View all past Braintrust Ag newsletters here.

Edition #39

June 1, 2024

Good morning and welcome to the Braintrust Ag newsletter. Where we support farmers, ranchers, and ag business owners who conquer challenges to feed the world.

2 notes to begin:

• I recently found out that members can get paid to recruit & refer new members! I put a flyer together that describes this opportunity:

• A couple people have asked about hosting their own topic-specific meet ups for members. YES! That is what I hope this peer group community grows into. The community platform ⬇ has all those capabilities. Just reach out and I’ll get you started.

www.braintrustag.com/community

Alright, let’s get to the topics that will help you build a strong, sustainable ag operation.

-Clint

Here’s what we have this week:

• 🤠 H-2A Workers

• 🌱 Seeds

• 👷‍♂️ Surveyors

• 📅 Happenings

• 💸 Debt Thoughts

• 🤝 Aligning Incentives

• and more…

THE BIG IDEA

BA Pro Manager Series

#6.1: How to Hire an H-2A Worker

Our last installment highlighted strategies for solving the all-too-evident ag labor issues. A number of people reached out after that newsletter wanting to know more about how to hire H-2A workers. My understanding is many people use a hiring agency who takes care of all the paperwork, recruitment, and compliance matters for the farmer. For a fee of course.

But, if you want to tackle the process on your own (or start your own agency helping farmers/ranchers source H-2A labor) I thought it would be valuable to dive into what it takes to hire a visa employee. So, before we keep moving forward with the BA Pro Manager Series, we’ll spend this edition on H-2A workers.

In an effort to keep the word count manageable, I’m trying something new… below is a snippet of the full article. Click below to access the full piece.

To assist with the hiring process, I’ve put together a comprehensive checklist to guide you through the H-2A visa process, ensuring you meet all requirements and deadlines to hire seasonal ag workers.

SEEDS

• 🤖 Operator Free: AGCO just announced they are hitting the market with an autonomous retrofit kit for tractors. The claim is farmers don’t have to wait for fully autonomous tractors to be manufactured, they are able install this kit on existing tractors and have full autonomy today.

• 💲 Loan Basics: Sometimes we assume or just skip over the basics, and when borrowing large sums of money that’s not a good idea. UNL put together this easy-to-read publication on the basics of loans for agriculture. It’s a good learning tool for beginners or refresher for those seasoned vets.

• 💀 Estate Taxes: 2026 will be here before you know it. Why should you care? Because that’s when the currently doubled exemption amount for “death taxes” gets cut back in half. Here’s more on what that could look like.

• 🥛 Dairy: The dairy industry is experiencing challenges and changes like all other aspects of ag. The 2024 Farm Journal’s State of the Dairy Industry report had some key takeaways on various topics such as adopting technology, succession planning, and diversifying to dairy-on-beef that sheds some light on the status of US dairy producers.

• ⚖ Farm Bill: After much delay, the House Agriculture Committee approved a draft of what is called the most expensive farm bill in the country’s history. The draft will now be sent to the full House for approval at a later date.

• 🏐 For Fun: Head VB coach for the University of Nebraska, John Cook, signed a 5-year, $4.1 million contract extension. What’s notable about this isn’t the number… it’s that he included the purchase of a horse from the Pitzer Ranch in Ericson, NE as part of his negotiations.

RURAL OPPORTUNITIES

A need (and great opportunity for young people) in rural parts:

Land Surveyors

→ Average age is 53 yrs old

→ 2 year degree (many companies will cover tuition)

→ 3 year paid apprenticeship

→ Up to six figures salary

It’s not back-breaking work.

Blend of physical & computer work... get to be outside when weather’s good, get to be in-office when it’s gross out.

Plus, flexible hours to farm on the side if you’d like to.

Become a member today for lifetime access to everything. It’s a small one-time cost with NO recurring subscription.

PEER GROUP HAPPENINGS

A couple mentions on what Braintrust Ag members are up to:

1) Upcoming Zoom member meet-up; Topic - “Leases”

Join us for an insightful Zoom call with other members as we explore different types of leases, including cash rent, crop share, and flex rent, and discuss strategies for approaching potential landlords and managing leases effectively.

Click the image above for the link.

2) A member posted these helpful resources after our recent SOIL Gathering on “Mental Fitness”

DEBT THOUGHTS

I'm generally opposed to debt.

Unless it's 'smart debt' on appreciating assets.

An example of ‘smart debt’ would be a reasonable mortgage on land. What would make it reasonable? Making sure the total debt secured by the land is below the value of the land. Making sure the repayment schedule results in payment amounts that are either supported by the cash flow off the land or are subsidized in a comfortable way. Basically, a conservative approach to borrowing money on asset that go up in value.

I'm VERY opposed to co-signing or guaranteeing someone else's debt.

Here’s an example of why:

→ Farmer pledged a quarter of his ground as collateral for his dad's farm loans.

Fast forward 10 years & dad can't pay. Bank's calling all the loans. Remember, Dad’s loans are secured by Son’s farmland.

Dad's threatening bankruptcy & the bank is trying to foreclose on all mortgages.

Son may be forced to sell his land to satisfy Dad's delinquent debt.

Add in years of a strained relationship... it's a mess.

The court will have to sort it out.

But, this could have been avoided by Son saying "no thanks" when asked to mortgage his property for the benefit of someone else.

So, regardless your risk tolerance or comfort level of debt, I’m just against being on the hook for someone else’s payments.

And to the argument that it’s the only way to get a young person started, I disagree. I’m thankful to work with many young ag people who got a start through creativity, finding various programs, building solid relationships, and not through a relative co-signing a loan.

Maybe consider how Thanksgiving dinner will taste when you’re sitting around the table with people you’re beholden to… versus knowing there’s not the strain of debt payments impacting that family relationship.

If you get value from these newsletters, consider joining 250+ other ag people and become a member of Braintrust Ag. Your support makes this content possible.

ALIGN INCENTIVES

“Work hard and someday all this will be yours.”

“If you put in the hours & effort, your bonus will reflect that.”

“If you help make this business money, I’ll keep that in mind come raise time.”

“Keep showing up & adding value. In a few years you’ll own a piece of this business.”

What do all these have in common?

They’re vague promises, not specific incentives to motivate workers.

I’ve been an employer, employee, and business partner.

I am, and most businesses I’ve worked with are, poor at aligning true incentives with the value team members bring to the table. The vague promises might work for a while, but the problem is what’s in my head and your head are never 100% the same.

Even if some version of a promise comes true, because we didn’t realize our expectations (valid or not), we tend to feel we got the short end of the stick.

Then resentment grows.

Then the employee leaves for greener pastures; or the business partner checks out.

And we wonder why.

And frankly blame it on nobody wanting to work as hard, or as smart, as us. But it was preventable.

Here’s how those first four promises could actually be useful incentives…

“Here’s the current equity in our operation, and here’s the projections. As part of my transition plan, I’ve spelled out how to transfer ownership to you in this Memo of Understanding we’ll both sign.”

“Your bonus will be 50% of every dollar of net profit we make over 125% of last year’s numbers.”

“Your raise will be based on 25% of the direct revenue you bring in.”

“Here’s our employee ownership plan. Each year you’ll be allowed to buy 1,000 shares at 75% of the FMV.”

It takes some work & creativity, but it’s not impossible for any job or partnership to have clear incentives.

They ought to be clear, measurable, and in writing.

MEME OF THE WEEK

That’s a wrap, folks.

Until next week, thank you to everyone involved in ag.

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DISCLAIMER: All content, communications, and resources provided by Braintrust Ag, its principals, operators, or members is intended to merely be educational and entertaining. Nothing published by Braintrust Ag should be relied on as legal, financial, investment, or other professional advice. Investments and legal matters involve substantial risk and are not suitable for all individuals. It is recommended to enter into a client relationship with an ESP for obtaining professional advice.