'Risk management and land management are crucial'

Patrick and Kristin Duncanson run a 1.300-acre arable farm, 60.000 fattening pigs and a 13,5-acre solar farm near Mapleton, Minnesota. They are investing in new market opportunities by growing non-GMO soy, although their profit lies in risk management. "As long as you cover your break-even margin well, you can in principle never go bankrupt."

Patrick (Pat, 58) and Kristin (Kris, 61) are, as they say themselves, at heart farmers who also keep livestock for business reasons. At their home location, a new 13,5 hectare solar park is the eye-catcher. It is right behind the village of Mapleton. "This location has caused quite a bit of discussion," says Kris. "However, after local residents were promised a 10% discount on the energy bill, the majority agreed. Converted to more than €0,10 per Kwh for a period of 20 years. That is enough to recoup the investment."

Cows out, pigs in
The solar park suits the entrepreneurs, especially because they continuously look at innovations and changes in the market. Until a few years ago, they kept thousands of cattle in feedlots, in addition to several thousand fattening pigs. They examined the figures, looked at the picture towards the future and decided to radically get rid of these feedlots and expand them into finishers. They keep 60.000 of those in various locations in Minnesota. They fatten those pigs in the usual way and for 1 integration. "You have to make clear choices about this," says Pat. "Either you go for specialization and low costs, or you focus on niches by, for example, feeding non-GMO. We see too few opportunities in the market in the latter route. That is why we go for the first route for pigs: efficiency and low cost."

Pat knows what he's talking about. He studied economics and works a lot with futures and options via the futures market in Chicago. Especially when planning and selling grain maize, which they grow on 700 hectares of the total 1.300 hectares they use. The other 500 hectares are for soy cultivation. A small portion of the corn goes to their own pigs. Most are sold. Other feed is bought back for the pigs. At the end of October, the selling prices of grain maize are around €165 per tonne. Duncanson secured half of the expected crop yield at €180 per tonne and 20% at €195 per tonne. "We leave the selling price of the last 25% to the free market. With those prices in the presale we break even," he says. "As long as that works, by fixing purchase and sales prices, you will not go bankrupt as a farmer."

Trading is a game
He sees it as a game to fix the prices at the right time. "That doesn't always work out well, but we put a lot of energy into it. Experience shows that it is more difficult to make a profit at high prices than at low prices." The corn goes to the food industry and ethanol production. The seed the Duncansons use has been non-GMO for 4 years. "Not because we are against Monsanto, although they have developed a system that is especially attractive to their shareholders and not to the farmers. We now pay about $144 per hectare less in seed costs and only $25 more in crop protection products. , as long as you manage your soil well. The availability of Roundup Ready GMO seed has made many farmers in the United States lazy.”

A large part of the grain maize is first stored on the farm. The total capacity is 8.600 tons. That amount is roughly in line with the total maize harvest this year. It is estimated that the yield will be 12 tons per hectare and therefore a total of approximately 8.400 tons. That is 10% lower than other years. The reason for this is the extremely wet spring. Sowing was forced to postpone for weeks, but Pat and Kris got everything in the ground. The growing conditions in the summer were good. In September and October, the entire Midwest suffers from heavy rainfall, which complicates the harvest. "The maize is holding up well and needs a little more time. We have caterpillars under the wagons and combine. It takes more time and money, but I am confident that we will be able to harvest the majority well in November," Pat nuances the difficult conditions.

SW soy can be harvested between mid-September and mid-October. The 500 hectares of soy are half non-GMO and intended for export to serve as tofu. A premium of $54 per tonne is paid for this, on top of the prevailing market price. It was around $235 per tonne in mid-October. "The additional cost is necessary to compensate for the slightly more expensive production method and lower yield," says Pat. "This year the soy yield is on average at 3,6 tons per hectare. In years with better weather conditions around 3,9 to 4 tons." It is not yet possible to sell all soy for tofu. For the sake of risk spreading, the entrepreneurs do not want that either. They grow approximately 250 hectares for Syngenta under contract for seed production. It pays a premium of 10% on top of the market price.

High organic matter content
There is a lot of good soil in the region where Pat and Kris farm. “Most plots have an organic matter content of 5 to 5,5%. There are even plots that have up to 12% organic matter," says Pat. "That seems nice, but it definitely has a downside. The topsoil becomes so loose at high percentages that herbicides do not take effect well and you have to adapt the machines to it." An advantage is the low N application. For maize, 50 kilos of N are given via liquid urea, 45 days after sowing. In the autumn or spring, the soil is fertilized with slurry from our own pigsties. Plowing is not actually done, just cultivating and preparing the seed bed. Grain maize and soya are alternated as much as possible. That is not entirely successful. Part of the acreage has 2 years of maize In the second year of maize cultivation, a small amount of fertilizer is added during sowing and an extra round of herbicide is applied.

In winter, all plots have a green manure. Usually oats or ryegrass. "The use of green manures, minimal tillage and heavy investment in good drainage have boosted productivity enormously in recent years. In my opinion this is of much greater influence than biotechnology," says Pat. "We also use crop protection products and GMO seed, but they are tools. The basis for good soil and good yields, also in the United States, is closer to nature than to GMO and chemistry."

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