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Agrimarketing : October 2012
October 2012 I Agri Marketing 65 The economic cycles of the past 50 years have left a lasting impression on the farming landscape, influencing every aspect of the agricultural business, including farmstead and infrastructure. In some cases, company mergers and acquisitions grabbed headlines: In 1969, the Wickes Corporation buys Behlen Manufaturing Company. In 1984, Behlen returns to local ownership, becoming Behlen Mfg. Co., then starts on a three decade expansion run, acquiring Farmaster, Berico (commercial grain dryers), Hutchinson Steel Operations, Big Valley, WSI (division of Simplot), Livestock Equipment Division, Inland Buildings, Hawkline Nevada and EagleSpan Steel Structures. “We have been fortunate enough to acquire ten different companies or divisions of companies over the past 25 years,” says Darren Siekman, President, Behlen Country. “The most notable form today’s Behlen Country, including Hawkline 3 point equipment, Big Valley Cattle Handling equipment, and Farmaster, the gate company which really jump started our livestock equipment business.” Some companies such as Harvestore, or Big Blue, experienced the complete cycle of success to near-failure, then returning to success again. As reported in the October 2006 issue of Agri Marketing magazine: During its peak years, Harvestore was selling and installing thousands of structures each year. It had 90 dealerships serving the U.S . and Canadian markets. But then the perfect storm hit the agricultural economy in 1983. All ag commodity prices (crop and livestock) crashed, inflation was rampant, interest rates hovered around 20%, and farmers were carrying record debt levels. Land values plummeted nearly 50% in a 12-month period, forcing lenders to foreclose on farming operations that had been financially solid as a rock. Purchases of nearly all capital equipment, including Harvestores, came to an abrupt halt. Even crop input companies felt the pain when the U.S. federal government implemented the Payment In Kind (PIK) program that took 40% of the country’s cropland out of production. The program, aimed at reducing production, paid farmers not to grow certain crops such as corn, grain sorghum, wheat, rice, and cotton. Farmers received a prescribed percentage of crops they would have grown instead of cash. But all of that is history. Through a revitalization plan that includes new product innovation, feed nutrition research, changes in its manufacturing process, a re-energized sales force and refreshed communications, the company is re-building itself into the proud market leader once again. Certainly, there are many stories like Behlen’s and Harvestore’s. Plus, ag industries such as irrigation, drainage, grain storage, and farmstead/livestock suppliers have seen new companies emerge, new products introduced, and a greater focus on efficiency and cost-savings. IRRIGATION According to the USDA, in recent decades, on-farm irrigation efficiency — the share of applied water that is beneficially used by the crop — has increased. From 1984 to 2008, total irrigated acres in the West increased by 2.1 million acres, while water applied declined by nearly 100,000 acre-feet, reflecting improved water-use efficiency, as well as changes in irrigated acreage and regional cropping patterns. ***Audrey...don’t use Figure 3.3 .1 ...use the second one*** OR USE THIS FROM MICHELLE STOLTE: Chart #1 (***Audrey...that’s the one above and attached***) shows that efficient water use may be due, in part, to the increased popularity of sprinkler and drip/trickle irrigation methods. Michelle Stolte, Valley Irrigation Global Marketing Manager, agrees, “In the irrigation industry, over the past 50 years, farmers have become more efficient with water, energy, and their time. We have seen a large number of growers convert from flood irrigation to center pivots, where today nearly 50% of all irri- gated land in the U.S. is done with center pivots. And more recently, we have seen growers adopting advanced and remote technology allowing them to accomplish more in a shorter amount of time. “USDA’s Natural Resources Con- servation Service’s Environmental Quality Incentives Program (EQIP)) 50 YEARS OF INFRASTRUCTURE INNOVATION by Mike Gustafson, Deer’s Landing (more on page 66) 65 OCT Infrastructure Article_32 Feature Story 10/25/12 4:37 PM Page 65
November December 2012