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Machinery and Labor Sharing: A Risk Management Tool for Small and Medium-Sized Farmers

Machinery and Labor Sharing: A Risk Management Tool for Small and Medium-Sized Farmers. William Edwards and Georgeanne Artz. Sponsors. North Central Risk Management Agency Leopold Center for Sustainable Agriculture Iowa State University Extension University of Missouri Extension.

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Machinery and Labor Sharing: A Risk Management Tool for Small and Medium-Sized Farmers

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  1. Machinery and Labor Sharing:A Risk Management Tool for Small and Medium-Sized Farmers William Edwards and Georgeanne Artz

  2. Sponsors North Central Risk Management Agency Leopold Center for Sustainable Agriculture Iowa State University Extension University of Missouri Extension

  3. Project Overview • Combined research and outreach program • Research: 10 case studies • Funded by Leopold Center for Sustainable Agriculture and USDA Rural Cooperative Business Development grants • Outreach: Educational Materials and Producer Workshops • Funded by NCRME, Leopold Center and USDA RCBD monies

  4. Workshop Team Georgeanne Artz gartz@iastate.edu William Edwards wedwards@iastate.edu Roger Ginder ginder@iastate.edu Frayne Olson frayne.olson@ndsu Kevin Hansen hansenk@missouri.edu Darren Jarboe jarboe@iastate.edu Jim Jensen jensenjh@iastate.edu Kelvin Leibold kleibold@iastate.edu Ray Massey masseyr@missouri.edu Tom Olson tolsen@iastate.edu Wayne Prewitt prewittw@missouri.edu

  5. Corn husking bees Threshing crews in the early 1900s Hay crews Joint harvesting Hutterites and other communal groups History of Equipment Sharing

  6. Advantages of Sharing • Greater annual use of large machines • More efficient use of labor during peak seasons • More dependable than hired labor • Fields more spread out—fewer weather delays • Opportunity to do custom work

  7. Advantages of Sharing • Specialization of labor • Backup labor available • More efficient use of repair tools and facilities • Volume discounts on input purchases • Two (or more) heads are better than one!

  8. Delivery • Workshops in Iowa and Missouri • Published manual through Midwest Plan Service • Ag Decision Maker fact sheets and tools • Article in JAAE (Nov. 2010) • Popular press articles

  9. Workshop Brochure

  10. Workshop Format • Five hours (10 am to 3 pm) • Schedule • Case study activity (small groups, interactive) • Operational issues (presentation, short exercise) • Lunch • Choosing partners activity (small groups) • Organizational issues (presentation)

  11. Case Studies • Ten focus groups in Iowa, Illinois, Nebraska, Saskatchewan • Typical scenarios: • Combine sharing • Machinery and labor sharing • Total sharing (inputs to marketing)

  12. Case Study Questions • How did the arrangement begin? • What were they sharing? • Was the arrangement successful? • What problems did they have to address? Select a “Spokesperson” and “Recorder” to report back to the whole group.

  13. Getting started Recordkeeping and cost accounting Equal ownership and use Unequal ownership and use Full machinery line and labor sharing Income tax considerations Work scheduling Operational Issues

  14. Choosing Partners Purpose: to get producers to think about the importance of personal traits and skills needed to make sharing work. Activity: Break into groups and have them select characteristics that they think would make a sharing agreement successful.

  15. Grain or livestock Acres Types of soils Size of equipment Shop facilities Proximity of land base Financial stability Farm Characteristics

  16. Early riser or night owl? Steady pace Sundays off? Work alone or in a team? Fix it quick or fix it right? Punctual Work Habits

  17. Mechanical and repair, welding Record keeping Operating harvester, sprayer Commercial driver’s license Computer skills Commercial pesticide applicator license Unique Skills

  18. Planner Flexibility Problem solver Creative Independent Diplomat Personality Traits

  19. Simple joint ownership Informal operating agreement Legal organizational choices Written agreement and by-laws Business plan Entry and exit strategies Organizational Issues

  20. Post workshop evaluations (76 completed) Six month follow-up (37 completed) Program Evaluations

  21. Workshop Evaluation After participating in this workshop, how likely are you to take the following actions:

  22. Six Month Follow-up Note: Columns don’t add to 100% - N/A column omitted

  23. How many $ have you saved in the past year as a result of sharing machinery and/or labor? Mean = $7,162 Six Month Follow-up Note: Columns don’t add to 100% - N/A column omitted

  24. Intergenerational transfer Fruit and vegetable, specialty crop growers Dedicated energy crops (establishment and harvesting equipment) Current & Future Directions

  25. Questions and Comments

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