Growing Forward: Insights from John Kempf and AEA Growers – December 19

Hi friends. Welcome everyone. Welcome here to an awesome roundtable conversation. You know, every year that goes by some of us, we all have the benefit of another years of experience and other years of perspective. And what makes experience valuable over time is when we have cumulative years of experience. I remember Charles Walters making the comment that unfortunately there are many growers who don't have 40 years of experience, have one year of experience 40 times. But when we are able to reflect back on the things that we've learned before, the experiences that we've had and we have cumulative experiences, that's, that is where, that's where experience becomes wisdom. And so in, in that context I wanted to have, I've been looking forward to having conversations with Mike Omeg and Michael Thompson and Kelton Coleman on kind of a reflection of where we are. Where's the state of agriculture, where's the state of the industry, what in their particular operations, what have we learned and what is the pathway forward? A lot of many, many growers are very challenged economically. Economic times for growers of many crops. And what's the pathway forward? How do we take the experience and the wisdom of the past and apply that to a better future going forward? So within that context, let's do a, a quick round of introductions and for, for each of you. Tell us a little bit about your farming context, your operation, the type of environment you're growing in, the crops you're growing in, and also your, your major challenges, particularly as they relate to economics and, and agronomics, what's happening and what's going on. So, Mike Omeg, I'm going to start with you. Tell us a little bit about your operational setting.

Well, thanks for having me on the webinar, Don. I really appreciate it and I, and I hope to learn as, as much as I, as much as I share today with the other guests here, you know, I Farm about 3,600 acres of cherries in, in the Oregon, in northern Oregon and the Columbia Gorge. Really beautiful area. We're blessed with good irrigation water and good soils and a good climate for, for growing fresh cherries. We grow anywhere between 11 and 16,000 ton of cherries depending on the year. And the big thing for, for me is I've, I'm luck, I'm blessed and cursed in that I have a perennial crop and so sometimes I love that I can build my crop over time and I don't have like a field of cabbage that gets turned in. I can see the changes in my trees and that's a really fulfilling thing. But it also is a challenge because sometimes I wish I could just start at zero when I end up going down the wrong rabbit hole, so to speak. But I've been using AEA for probably close to 15 years or so and really done some great things on our production side. We face in tree fruits a lot of challenges.

That's incredible. I didn't realize it was that long. That's a long time.

Yeah, yeah, definitely, definitely is. But our challenges are changing weather and a changing regulatory environment. Regulation is becoming more difficult for a high labor country crop like ours. We take a lot of people to hand harvest our crops and do a lot of the work, and then a changing global economic landscape because of strife.

And Mike, how has just digging into the changing climate and environment, has that had any impact on pest pressure, insect pressure, or how the plants respond, heat stress, et cetera? How, how has that been manifesting for you?

Well, I think for, for us, we look at the weather record here in the Dalles where I live, and we have a record from 1874 and six of the last 10 daily highs have been set since 2020 here. So we have definitely been warmer. We have an ever increasing number of days of the year where we're over 100 degrees Fahrenheit. That's pretty darn warm for a crop. And that is just basically a bag of water and sugar and pretty delicate like a cherry is. And then we have an ever decreasing number of days that are cold in the wintertime, which is important for the physiology of the tree. So I would say that heat stress or weather stress, however you want to phrase it, is the major impact on our, on our cropping systems and on the people doing the work, of course.

So one more, one, one more question, Mike. Historically, it used to be true that the fruit tree, fruit crops and vegetable crops were, were viewed with perhaps a certain level of envy by broad acre crop growers. Like these are the really high value crops where there's the opportunity for significant returns. How has that shifted over the years?

Not in the direction I would like to report it's becoming. For the past three or four seasons we have had close to zero or negative returns in the tree fruit industry. Apples, cherries, like I grow, it's very, very challenging. And a good, a good portion of that is from our margin shrinking because we're labor intensive and the cost of labor is going up at a rate that's far beyond any price increases. Our labor cost is, has gone up by over 20% since 2020, for example. It takes a lot of hands to do our work to get the trees farmed. Know we are not mechanized in many of our operations that we have to do to grow our crops. And so pruning and harvest require many hundreds of hours per acre. And that's all done by hand.

Yeah. It's an interesting environment to be operating in for sure. And interesting in the sense of the Chinese proverb. May you live in interesting times. Yeah. Thank you. Mike Kelton, can you tell us a little bit about the. The setting that you're farming in and what your farming operation looks like?

Yes, so I farm in the southern panhandle. That'd be around Brownfield, Texas. Farm mainly cotton, peanuts and wheat. We'll have the occasional corn or chilies. I like to try lots of different things, so I kind of. Sometimes that's not a good thing, but I continue to try. About 50% of my land is what we call conventional, still using herbicides. And then about 50% of it is organic. And I have been with a 100% regenerative approach to nutrition for the last two years. And then we started in 22, but that was a NPK based approach. Then adding biology on top of it in 22 and then 23 and 24 have been just, just regenerative.

And Kelton, if I remember correctly, you sent me a message at one point this summer, maybe June or early July on about your peanut crop where you were quite ecstatic about some of the things that you were seeing. Can you tell us a little bit about that?

Yeah, it was. I hadn't seen it like that. So we were typically. We see flowering come in bunches and then by late in the season you would have flowered all the way to the end of the limbs on the peanuts. And right in mid July we were already at the end of the peanut. So a lot more early fruiting. Only drag was there is that farm water started pumping off and cut short and we didn't get to realize the positions that we had put on. But it was typically. We don't even see that every year. Fruiting all the way to the end of limbs. Maybe that's every couple years, but this year we were seeing that 45 days earlier than we've ever I'd ever seen it before. So we were.

I think farming has more what if stories than fishing. Yeah, it's like you get so close, you see you can see them on the line and then they get away. How. Why does that happen?

Yeah, yeah, yeah, yeah.

Thank you. Kelton. Kelton, what is the. What's the scale and the scope of your operation. You mentioned the different crops that you're doing. But what, what's the setting in terms of scale and size?

I'm 95% irrigated, and we irrigate about 6,000 acres. So we really, I guess we probably got about 4,000 that's organic and about 2,000 that's conventional. But it's all irrigated.

Yeah.

What do you do when you're not. Oh, never mind. You're never twiddling your thumbs. Okay, over to you, Michael Thompson. Can you tell us a little bit about your contextual setting and operation?

So, like Kelton, I'm in West Texas, in the panhandle, a little bit north of him. Grow primarily cotton. We do rotate in wheat, corn, grow some alfalfa, 100% regenerative, aggressive across the board. Probably for the last four or five years, we've been using AA. I'd say, you know, we're mainly irrigated, but that irrigated irrigation, starting to dwindle. So we're really having to come up with ways to. To make that irrigation effective. One thing, the reason I do rotate, you know, this is really cotton country, so heavy cotton, but I rotate with wheat and corn on the same pivots to divide up that irrigation schedule so we can spread that out further across the year and then utilize water when we're not needing to water other crops to make it go further. But in our area, dry land farmers, you know, maybe one out of six, seven years, they make a crop. And irrigation irrigated farmers, they make one every year. But it seems like it's not a consistent relied upon yield. And with margins being so tight, it's really easy to fall behind for sure.

Yeah, the two of you would really like to have. You would give a lot to have Mike Omeg's water, that's for sure.

Yeah.

So you mentioned the, the three crops that you're growing, Michael. What can you get us a sense of scale and how your rotation divides up?

So on a. On a pivot, you know, 136 acre pivot. To give you an example, if you're watering the whole pivot, you've got maybe three and a half gallons a minute. So if you divide it out into a third. Wheat, corn, cotton. Well, come June, you harvest your wheat and then you can use the full pivot worth of irrigation for two thirds. So then you're getting five and a quarter gallons per minute per acre. And then depending on when you plant your corn, we try to get it to where corn we can pull off mid August. And that's where that cotton really needs that water. And we've got 10 and a half gallons per minute per acre to put on that third. So we can really push that cotton in August when it really needs it. We're irrigating more of the year, but we're able to put out what it needs when we don't get the timely rains, and that's the deals we will get rains, but you know, we may get half of the year's rain in a day and then nothing for two, two months or three months. So really it's, you can't depend on the rain and how we farm. We really farm like it's not going to rain. And then if it gets, if we get a rain, then it's a bonus.

So Michael, you got to. Michael and I had a really good day. What is it now? Almost a year ago, we had a group of 10 or 12 people in the same room that I'm sitting in right now where we, we dug our noses into the literature and into the research on cotton as far as we could go in a day to, to try to figure out how can we make every year a cotton year. Michael, can you tell us what is a cotton year?

Well, cotton year is when it's really unknown whether you're going to have a cotton year until you pull in that field to harvest it. And then once you pull in, you know, and it seems like maybe one out of seven years you actually have a cotton year. But in the years you have a cotton year, it seems like everybody across the area has a cotton year and cotton just makes, it might look the exact same as it did the previous five years, but there's something different there.

So you're doing, you're, you're out there, you're doing yield checks, you have bowl counts, you know, the bowl count breaker. But for some reason, the, the quantity of lint in each bowl, the quantity of lint that comes off the field is much higher than you would expect based on the yield estimates.

Right. You can have, you know, big beautiful plants with a lot of bolls, same bowls. You know, the cotton looks the same and it, you could be a bell difference from, you know, year to year. And you can have a cotton year and have these little shrubs of a plant. You think on a typical year might be a half a bell and you know, it's two and a half bell that cotton is there. It's in those bolls and, and really, you know, when we had Our meeting, it was pretty. What I wanted to get out of that meeting is what makes a cotton year and how do we duplicate that and what goes into actually making cotton? And, and I think putting all that together this year, I feel I had a cotton year. You can talk to all the neighbors around And I'd say 95% of them said it was a horrible year. It was definitely not a cotton ear. So I think we, we've done something and, and I hope we can expand on it and so, and, and, and really narrow down, you know, a program for it.

So what, what did you experience this year, Mike? If, if, or Michael, if, if 95 of your neighbors did not experience a cotton year, that means it wasn't something that you did in the geographic area. So what, what were the crop responses that you got? What was more than you're describing something that was more than the expectation. But what did you see?

Well, to sum up what the year was, you know, we had a really good start, you know, in May. We had timely rains throughout the month of May, not just on one day, we had some early summer rain. So across the board everybody got to the head start, you know, got a good start. Everybody looked the same come August is where it really turned. And we had a horrible August, probably the, one of the hottest August on record. Absolutely no rain. And that followed into September, September was, was really hot with no rain. And that's really where you make your yield is in August. And it doesn't look any different, you know, field to field. But as long as you were set up to take those challenges, then, you know, I was able to benefit because you know, cotton does like the heat, but it also needs that, that water. But I think I was set up in a way from a lot of the things I did this year that it overcame that negative of that August where other guys. August just, just destroyed them.

So what were your, what were your final harvest outcomes, Mike? I haven't talked with our team yet. I don't know what the data is or what the story is of what's been happening.

So my best field, which is what we harvested first, it did a little over 3 bell, 3.3 bell to the acre. I want to say. I think the other two good AEA fields were 2.57 and I think 2.6. So to put that in comparison, some of the guys that harvested first that had some really good drip patches, they were pulling in right at 2 bell, bell and 3 quarter, some a bell and a half. And their cotton looked just as Good as mine, I thought. But it was, you know, a good bell to bell and a half difference.

And for the con, for context, for people who aren't familiar with cotton production, what is your, what is your operating break even perspective? What are your break even yields?

You almost have to do well, it depends on the price of cotton. But current price sitting at 68 cents, you almost need to make three bell to break even. If it's at 80 cents, you could do two and a half bell, two and three quarter, you know, a dollar. Cotton you can get, get, get, you know, away with two bell but it really depends on the price of cotton.

Yeah, I think your, your note on climate resilience and climatic extremes and, and Mike, I'm interested in what you, this is Mike Omeg directed to you and what you've experienced when you reported those, those temperature high over those temperature peaks that you've experienced the last several years. How do you, how do you mitigate against that? How do you manage that in what we can expect to see? I think increasing temperatures and increasing climate vagaries. How do you manage that in a cherry operation?

Well, we're planning in the long run on having warmer temperatures with more, more heat. And that does a lot of things to our crops. It makes our harvest window shorter, which hurts efficiencies because we count on spreading harvest over a longer period of time. But brass tacks are healthy trees resist heat and cold way better than trees that aren't as healthy. And that's all, it's a spectrum. So I don't believe we reach a threshold on plant health of our trees and we're good. I think that there's a increasing benefit at least we haven't seen where we've got our trees to a maximum, where after that point we have diminishing returns on how they resist heat. So number one thing is we want to have big leaves that cover our cherries to provide shade and protection from wind. And the other thing is we want to have trees that are holding fruit that have a lot of, I'll say, good integrity. We want the, the fruit to be physiologically heavy and dense. Those scenarios where tree has good big dense fruit that are covered well by leaves, are wet in our experience resist temperatures extremes better at the same time that that same tree in the wintertime and in the spring. The buds on that tree in our experience are more resistant to frost events as well.

Mike, I was just, I was just going to go there because I've been traveling the last couple weeks. I was the great Lakes Fear and Vegetable Expo. The week before that I was at the ACRES conference. And as I travel to events, I think it has to be in the. One of the top 10 questions I get asked all the time is how do we manage plant nutrition for frost resilience and for freeze resistance. And I, I, every time I hear that question I'm reminded of your experience in when, what is it, 2017 or I forget the exact date when you had that.

20. 2014 and 2014. Yeah. In November of 2014 we went from a low of in the 40s, 43 degrees Fahrenheit, which is pretty warm, to minus 6 below zero. And that's a drastic change. And froze the leaves right on the trees and they turn black.

Yeah. And that, that shift, how rapidly that happened, how many days, how many hours in one day?

In one day it was 43 at my house for the low and then it went down to minus six at my house. Killed roses to the ground. And interestingly enough at that time we were evaluating, we, we had side by side comparisons with an AEA based program and my, my approach, which isn't purely conventional at that time and believe it or not, those orchards were a quarter mile apart. Same elevation, same root stock and variety of tree. And my trees under the OMEG treatment froze to the ground. We had about 6 inches of snow and the tree died back down to there. And that's a bad day. And the trees in the AA area looked like nothing had happened. It was pretty amazing. And they actually picked a crop that following spring. So that, that's a one of the things why I started cheating and quit doing a side by side comparison and just went pretty much all in.

We don't like it when that happens, Mike. We like it when it happens, but we don't like it when that happens.

But yeah, yeah, yeah. And so, you know, I think something that, that in at least in tree fruits and I think probably other woody crops though, those buds are like a little suitcase. When it goes into winter, they aren't going to get anything from the rest of the tree. They only have what they went into winter with. So they only packed their suitcase in late, late summer and fall. And you have to be really sure that they get what they need so that if the going gets tough with cold that they can be hardier than buds that don't have what they need. So I was just out with our AEA agronomist a couple days ago and one of the things I've noticed over time and this is just eyeball spit shooting farmer evaluation is I believe that our buds are much larger on average than they were previous to an AEA approach. And that has two benefits in my opinion. One is just the surface to volume ratio for resisting cold events because oftentimes it's maybe only a period of an hour or two at an extreme temperature and then it warms up. It's not as if it's sub zero for a month. The other thing is that those larger buds have more flowers per bud, which means that our crop potential is higher, which is a benefit. If it's going to get cold and you're going to lose some defrost, you have more to lose, so to speak.

Mike, I know the, the question that I get asked all the time and the question that people will have listening in is how do you do that? How do you manage nutrition to have those large buds and those, those energy filled or nutrient filled buds to give you that freeze protection? What are the important compone components?

You know, I think everyone wants a recipe and it, I'm going to say it depends as a qualifier. But I'll tell you what works. What's worked for me in the school of hard knocks has taught me that we do need to measure. I used to be against measuring. I thought, well if we measure and then go out, you know, we measure with the micrometer and cut with a chainsaw, so to speak. But one of the things that I've seen is that we've been able to increase the resilience of our trees and our crops and our fruit by quite a bit by using SAP analysis. And so by targeting certain nutrients. There's not just one key nutrient that I can say we're up your copper and your golden. I don't think that's the case. I think it's an overall approach of ensuring that you don't have severe up your copper and your golden. I don't think that's the case. I think it's an overall approach of ensuring, ensuring that you don't have severe deficit.