to be us or them, or back and forth scenario. There’s a lot of good relationships out there where guys work together and get a lot of work done. And if you sit down at the table and both you come to a spot where you both think it’s fair, whatever that price or the agreement is, if it’s fair to both, that’s the right agreement. Right?

Jamie Duininck (14:06):

Yeah.

(14:06):

So let’s switch gears and talk a little bit about where we’re headed here in 2025. And we can talk about the commodity prices, that side of it. And we can also talk about pipe and what we’re seeing on the resin, and potential where things are going to shake out for the year pricing wise in our business.

(14:27):

But let’s start with commodities.

Karl Guetter (14:29):

Well, commodity pricing, we’ve seen a pretty good run. If you go back to September, October, we hit our lows. Today, we’re probably 85 cents higher on corn, probably just over a buck higher on beans. Unfortunately, the margin or the basis have widened out a little bit, so we’re maybe not seeing all that down to the farmer level. But this price run we’ve had here over the past couple of weeks has shook some corn loose. Some ethanol plants are bringing a lot of corn right now. So we’ll see what that does long term. But the report just came out last week. I think they lowered yields, lowered world stocks a little bit. So that’s helping give us some fundamental drivers to help push this thing higher.

(15:14):

I was just looking at charts a couple of days ago, and I don’t think there’s anything out there that’s going to drive it back to seven bucks, or whatever the numbers were back in 2021. But I think we could see a nice little run here, and hopefully farmers have a chance to take advantage of it and get rid of some of 2024 corn, and maybe even price a little bit of 2025.

(15:34):

Beans are a little lower right now. They’ve had a nice little run, but it’s more of a struggle right now trying to put a good number together with beans just with… I think they’re just over 10 bucks on the board right now. In most farmers areas, you’re probably looking at 9.65 to 9.85, depending upon basis in your area. So a little more of a challenge there.

(15:57):

I was pleasantly surprised at the beginning of the year. We’ve seen a fair amount of activity in tile sales, to start the year. We had a few year-end deals. Guys wanted to take care of a few things before the end of the year from a tax standpoint. But even after that now, especially in the areas of the U.S. where it was wet last spring, so that’s still in people’s minds. And there’s going to be some carryover business from 2024 into 2025. And we’ve really had a pretty nice start to January, I think, just for that simple fact. A little confidence in the prices and still remembering the pain.

Jamie Duininck (16:32):

Yeah.

(16:32):

And for our listeners, we’re recording this in late January. We’ll probably release it in February. So some of these things may change before then.

(16:43):

But what I see on the resin side and talking about commodities, but then how is that going to look for pipe is… Really, there’s a lot of dynamics going on in our world right now. One of the things that we were told we were going to see increases from was this port strike, which didn’t happen, which was a good thing for not seeing any volatility in resin. But now we have, as we’re sitting here, we got cold weather all throughout the U.S., and we’re, like all pipe manufacturers, receiving letters that there’s some shutdowns happening in the Gulf Coast and in Houston because of how cold it is. Which is going to drive prices, is it going to drive prices long term? We don’t know that yet. Probably by the time this is released, we will.

(17:31):

But we are expecting and are being told that from where we were at in the fall to where we’ll be at spring selling season to expect higher prices for our inputs. Which will mean you should consider a little higher prices in the field as far as what you’re paying for your materials come spring. So I don’t think it’s drastic, but there’s all kinds of stuff going on with tariffs and some resin comes out of Canada, some product goes to Canada. There’s all kinds of dynamics at play right now that’ll shake out here in the next few months. And we’ll know where it’s at, but I would not be uncomfortable just saying that I think it’s going to be a little higher, 5%, 10%. Probably not more than 10.

Karl Guetter (18:24):

So what scares you the most from a resident standpoint? As of this recording, we have about one day under new administration. We talked about the cold weather, but you’ve been doing this for a long time. What’s the one thing you worry about this time of year every year?

Jamie Duininck (18:42):

I was going to answer that until you said, “This time of year.”

Karl Guetter (18:45):

All right, any time of the year.

Jamie Duininck (18:46):

But I think the things that are out of your control, usually you have… When there’s dynamics that you can know about, our suppliers and our consultants will be sharing them with us like, “Hey, this is going on.” Like a port strike. There’s a chance for a port strike to happen in January. And they knew about that already in October, and so, “Let’s be watching for that and what’s going to happen.”

(19:14):

But what you can’t predict is a hurricane, which is late summer and fall. And then a winter storm, which winter storms typically have not bothered us because they’re short-term type things. And that’s what this one looks like is it’s going to get pretty nasty down there, but by the end of the week, it’s back in above freezing temps.

(19:41):

What happened in 2021 was a different dynamic. In February of 2021, where it was like nine days of below freezing in Texas, and it really wreaked havoc on those plants that were somewhere down for four weeks, and it really drove prices.

(19:57):

Hurricanes can do the same and flooding. And widespread flooding in those regions also can, but… So I’d say that’s the thing that concerns me because it’s something you can’t predict 10 days before. You don’t even know what’s out there. And then there’s always the build up to it, which most of the time the hurricanes have moved a little bit or something, and aren’t what was predicted. But there have been those that have been, and I remember them by name. So that would be it.

Karl Guetter (20:37):

For me, I have the benefit of obviously having a strong tie to the farm and then also a strong tie to Prinsco. But from your seat at Prinsco, when you look at the ag economy, when you look at what our contractors are doing… I know you’re fairly close with a number of contractors. What do you hear and what are the questions you’re being asked, not being part of the farm community? Looking at it from the outside, looking in.

Jamie Duininck (21:01):

Well, I think one of the things that’s a dynamic that’s happening right now is… And I think you see it too, is because of where the moisture was last year, we’re seeing a little bit more robust and more energy is probably a better way to say it, just more energy in the upper Midwest than we are in Illinois or Indiana. Now, I think those areas, what I’m seeing have had more moisture this winter than we’re having. So that might offset itself come spring.

(21:36):

But definitely from the fall of ’24, more energy in our business in the upper Midwest, I’d say Western Iowa, Minnesota, both the Dakotas had a lot more moisture than Missouri or Illinois, Indiana, Ohio region.

(21:55):

So that’s a dynamic that when you’re talking to contractors or… I know some in both regions. You get a different perspective by that because they’re all seeing the same lower commodity prices, but they’re being affected differently by having to deal with how wet it was last year. So that’d be one.

(22:18):

I think other things are just what’s happening now with this new administration. A lot of talk about that. How could that affect me regulation wise? How could that affect me with some of the tariffs and how that’s going to play out? So they’re talking a lot about that, but that’s pretty universal across the…

Karl Guetter (22:39):

I think you’re 100% right. In Northern and Northwest Iowa and extreme Southwest Minnesota, it was dry for a number of years, so I think up until last year, it had been four in a row maybe, below average moisture. So those guys really needed help.

Jamie Duininck (22:55):

Yeah. And they got it.

(22:57):

And it’ll be interesting to see now what happens in early 2025 from the standpoint of our consistency of moisture. It sure does feel like we’re in this pattern of several years now where our winters are a little different than they were in the rest of my life in the ’70s, ’80s, ’90s, early 2000s. They’re just not as wet. There’s not as much big snowstorms, but then we get cold and wet. How many of the last 10 years have we been cold and wet in April and May? It’s been a lot. And creates challenges for the farmer to get their spring planting done.

Karl Guetter (23:39):

It’s a little bit concerning. There’s more snow right now in St. Louis than there is in Minneapolis. So we do need moisture up here. I’m sure the frost is going down deep, but that can all change very quickly.

(23:52):

I think contractors will have a pretty good book of business again where it was wet last year. But especially areas where it wasn’t wet, we really do need some moisture again, fill up the soil profile, and it’ll be healthy for not only our industry, but everyone’s.

Jamie Duininck (24:10):

Yeah, and I think it’s interesting when we talk about what we do in the drainage business to farmers who know what we do. They’re pretty versed in water management. But at the same time, I always feel like it’s just important to keep the basics in front of everybody, that having the proper drainage done allows you to get in the field early in the spring. If it’s dry, it allows for that root to pull down deeper.

(24:43):

Last year was another good example of that, and you said that, where it was so wet that those roots didn’t go deep, where there wasn’t the proper drainage to pull that water down and allow those roots to grow deep to create a better stand.

(24:57):

So all of those things, all the way through the whole growing season, I think sometimes it’s just we have so many things. Our farmers have so many things to think about, and where is our pricing of equipment, and insurance, and fertilizer, and seed, and all that stuff to… You think about drainage when it’s wet, and really it’s got to be part of that holistic, whole approach every year. Like we said earlier.

Karl Guetter (25:29):

It has gotten a lot better. I haven’t been doing this quite as long as you have, but fundamentals are certainly important. You can keep repeating them, but today it’s a reminder.

Jamie Duininck (25:41):

Yeah.

Karl Guetter (25:41):

Back in the early days, it was new. This was something new we were trying to convince people of, and especially when the Red River Valley first started to go up there, some people thought you were pretty crazy with what you were saying. So the job’s gotten a little easier on our side, but we certainly do need to still remind them.

Jamie Duininck (25:58):

Yeah. Yeah. For sure.

(25:59):

Well, thanks for joining me today, Karl.

Karl Guetter (26:02):

You’re welcome. It was fun.

Podcast Episode 121

Navigating the Challenges & Opportunities of Being a Farmer

Episode 121 | 27 min

With Guest:

Listen Now

Guest Bio

Transcript

You Might Also Like

Podcast Episode 121

Navigating the Challenges & Opportunities of Being a Farmer

Episode 121 | 27 min

With Guest:

Listen Now

Also Available On

Guest Bio

Transcript

You Might Also Like