Young Farmer’s Working Principle: ‘Make a Profit, Have Fun’ — DTN

Water touches everything. That is the fact of life for all that happens on Marc Arnusch Farms, working ground in the Prospect Valley of Colorado, outside Keenesburg. Without deep wells and water from snowmelt, his farm would be a dusty, dry place.

The 2,400-acre operation is fortunate, then, to be located atop the Lost Creek Water Basin. It is a dependable source of water under broad, flat plains situated 6,800 feet above sea level, not an hour’s drive from Denver and the Front Range of the Rocky Mountains. The reservoir waters a rotation of as many as nine crops — sugar beets, grain and silage corn, hard red winter wheat, white wheat, confectionary sunflowers and pinto beans, among them.

“Research, networking and marketing drive our farm, now and in the future. We cannot learn enough to satisfy the desire to create. The target of success moves every day,” Marc explained.

Marc is a seed salesman for DuPont Pioneer, sells high-quality silage into a large and growing dairy market and consults on rural-urban land issues. You may find him sticking his head into a state representative’s office from time to time, too.

The working principle on the farm, Marc said, is “to make a profit and have fun.” His everyday goal is “to reduce all our limiting factors, as much as possible.” Marc looks for opportunity to put the farm’s skill sets to profitable use — whether it arises from success or failure.

“What we see today changes slightly for tomorrow; however, the common theme is the continual drive towards efficiency through development,” Marc said. “In other words, I do not see what our farm does as production agriculture; rather it’s more of agriculture development. Agriculture needs developers.”

When his Weld County made a change that encouraged dairy production, Marc didn’t build a dairy. “Dairying is outside my skill set right now,” he said. “But because of [a] development-type attitude, my neighbors and I now have two new markets for the crops we produce.”

The Arnusch family comes to Colorado from Austria. Marc’s father, grandfather and uncle literally walked out of German death camps, and by 1952 they were working as farm laborers in the sugar beet fields of the Prospect Valley. Six years later, the family had saved enough money to purchase their own land. Marc and his wife, Jill, founded their third-generation farm in 1994.

AG DEPENDENT

The Prospect Valley, in Weld County, is a rich expanse located in north-central Colorado. With 2.1 million acres under cultivation, the area is as large as Rhode Island and Delaware combined. Ranchers and farmers here produce $2 billion in agricultural products. The county is the richest farming county east of the Rockies (eighth largest in the U.S.). It leads Colorado in the production of beef cattle (second in the U.S.), dairy, layers, turkeys, and sheep and lambs. The county is first in forage and corn for silage in Colorado.

Marc is in negotiations to build or acquire storage space to help drive the feed ingredient business.

It is a product in demand because of the breadth of livestock expansion happening around the farm. “Opportunities are endless if we challenge ourselves to look for and become involved in developing them,” he said.

Overhead sprinklers and flood and furrow irrigation give Marc the “nimbleness to follow market trends in order to maintain acceptable margins and ancillary opportunities.”

His farm was the first in southwest Weld County to install a drip irrigation system on an acreage where water used for crops conflicted with the demands of a new housing development. The system was designed to use both clean water sources as well as gray water generated by homes and businesses to grow nursery stock for the community. Gray water is wastewater from homes, minus water containing human waste.

LOOKING OUTWARD

That project arose out of a business concept developed by Marc. In 2006, he founded Optimal Resource Management, a business assisting developers in land and water use planning, while keeping undeveloped agricultural land in profitable production.

“Once the land was bought, some of the most prime agricultural farmland was being ignored as an afterthought by companies just looking to build homes,” Marc said. He encouraged developers to use marginal land for home and business construction while exploring ways to co-exist with commercial agriculture. The drip irrigation project was one result.

This was an outside-the-box opportunity for Marc. “It is my desire to be developing investments and create business opportunities outside agriculture. This can come in many forms,” he said. “I have become more active in trying to mitigate the competing interest between urban and rural interests.”

Five years ago, Marc set a goal to improve yields and quality by 3% annually. With higher management practices, adding new technologies tied to the global positioning system and hiring skilled and professional help, he has seen a 27% increase in his actual corn production history, 20% growth in wheat yields and a 30% improvement in his overall sugar beet yield and sugar content. He has reduced his production costs 7%.

He has gained efficiencies by dropping crops. The farm once produced yellow beans and malt barley. “We were finding little or no returns,” Marc said.

Farm growth is always on the table. But Marc’s concept doesn’t always mean growth in acreage. “If we set a goal to grow to 5,000 acres of farmland in five years, I’m sure we would hit it; but is that where we need to be? Opportunity, profitability and sustainability drive the establishment of our goals, not size,” he said.

Arnusch Farms has a production base that is 40% owned by the immediate family. Marc and Jill own 720 acres. Another 220 acres is held in a partnership with Marc’s parents.

LESSONS FROM ONIONS

He looks for opportunities to expand the farm’s production, but not only in Weld County. His experience with a now-closed onion operation opened his eyes to a world of opportunities. The onions produced on his farm were shipped to Canada, Mexico, Guatemala and Honduras, and 32 U.S. states. The high-risk ($5,000 per acre to grow them), high-reward onions were the core crop of the farm. His was the fourth largest onion shed in the state, and onions fueled much of the farm’s growth. But a combination of factors in Colorado left the crop less and less viable — and it made less sense to the overall direction of the farm.

“We earned reasonable prices,” Marc said. “But we didn’t control our own sales.”

It was an endeavor that taught him the rules, and showed him opportunities, for trade with other regions of the U.S. and across international boundaries.

“What we learned, we can apply to other sectors,” Marc said. That might mean a pumpkin operation in Kansas. Or, he is considering forming a lumber partnership with relatives growing Macrocarpa trees in New Zealand that sell into markets in China.

“Our farm will have to be nimble enough to operate in multiple geographies,” Marc said. “It is important to me to drive revenue from value-added crops, to retain value.”

NEW OPPORTUNITIES

He expects his farm’s footprint to grow. “Growth looks like a profitable value-added grain elevator as a part of a value chain system with a poultry operation, [or] a cost-plus heifer lot that we manage rather than own, or possibly even a CSA (Community Supported Agriculture) farm that is managed under our direction and brand. All of these are currently under examination within our organization,” he said.

The farm employs six; a highly skilled, 35-year farming veteran heads day-to-day operations. “I have the time now to focus on other aspects of our operation with the peace of mind that our crops are being carefully watched by one of the better farmers I have ever met,” said Marc.

Marc has hired his wife’s aunt as the farm’s financial assistant. She has 30 years of experience in small business and with the respected ag accounting firm, Kennedy and Coe. Under her direction, the farm switched to an accrual accounting method. The method produces numbers that accurately reflect costs associated with each enterprise.

“We discovered how powerful it was to have monthly financial meetings [and] how comforting it was to look at real numbers,” Marc said. The budgeting process looks out at least two years for crops and several more years beyond that as the farm anticipates large capital investments. “This might be one of the most important routines I go through as an operator,” he said.

Marc has been active in Colorado politics. Among many boards and committees, he has been president of the Colorado Corn Board, a county Farm Bureau president in two counties, Weld and Morgan, and he now sits on the board of directors of the Colorado Farm Bureau and the Colorado Farm Bureau Mutual Insurance Company. It is work done with a purpose.

“It is my belief that if you are not interested in politics, politics will take an interest in you,” Marc said. A good example of this work comes from an encounter with his home Weld County. Leprino Foods had just opened a $200 million mozzarella cheese-making facility in nearby Greeley, processing 7 million pounds of milk per day. Weld County was already the state’s largest dairy producer, but Leprino created demand for tens of thousands of additional cows.

Marc saw an opportunity to increase his silage business he had structured with other corn silage producers in the area to feed the growing number of cows. His business had already contracted and delivered 40,000 tons to a ConAgra cattle-feeding operation.

The challenge was the county’s dairy permitting rules. The rules made it difficult to attract new dairies.

PERMIT REFORMS

Marc worked closely with the county as it reformed its permitting system. The changes, which tied the number of animals permitted to the number of acres owned by a dairy, reduced the permitting process to less than six months and permitting costs by as much as $100,000. In the months after those revisions, Weld County has become home to five new dairies.

“The key,” Marc said “is that we brought the market to us. That’s better than bringing our crops to the market.” The supply chain that Arnusch Farms manages makes deliveries of between 1,500 and 35,000 tons of high-quality silage to local dairies.

It’s a good example of what drives Marc Arnusch Farms. “Returns on investment will drive most of our decisions moving forward. But our focus will continue to surround what we do best, and that is to capture opportunities for our farm and our community.”

Editor’s note: Now in its fourth year, DTN/The Progressive Farmer’s America’s Best Young Farmers and Ranchers recognizes the next generation of farmers and ranchers who are building successful agricultural businesses and who are making positive impacts on agriculture and in their communities. This is the fourth in a series of stories highlighting the 2014 honorees. The stories were originally published in the February issue of The Progressive Farmer.


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