With lower revenues expected for 2015 you can't afford to be passive about input purchases.
Garrett Riekhof and farm partners Mark Nuelle and Kevin Schemmer, Higginsville, Mo., won't purchase chemicals until they have bid out their business to at least two retailers.
"There are also a few retailers who approach us because they want our business, and I'm more than willing to listen," says Riekhof. "It's very rare that we give our business to the same company over and over. We've gone back to multiple retailers a number of times and that keeps their interest."
This process keeps retailers honest, says Riekhof. "We had a guy come back to us after we made a decision and say, 'Hey, we could have gone lower.' If that was the case why didn't you give us your bottom line bid in the first place?"
The partners also share ownership in equipment and grain storage. They usually try to buy chemicals no later than January. "We're looking for volume discounts and we need to anticipate our needs for spring," Riekhof says. "If you waited until the week you needed the herbicide it's likely going to cost more. Of course, there's interest cost and some risk because I don't always know exactly what we will need by buying early.
The partners are very direct, communicating what they need with a list that includes expected delivery dates. They try to be transparent in the local farm community. "There's not an implement or chemical salesperson who doesn't know where we stand and where our business is going," says Riekhof's wife, Cara. "That's because they have the ability to communicate it effectively and they're not scared to communicate what they need or share information."
Riekhof, along with other family members, will be speaking on real-world farm succession planning at the upcoming Farm Futures Business Summit, Jan. 7-8 at the Hilton at the Ballpark hotel in St. Louis. The Summit includes 21 sessions focusing on global ag demand, crop budgets, employee management, marketing and Big Data, among other topics. To learn more and register follow this link.