MINNESOTA PORK PRODUCER SCHWARTZ FARMSPUTS FAMILY FIRST.

On a gravel road west of Sleepy Eye, Minnesota, is a well-kept yet unassuming farmstead. The farmhouse has been remodeled into an office, but there are no signs to tell you this is the headquarters of Schwartz Farms, Inc.

The plain, hardworking surroundings are by design. Inside the office, John Schwartz admits, “We like to keep a low profile.”

He would be the last to nominate himself as a top farmer, but Schwartz and his brother, Joe, are two of the most respected independent pork producers in the U.S. Their family-owned company owns 62,000 sows and finishes all the pigs produced. Another brother, Mark, and many other family members are involved in the business, as well.

The growth of the farm has been slow and measured. Schwartz Farms was founded by John and Joe in 1978 as a crop farm. Originally, the brothers wanted to remain on the dairy farm where they grew up.

“Joe and I wanted to start farming. We discussed our wishes with Dad to expand the dairy. He said we were better off doing something on our own,” explains Schwartz. “It was a hard decision to make, but in hindsight it was the best thing that happened.”

In 1981, John and Joe purchased a 700-head finishing barn to diversify their corn and soybean operation. That was their entry into the pork industry.

Contract growers are key ingredient

In the early 1990s, they pioneered the first farrow-to-wean contract in the state of Minnesota. Schwartz credits their contract growers with much of the company’s success.

“When I started going out to sign up contract growers in the early 1990s, I would lay awake at night worrying about the risk,” says Schwartz. “I felt a tremendous amount of responsibility toward those people. They would ask me, what’s this barn going to be worth in 10 years? I didn’t know. Now we know if was a good deal. Those barns held their value and are still going today. It was a success story. That has been rewarding.

“I know the hog industry has had its controversies, but it’s been a real success story from the standpoint of making equity. Even in terrible economic cycles, the assets really held their value. Back in the early 1990s, people didn’t know the value of manure, but that value is accepted now.”

Today, about two-thirds of Schwartz Farms pigs are housed and fed by more than 125 independent family farm contactors. Schwartz would like the number to be even higher, but many contract growers are aging and don’t have children coming back to the farm.

“We have to put our labor in the facilities because of the aging demographics. It’s not like the hog industry 20 years ago. But our first choice is to work with independent family contractors. They are hard to beat.”

Conservative growth

By purchasing, not building, sow farms, Schwartz Farms grew to 25,000 sows by 2003 and 50,000 sows in 2015. Today, the company owns sows in Minnesota, Iowa, Nebraska, and South Dakota.
Schwartz sells hogs to most of the packers in the Midwest. The family is not involved in the packing industry. Yet.

“We’ve been on the short end of the stick for past 24 to 36 months because we are not integrated,” says Schwartz. “The percent of the cutout pork producers have been receiving has been historically low during this time frame.”

He hopes when the new Seaboard-Triumph Foods plant in Sioux City, Iowa, gets a second shift and the new Prestage Foods plant opens in Iowa there will be a better balance between the supply of hogs and slaughter capacity. “It’s been a challenge for those of us that aren’t integrated.
“It has always been my hope that being a live producer and supplier to a packing plant can be a viable business model. However, the last 24 months have definitely challenged that in my mind,” says Schwartz. “We are looking at all options and not ruling anything out.

“We’re good at raising pigs, and they are good at packing, but we may have to go our own direction to get an equitable share of the cutout.”

Market discovery needed

Schwartz Farms negotiates 7% to 10% of its hogs on the open market. The goal is to keep the Iowa and Southern Minnesota negotiated hog market alive for the sake of market discovery.

“If we don’t keep it alive, the only thing we have is the cutout,” says Schwartz. “There is no producer participation in the cutout; it’s all the packer and retailer. Price discovery needs to be competitive and transparent. This has been a concern of mine for years. I encourage producers to negotiate more pigs. If they are not comfortable negotiating, there are firms available that will negotiate for them.”

He says the company has strategically aligned itself with some of the best employees, contractors, meat processors, and consultants in the industry. His parents, Jim (now deceased) and Irene Schwartz, instilled in their children five main values that still guide them today: integrity, respect, excellence, innovation, and adaptability.

“It’s been an interesting ride,” says Schwartz. “We are proud of our legacy and remain confident in the future.” BY BETSY FREESE.

ILLINOIS FARMER DOUG MARTIN IS ALWAYS HUNTING FOR FARMING OPPORTUNITIES.

In 1997, Doug Martin graduated from college and started farming with his dad, Jeff Martin. With only 150 acres of his own, Doug knew that he would have to be on the hunt to grow the operation to make a career of it.

At the same time, he worked alongside his dad on the family farm near Mt. Pulaski, Illinois.
Between the two of them, they have now grown their operation by 250%, in the last 20 years.

“We had a gradual growth, for a while,” Martin says. “But in the last 10 years, we have doubled the size of our operation. So, with that growth and Dad contemplating his retirement, Derrick (my brother) has returned to the operation to farm with us.”

Over the years, the Martins have used unique strategies to stay competitive in acquiring land by purchasing and leasing.

For instance, several years ago, the Martins started a conservation tree and grass business. Also, they have developed biological products to improve soil health to boost yields, all while balancing relationships with several different landlords.

“It takes a lot of communication and attention to detail, keeping everyone informed and working together to be able to remain successful,” Martin says.

He adds, “We pay attention to what we are doing and remembering the reason we are out here farming. Not too many people have the opportunity to do what we do. While it’s a challenge to be successful, it’s an enjoyable challenge.”

Staying connected to the landlords is a key factor in being successful. To do that, the Martins have used today’s internet technology to their advantage.

“Whether it’s a simple text message, email, phone call, or our activity on social media, there is just a whole array of ways we keep in touch with landlords, nowadays,” Martin says.

The Martin family started a website and Facebook page to post photos of planting, crop growth, and harvesting for landlords to see.

“The way we communicate is landlord-specific. Some want to hear from you through a phone call once in a while, some want to know about everything going on, others text a few times a week to stay in contact, and others enjoy the website we created to display our progress on their land,” Martin says.

After writing a weekly blog on the family farm’s website, Martin has shifted more of his social network reporting to platforms such as Facebook and Twitter.

“We can give our landlords quick updates more often than through the weekly blog,” Martin says. “The landlords feel like it is so easy to stay in touch this way, even though they might be on the other side of the country.”

Going forward, Martin and his brother plan to double the size of their operation in the next 10 years.
“We want to grow with land that is geographically and economically feasible. We don’t want to have to travel the whole state of Illinois just to be able to grow,” Martin says.

On The Hunt

So, the hunt is on for more land. And the Martins know all about hunting. It has been a family passion for decades.

“Our family have been outdoorsmen for several generations. My kids are getting old enough now to get them involved in hunting,” Martin says. “We’ve always felt that hunting and farming go hand-in-hand.”


Martin adds, “My great-grandpa, grandpa, and father all enjoyed hunting and have passed the passion down to my brothers and I. And we consider ourselves conservation farmers with a lot of land in the conservation reserve program and places to enhance wildlife habitat. So we take advantage of that during the hunting season.” BY MIKE MCGINNIS.

SOYABEANS CLOSE 11C HGHER TUESDAY.

DES MOINES, Iowa -- On Tuesday, the CME Group’s soybean market felt the support of buyers, to end the day on a double-digit rally.

At mid-session, the July corn futures are 2¢ lower at $3.65, while December futures are 1 3/4¢ lower at $3.83.

July soybean futures are 2 3/4¢ higher at $9.68, November soybean futures are 1/4¢ lower at $9.60.
July wheat futures are 3¢ lower at $4.20.
July soy meal futures are $0.50 per short ton higher at $313.00. July soy oil futures are $0.04 higher at 33.06¢ per pound.

In the outside markets, the Brent crude oil market is $0.01 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 15 points higher.

Deanna Hawthorne-Lahre, StatFutures co-founder and trader, says this market is just so flatline.
“The damage done in the hard red winter wheat areas was marginal, and the wheat market is eroding as we head into harvest,” Hawthorne-Lahre says. “Investors are looking for areas to take a shot from the long side, but volality indicates there is no hurry, as do the spreads.”

She adds, “The corn market should be checked for a pulse. Haven't seen a market this dead since 2002 or 1985. And soybeans got a freckle of life with some business, Tuesday from China. But, it feels iffy to me at the moment.”

The July/November soybean futures spread will be an indicator if this market comes alive again, she says.

“With plantings moving along, in spite of some weather issues, and of course very little drought around, this could be a long year in a trading range,” Hawthorne-Lahre says.

Monday’s Grain Market Review

On Monday, the CME Group’s farm markets sold off strength in soybeans, while corn remained in negative territory.
At the close, the July corn futures settled 3½¢ lower at $3.67½, and December futures closed 3¾¢ lower at $3.85.

July soybean futures finished 2¾¢ higher at $9.65¾; November soybean futures finished 1¼¢ higher at $9.61.

July wheat futures finished 9¾¢ lower at $4.23.
July soy meal futures closed 90¢ per short ton lower at $312.40. July soy oil futures settled 0.25¢ higher at 33.09¢ per pound.

In the outside markets, the Brent crude oil market is 99¢ per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 93 points higher.

Dustin Johnson, EHedger LLC grain analyst, says weather and rumors about China are moving the market.

“All we have heard is that China was rumored to be buying U.S. beans. No confirmations on the Chinese buying and very little weather to support the market one way or another are the factors that the investors are using to place bets,” Johnson says.
“There is still high conviction that soybeans are overpriced to corn and the market may be working some of those position holders out,” he adds. BY MIKE MCGINNIS.

BRAZIL ACTS TO PROTECT ETHANOL PRODUCERS AS U.S IMPOTS JUMP.

SAO PAULO, May 15 (Reuters) - Brazil is toughening requirements for ethanol importers to protect domestic producers from an incoming surge of U.S. corn ethanol, a minister said on Monday, adding that he opposed the idea of new tariffs that could trigger costly retaliation.

Buyers of foreign ethanol will now have to follow a rule applied to Brazilian ethanol producers regarding minimum stocks to guarantee supplies in the market, according to a government decision published in the official gazette on Monday.

Energy Minister Fernando Coelho said the measure aims at giving "fair treatment" to importers and producers in the face of a "violent" increase in shipments from the United States.

Brazil is the main market for U.S. exports of corn ethanol, which have swelled in recent months to fill a gap left by falling domestic output. Brazilian mills have diverted more cane to sugar production because of better returns for the sweetener.

Ethanol imports from the United States increased fivefold to a record 720 million liters in the first quarter, worth some $363 million, according to Brazil's trade ministry.

Local mills currently need to have ethanol stocks equivalent to at least 8 percent of their total sales in the prior year by March 31 each year. The rule was created to guarantee enough ethanol between Brazil's cane harvests in the main center-south producing region. That period runs from December to the end of March.

"This measure means that an importer will have to invest in infrastructure. It will probably take out of the market those smaller traders who do opportunistic deals," said a local ethanol trader who declined to be named.

Coelho said Brazil needs to protect its ethanol industry from U.S. corn ethanol with measures other than import tariffs, which could trigger a U.S. response. "I think tariffs could cost us even more in retaliation," he said.

Reuters reported on April 27 that Agriculture Minister Blairo Maggi had asked Brazilian trade authority Camex to impose tariffs on U.S. ethanol imports. The cane industry in northeast Brazil, the main point of entry for ethanol imports, is leading calls for a 20 percent tariff.
The Camex executive committee held off deciding the matter at a meeting this month to consider the broader implications of a tariff. It is expected to make a decision at a meeting in early June. (Reporting by Luciano Costa; Additional reporting by Anthony Boadle in Brasilia and Marcelo Teixeira in Sao Paulo; Writing by Bruno Federowski; Editing by Brad Haynes and Paul Simao). BY LUCIANO COSTA.

FARM GROUPS OPPOSE END TO USDA'S RURAL DEVELOPMENT OFFICE.

Fearing the demotion of rural economic concerns and harm to their communities, a coalition of rural and farm groups urged leaders of the House and Senate Agriculture Committees to oppose the USDA’s plan to eliminate the Office of Under Secretary for Rural Development.

Last week, Secretary of Agriculture Sonny Perdue announced a reorganization of the USDA that would eliminate the rural undersecretary office and transfer the duties to a special assistant.
“Rural America is much more than production agriculture,” said National Farmers Union president Roger Johnson, one of the participants in the group. “Family farmers and ranchers need vibrant rural communities because they provide desirable amenities and jobs. Underfunding, understaffing, or demoting the Rural Development Mission Area within USDA would cause real harm to programs that benefit farming and rural communities.”

Rural families, businesses, and cooperatives need strong, healthy communities with efficient transportation infrastructure, high-speed broadband, affordable housing and water, quality schools, and public safety, the group’s letter to Congress said. “We support and encourage the efforts to strengthen agricultural trade, but our underserved rural communities also need a robust RD program to be competitive in the national and global market.”

They pointed out that rural development is currently overseen by an undersecretary who is part of the USDA subcabinet. The reassignment would end direct congressional oversight on the office’s work, the letter said.

They viewed elimination of the office as part of a series of events “causing concern” in rural areas. The group cited the White House’s recent budget proposal that eliminates rural utilities and business programs, the Community Development Block Grant program, and the entire portfolio of Rural Business Cooperative Service programs and the Rural Water Wastewater Program. BY CHUCK ABBOTT.