00:00 Reverting back to some dry fertility inventory management and looking at last year 00:00:03 and realizing I'm not gonna make any big adjustments because of it. That's what Kevin Matthews tells me are his changes 00:00:08 for 2025 coming up in this episode of Extreme Ag Cutting the Curve. Welcome to Extreme Ag Cutting the Curve podcast 00:00:15 where real farmers share real insights and real results to help you improve your farming operation. And now here's your host, Damien Mason. 00:00:26 Hey there. Welcome to another fantastic episode of Extreme Ask Kevin, the curve. We got Kevin Matthews on here, one of the original founders 00:00:30 of Extreme Ag, and we're talking about 20, 25 changes you're going to make on your farming operation based on 2024, 00:00:36 or just based on economic need or on how to do things better. We're always about trying to change 00:00:41 things up here at extreme Ag. That's why we produce all these videos, hundreds and hundreds of videos from them in the field, 00:00:46 from right here at cutting the curve to help you farm better. And I asked all the guys, 00:00:50 how are you gonna change things up in 2025? And Kevin gave me a few points. One, you tried to go all liquid on fertility 00:00:57 and you decided, you know what? I think there's some advantage to using some dry fertility, especially if I can incorporate it into a strip 00:01:04 till plan. Talk to me. Yeah, so we religiously in, you know, in our area in the south we spread a lot of dap pot ash, um, 00:01:14 some people have Amon native products, get it combined all into one, uh, granular, which works great, but the cost of that, 00:01:21 it got out astronomical. And we have been able to basically spoon feed the plants. So a liquid diet and it works really well, 00:01:28 especially on land that we might be losing to concrete. Um, but that works really well. But we're continuously, we have moved our yield levels up 00:01:36 to the point, especially soybeans. We're continuously, uh, getting, we're just, we're running low on potassium 00:01:44 and so we're seeing it go down a little bit in our soils where we're pulling these big bigger yields off. 00:01:50 And ideally the most economical way to go with some dry fertility to get the extra components that along. 00:01:58 Mainly focusing on, uh, phosphorus and potassium with potassium being number one nutrient. Damien is doing that in a strip till formation 00:02:06 where I can really cut that rate back, but without the equipment, we're on 22 inch rows. So that brings another challenge is 00:02:12 that equipment's not readily available for our corn and our soybeans 20 inch soybeans, it's not as popular. So we may have to broadcast some this year, 00:02:23 but we realize when we go to broadcast it that instead of putting 50 pounds out, we're probably gonna have to put 120 or something. 00:02:29 So it's, we're gonna have a lot more cost in it, but, uh, we know we need to add just a little bit more because we're starting 00:02:36 to see some deficiencies along the way. So we don't like, I mean we've covered this whole bunch from, uh, Chad talking about how he's, uh, 00:02:44 spoon fed along crops for seven years because every year the owner of the field says this might be a 00:02:50 warehouse, uh, for development. So he had been successful with that. We've talked about autonomy, we've talked about 00:02:55 with the folks at Agro Liquid about you can go to, uh, all liquid, uh, fertility program, but you've got some deficiencies. 00:03:02 You're saying that the dry fertility is coming back in, but it only really works if you can get it done on a strip till because you're gonna fling out two to two 00:03:11 and a half times as much if you broadcast it and it's not really gonna do anything other than eventually end up in a watershed and not end up in your crops. 00:03:16 And that's not what you want for environmental or in 2025 economic reasons. Yeah, I mean you can't afford to do that. 00:03:23 Um, the strip till is the absolute safest, best method for our pocketbook and our environment and that's what we wanna do. 00:03:31 Um, the liquid diet works absolutely great, but we just, we just need a little bit more in there. And the problem is, I, on the liquid side, I, I'm, 00:03:41 I'm toting quite a bit of stuff and I gotta get over some acres. I can't just stop and fill up every 20 acres. 00:03:46 I, I need to get at least 50 plus acres on the planter fill up. So, by the way, so the driver facilit 00:03:50 is one of the big changes you're gonna make. You just told us and I asked, why'd you, what compelled you to make this change is 'cause you've got some deficiencies. 00:03:56 It only works if you can get the strip till. So that means you're on the hunt right now. We're recording this middle of January. 00:04:00 You're on the hunt between now and about sometime in April to get equipment bought. That is correct. We're looking for a strip till dig now 00:04:07 and our dealer's actually pricing us one out, see if it's gonna be available and, and if it's not available, Damien, 00:04:13 we're just gonna pick only the troubled fields that we are saw samples throughout the season and we'll go and broadcast some there. 00:04:19 It will not be a blanket approach because our liquid does such a great job, we don't really need it. 00:04:24 Okay. Uh, I asked a question. Could any of this backfire? Probably not. 00:04:30 Well, that depends on what kind of job the guy with the spreader truck or the strip till rig does. If it's not, if we don't get it out. Right. 00:04:38 But you know, we uh, we have used, um, we've got multiple years now, two years that we've used the, um, um, Callie, Damien, I'm forgetting the name of it. 00:04:50 Um, auto Path, is that right? Auto Auto Path. Auto Path. Yeah. Auto Path. Alright, so we'll start. 00:04:57 Alright, so Damien, for the last two years we've used the auto path from John Deere on our equipment 00:05:03 and that has been, um, really amazing how our planter and combine follow each other from those original tracks. 00:05:12 So being able to do a strip deal with those planters, I hope is going to keep it from backfiring on me because of that technology that John Deere's give us. 00:05:21 Yeah. Is is made the ability for that just to be dead on. So by the way, a question a person 00:05:26 that might be answering is saying, okay, I appreciate the reason you're making the changes. 'cause fertility deficiencies, 00:05:31 you wanna get better yield all that and you're, it's always willing to change up things. But there's gonna be somebody that says, 00:05:36 if you gotta buy a bunch of new strip till equipment, are you actually money ahead? Uh, I think after about four years it'll be, 00:05:44 it'll be paid in full and it may actually be quicker than that. And that's just, that's just on the fertilized savings. 00:05:50 That's not talking about the yield benefit. Okay. But, uh, Yeah. Okay. So you 00:05:55 can do that. All right. Number two, change you're making, you're going to do a better job. 00:05:59 Inventory management, you're not talking about inventory of grain, obviously you're good about all that. 00:06:03 Marketing, you used to run a grain elevator and used to bar used to market and sell stuff for other people. 00:06:08 It's not about inventory of grain, it's not even about inventory of, uh, of big ticket items like your farm machinery. 00:06:14 It's stuff that's been sitting around in the back of the corner of sheds or uh, consumables, like filters. What's going on? What's, uh, what, 00:06:21 what changes are you making there and what compelled you to make the change? Yeah, so for years 00:06:28 I've seen the guys in the warehouse on their crop input side or chemicals, pesticides, herbicides, insecticides, uh, 00:06:36 foliar fertilizer. They go in there and the shuttle gets put behind a shuttle or a box gets put in the corner 00:06:42 and you, next thing you know, you go, oh, we gotta have more. And we go order more. And then in the end 00:06:46 of the year you do your inventory and you're sitting there and you got a hundred thousand dollars worth of products 00:06:51 that you bought an extra a hundred thousand that you didn't need because you had it in the back. And so the little things is what bites us. 00:06:58 We do continuing ed classes every January. Dan, I didn't get to go this year. Jan, Danielle and Sandy went. 00:07:05 And uh, that was one of the things that we looked at in advanced marketing and um, you know, business class is we gotta look at, 00:07:13 you know, uh, just to service our new class, combine the filters and lubricants alone. No labor, $1,722. Okay. 00:07:23 So you take all the equipment we own, which is a, well, you know, farmers has got a lot of equipment. We got a lot 00:07:30 Right, right. To service those. Typically we spend about 29 to $30,000, sometimes $32,000 a year on filters. 00:07:40 So we went in, we cleaned, I have two shops, we cleaned them both. We've been cleaning both of them up still in progress. 00:07:47 We had shelves that had stuff in at my dad's shop. They was grading equipment, brand new muffs for bulldozers, everything you could imagine on these shelves. 00:07:55 And all of our stuff is sitting over there in the floor in pallet boxes. So we've cleaned up, we're putting stuff on Facebook 00:08:01 and we ain't u we've not used this stuff in 20 years. We've not used some of it 50 years. Yeah. It's not gonna get used. It's getting gone dam. 00:08:08 And we're cleaning up right now. We're organizing everything. When you walk in our shop, 00:08:13 all the filters are sitting there. It's got written on the filters what piece of equipment they go with. 00:08:19 And Eddie's working on the order right now. And that $29,000 filter order that we normally get every year, 00:08:26 it's looking like it's gonna be somewhere around three or $4,000 this year. 'cause we've already got it. We don't need to order more. 00:08:33 That's not, I mean, in this economy we gotta look at the little things Damien 00:08:38 Know. What I like about that is, uh, first off you can say in the scope of things is kinda like looking around your office, I don't know, uh, 00:08:45 paper clips or uh, printer paper, whatever. Like, okay, big damn deal, it's five bucks. But the thing is, on a farming operation, like you said, 00:08:52 you start putting a pallet of, uh, filters and the pallet of this and this and this and this. You can get to 30, 40, $50,000 pretty quickly 00:08:59 and if it, it doesn't make you any money sitting there. And also if you have an operating note now at 7%, seven 5%, it's real money. 00:09:10 Yeah. It's real money. And, you know, displays for our planters, you know, we always keep planning because, 00:09:17 and people say, well why do you go through so many displays and our soils, they're so abrasive 00:09:22 that if we hit a real dry planting period, it will flat eat 'em up and you might go through two or three sets and a planting season. 00:09:30 And lo and behold, you know, we're counting our displays up. And and Eddie was talking to me yesterday 00:09:35 and he's, he said, Kevin, he said, I don't think we need to order, but maybe one or two sets. 00:09:40 We always get, um, we get six, we get six sets, we have three planters, we get two sets per planter, and now we're only going to need maybe two sets. 00:09:50 That's a bunch of money. Damien A lot of inventory by the way, I always like the story that when we move into a situation where you say, okay, 00:09:56 you use some operating money and I'm sure that someone listening says, well, operating money isn't for stuff that's in inventory. 00:10:02 And I'd say, well, money is fungible, whether it's money that's over here, over here, it's all the 00:10:06 same money for the operation. So if you were obligating 8% operating money on a hundred thousand dollars worth of this excess inventory that's 80, 00:10:14 you know, that's, that's a lot of money. Right? That's 8,000, That's 8,000 bucks. I'd prefer to have $8,000 in my pocket 00:10:20 and do something fun with it versus not. Um, the question, how could any of this backfire? Somebody's gonna say, yeah, but what if you get 00:10:29 to May when it's go time and you need those parts and all of a sudden they're out and you're down for a couple days. 00:10:36 That's the question that someone's gonna ask me. Yep. I'd rather, I'd rather have the excess inventory of stuff, parts, whatever. 00:10:42 That way I'm not held up for four days waiting. Yep. I totally agree. And another thing, Damien, is the cost 00:10:49 of getting these products to you next day. Let's say you need that part next day. Yep. And that is one thing we are looking at is in, 00:10:56 is last year we had some, uh, harvest parts that we had typically kept in stock, but we just kind of got laid back 00:11:06 and didn't realize we was low on that inventory. Yeah. We spent about $6,000 on shipping to get it the next day that we shouldn't have spent. 00:11:15 We should have had that. Now there's going to be things you absolutely are not going foresee breaking down. 00:11:19 Yeah. But you really need a well-planned, uh, budget. A well-planned execution is very important in minimizing those little things. 00:11:30 So, so I just mentioned $5,000, then you got $8,000 in interest. So, you know, we're at, um, you know, 00:11:38 we're at $13,000 right there in savings. Yeah. And you can save it in this business a whole lot quicker. 00:11:45 And you can make it now you can save yourself broke too. Yeah. Well th $13,000 is, you know, I get it in a, when 00:11:53 as much money goes out the door on a major farming operation, it doesn't sound like much, but that's net. That's $13,000 in your pocket. It's not 13,000. Yeah. 00:12:01 Hey, by the way, I wanna hear your last thing, which is about, uh, seasonal. Um, before I do that, I wanna remind our listeners 00:12:07 that Nature's is one of our business partners here at Extreme Ag. We love working with them. Yeah. 00:12:10 Nature's a focus on providing sustainable farming solutions and helping you, uh, get big yields 00:12:15 and also, uh, keep things moving on for your next generation of agriculture using high quality, 00:12:20 highly quality liquid fertilizers. Powered by nature is by, okay. You can target specific periods 00:12:24 of influence throughout the growing season via precision placement techniques as a means to mitigate plant stress 00:12:29 and enhanced crop yields and boost your farms return on investment. As we're here now just talking about money, money, money. 00:12:34 Now's the time to make sure that you are maximizing your fertility spend. You can do with nature's. So the one thing about that, uh, 00:12:40 you also talk about old crap. Every farm that you've ever been on has stuff that's sitting around and it is inventory. 00:12:46 You can say, well it's fully depreciated out. Well, not really. Uh, maybe it was, but the point is you didn't have a need for it. 00:12:51 You got parts for a tractor you traded off two years ago. Why the hell are you sitting on this? 00:12:55 So I think that's the other one. Maybe it's the time. Here we are, it's the beginning, middle of January. Look at inventory that you're like, well yeah, 00:13:03 it's been over there for three years. We'll turn it into cash. It doesn't need to be. Yeah. And even if it's, you're getting 20 cents on the 00:13:10 dollar, you're getting rid of it. 'cause it's something that you, you just talked about a muffler from a machine that you haven't had on a farm 00:13:15 for several decades. Yeah. And that, and we looked it up as a John Deere eight 50 C bulldozer, 00:13:21 which is not that old a machine. Um, dad and them had several of them. That buffer today is almost $1,300 00:13:28 and we put it on, uh, Facebook for 600 bucks and it's brand, it's brand new, you know, so I'd a whole lot rather have the $600 than 00:13:37 that thing sitting there collecting dust. All Right. The last thing, They better not make me a good offer. 00:13:41 I'd take it on. I I agree with you. I've never sold anything on Facebook, so you're actually inspiring me. 00:13:46 Alright, so last thing is I said, are you make any big changes based on any trials or experiments that you did in 2024? 00:13:52 And you said, this is not the year because 2024 was a bad year and you've got some takeaways from that. So what are they? 00:13:58 Yeah, no question. 2024 was a terrible year. And, um, one thing to think about is when the east coast, when we have, uh, a severe drought, like what we've had, 00:14:08 if you look over the last a hundred years, that's followed in the Midwest and that's what is not looking too good 00:14:15 for the heat and the drought there. So how did we survive it? What would I recommend for somebody that's gonna face a year 00:14:21 that you're not gonna learn much from, um, the, the little things spreading out, not doing everything at one time, 00:14:28 putting all your eggs out at one time, keeping some of 'em in the basket hand, deliver 'em a little bit into the field. 00:14:34 What I'm talking about is spreading the fertility out using more foliar, fertilized, uh, spreading your fungicides out. 00:14:42 We was able, when we seen the crop was not going to make it. There was no rain. It absolutely, it didn't matter 00:14:47 what you spend, it wasn't gonna fix it. We quit spending money. We also, we started sending guys home 4 35 o'clock in the afternoon. 00:14:54 If it was a real hot day and we had a bunch of 'em up in a hundred, we'd send 'em home at two o'clock in the afternoon. 00:15:00 We cut the labor back, we pumped the brakes as we say it, it saved us a lot of money. 00:15:05 And, um, it's looking like, um, especially with the aid coming the from the USDA, I don't like getting it from the mailbox, 00:15:14 but bottom line is between that and my crop insurance, we're probably going to, we're gonna be close to net 00:15:20 and even in a historically terrible year in the state of North Carolina. So that is, um, I don't wanna, what I learned from 00:15:30 that is all the things that we do in extreme ag to mitigate stress and handle stress and, and create a safe environment pays dividends in good years 00:15:41 and it saves your button bad years. So that, that is the big takeaway right there, is keep yourself in a position that you can make a change. 00:15:52 I think we'll leave it right there, by the way. So I think it's cool that you're, uh, you're, you're also putting a warning out there 00:15:58 to the people in the Midwest saying what happened to North Carolina comes to you the following year. You know, you might be right because I've sat on two 00:16:05 different prisoners in the last year that said that 2025 was gonna be a, uh, a hot and dry in the, uh, basic corn belt. 00:16:13 Yep. Yep. That's what it's, that's what we're hearing. But only the good lord knows. All right, he's talking about taking back dry fertil, 00:16:20 putting dry fertility back into the mix and uh, changing out some equipment. He's got a little bit of a challenge 00:16:24 because he does 22 inch rows on corn and 20 inch rows on soybeans. But he is gonna get strip till. 00:16:31 He is gonna be able to make strip till. We'll revisit that topic after he uses it this, uh, spring and summer and find out how it works. 00:16:37 That's what we like as we always keep you posted about those changes that we're making. Liquidating, old unproductive stuff that's laying 00:16:42 around the farm, basically managing your inventory. It's a change that Kevin's gonna make for the bottom line and you should probably consider making the same thing. 00:16:48 Uh, after you listen to this, you can go out and walk around and say, why the hell do I have that? 00:16:51 And, you know, and then you can learn to sell and then no big changes based on a year. That was a disaster other than learn from it. 00:16:58 He's Kevin Matthews, that's it from him. Uh, big changes, small changes in 2025, what changes are you making? 00:17:03 And, uh, if you need inspiration, go and check out all the stuff. Here at Extreme Ag Farm. 00:17:07 We've got hundreds of videos, uh, from the guys out in the field. We've got hundreds and hundreds 00:17:11 of episodes of cutting the curve. And we also have, uh, so much more you can learn from like our monthly webinars. Uh, so tune into all that. 00:17:17 So next time, thanks for being here, Kevin. Thank you. I'm here. I appreciate the next time. I'm Dave Mason with Extreme Ag Cutting the Curve. 00:17:25 That's a wrap for this episode of Cutting the Curve. Make sure to check out Extreme ag.farm for more great content to help you squeeze more profit out 456 00:17:33.515 --> 00:17:34.675