Des Moines Register
09-10-06
Aging landowners brighten future for farm management
'It's going to be a growth industry,' says an ISU Extension economist
By JERRY PERKINS
REGISTER FARM EDITOR
Nevada, Ia. - It has been 60 years since Carl Hertz opened the doors of what
was to become Hertz Farm Management Inc. Corn yields averaged 37 bushels
an acre in 1946, a far cry from the 200 bushels an acre that many Iowa farmers
now harvest routinely.
More than corn yields have changed.
Every year, more of the state's farmland is owned by older people who tend to
live outside the state.
Those older, out-of-state landowners either can't - or don't want - to farm the land
themselves. If they don't have relatives or acquaintances to rent the land to, they
can turn to professional farm management companies like Hertz to make their
crop and marketing decisions.
More than half - 54 percent - of Iowa's 33 million acres of cropland, or 17.8
million acres, is leased or rented out to others, said Iowa State University
Extension economist Michael Duffy. Of that leased land, 6 percent, or more
than a million acres, is operated by professional farm managers, Duffy said.
With the prevailing trend toward older and more distant farmland ownership, the
future looks bright for farm managers.
"It's going to be a growth industry," Duffy said. "The demographics of land
ownership really bode well."
Carl Hertz, who died last year at age 92, built his business into the largest Iowabased farm management company with 14 offices and 100 employees.
Hertz Farm Management manages 1,850 farms covering 450,000 acres from
Indiana to Colorado and even one farm in Brazil. More than half of the farmland
Hertz manages is in Iowa, Illinois and Indiana.
"Our fit has really been in the farm belt," said Randy Hertz, one of three of Carl's
sons who work in the business. The largest percentage of Hertz revenue comes
from its farm management business, but the company also does real estate
sales, farm acquisitions and land and commercial appraisals.
The key to managing 1,850 farms, Hertz said, is anticipating the needs of the
clients.
L.G. "Spike" and Doris Speckeen have been Hertz clients since they moved to
Nevada in 1963 and started a grain bin construction company.
Speckeen started selling grain bins to Hertz clients and then became a client
himself.
"It has been a very fine association," said Speckeen, who divides his time
between Iowa and Florida. "We're absentee owners and, while I worked on farms
during the Depression, I wasn't a farmer. We depended on them for expertise."
Doris Speckeen said she has appreciated the farm records Hertz provides.
"I'm a stickler for bookkeeping," she said. "That's what I did in our business and,
with Hertz farm records, I can track each farm and see how profitable each farm
is."
Lowell Batson, a retired engineer at Rockwell Collins in Cedar Rapids, said he
bought a farm through Hertz Real Estate Services more than 20 years ago and
has been doing business with them ever since.
"One thing Carl put great emphasis on was continuing education for the farm
managers, and I've depended on that expertise," Batson said. Omaha-based
Farmers National Co., the largest farm management company in the United
States, is Hertz's biggest competitor.
Jim Farrell, president of Farmers National and an Iowa native, said Hertz has
always been a well-operated company.
"That's their legacy from Carl Hertz," Farrell said. "They have high standards and
represent their clients well."
Loyd Brown, president of Hertz Farm Management since 2000, said technology
is changing the way the company does business.
Yield monitors and Global Positioning Systems, more sophisticated farm
implements and more efficient herbicides have all made farming more productive
and complex. The Internet has put information at the fingertips of farm managers
and clients, Brown said.
Tom Hertz, another son of Carl who is part of the business, said that cell phones
have made marketing a crop easier and more profitable.
"We can pull the trigger almost immediately when the market is up," he said.
Digital cameras are carried by all Hertz farm managers so they can photograph
growing crops or any crop problems and e-mail them to clients.
The improved genetics of today's corn and soybeans also are changing the way
farms are run.
One condition that hasn't changed much is the importance of the government
farm program.
Iowa State's Duffy said that in the past 10 years, government payments have
contributed more than half of U.S. farm income.
Randy Hertz said that a professional manager's knowledge of the farm program
can add to a client's bottom line.
"The farm program is so complicated that landowners can get confused," Hertz
said. "They're leaving money on the table every year."
Farm Editor Jerry Perkins can be reached at (515) 284-8456 or
jperkins@dmreg.com