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Rick Rosentreter lost groundto a gung-ho competitor eightyears ago and it changed theway he farmed.

Real Estate / By Pam Henderson

Rick Rosentreter is used tothe stony stares. He knowsthat he’s controversial.Neighbors blame him forpushing cash rents higher.

Ironically, it was being outbid by $30per acre on a tract of land eight yearsago that Rosentreter considers the piv-otal moment in his survival as a farmer.

“It was a wake up call that my dadand I had to change the way we didbusiness or be run over,” he says.

In his crash course for self improve-ment, Rosentreter has done morethan survive. Since 1998, the 37-year-old Carlinville, Ill., farmer has grownhis farming enterprise from 2,000acres to nearly 8,000 acres, virtuallyall of it in corn. He has done it with-out owning an acre and while payingcash rents that leave some establishedfarmers gasping.

How does he do it? Fine-tuned costanalysis, detailed marketing, plusminimizing the middlemen on inputsand grain hauling have allowed himto prosper in spite of the naysayers.For his ability to develop a solid busi-ness management plan and grow inone of the most cost competitivefarming areas of the U.S., Rosentreter

Fine-tuning hismargins helped ayoung farmer afford top rates

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was named a national finalistfor the 2006 Top Producer ofthe Year award.

Gary Graham, vice presi-dent and senior loan officerat the Carlinville NationalBank, notes that he has workedwith hundreds of farmersover the years and ranksRosentreter in the top percentof those he has encountered.

“From a lender’s viewpoint,what sets Rick apart are hismarketing abilities. The aver-age price he receives for grainis well above what we typicallysee,” says Graham. “He alsohas a unique knack for man-aging costs and cantell you how muchit costs to grow cornper acre, per bushel,per implement. Hehas mapped out tothe minute when itwill pay to replace atruck or even a field cultivator.He never makes a move with-out first making sure it is go-ing to make him money.”

Bidding wars. Aggressivefarmers are nothing new tothis southwestern region ofIllinois, which is often re-ferred to as “Racehorse Flats,”a moniker that reflects boththe area’s competitive land cli-mate and the spirited rush tobe first to the field each spring.

Home to severallarge farm opera-tors, $200 per acrecash rents are not un-common on the area’sflat, black, highly pro-ductive ground. Someparcels have beenknown to flirt with$250 per acre. Terms also be-come tactics—some farmers offerto pay landlords upfront before the sea-son starts or to pay for lime or other im-provements.

Bob Lloyd shopped for a tenant be-fore he rented his 683-acre family farmlocated near Girard, Ill., to Rosentreter.Lloyd admits he was picky—he had

farmed the land himself for20 years and earned a degreein agricultural economicsfrom the University of Illi-nois. “Rick presented mewith a detailed businessplan that was professional,and that impressed me,”

says Lloyd. “My contract stipulatesthat soil fertility will be maintained,and Rick gives me a yearly statementafter grid sampling to back this up.”

Rosentreter started farming whileworking full time as farm manager atthe local bank in 1991. By 1998, he andhis father, Gerald, were operating closeto 2,000 rental acres with one full-timeemployee when they lost the rent bidthat “made us realize the word ‘tenant’does not mean entitled in a consolidat-ing industry,” says Rick.

Rosentreter changed tillage systems

and started digging intoevery figure—examin-ing every aspect of theirfarming operation. Atthe same time, he madethe commitment tofarm full time and hisfather, who was experi-encing health prob-lems, gracefully agreedto step aside. “My Dadwas a good farmer, butlike a lot of good farm-ers, he had lost his com-petitive edge. We didn’t

even have a marketingplan,” he recalls.

Armed with his own com-puter skills, Rosentreterbuilt a personalized croprevenue and expense pro-file. He tracks everythingfrom fertilizer, seed and

tillage to bushels per binand adjusts for fluctuating

costs of fuel and other in-puts, as well as yield differ-ences. “If you don’t knowwhere you’re at, fear grips

you,” he says. For example, in2006, higher energy costs meant thatRosentreter needed to earn an extra14¢/bu. on corn. By July, his saleswere running ahead of plan.

Farming by the numbers. “Every-thing I do is based on this budget,” hesays. “With farming, things changequickly and you’ve got to know whereyou are and where you need to be tohit targeted profit goals.” Keeping ra-tios in check, he benchmarks his re-turn on assets (ROA) and return onequity (ROE) to Fortune 500 compa-nies. His ROA for the last five years is10% and ROE, 20%.

Better marketing is key. When cornsoared to $5/bu. in 1996, Rosentretercouldn’t find a local elevator thatwould permit him to forward sell thenext year’s crop. That cemented a de-cision to bypass the local outlets andhaul to St. Louis grain dealers 60 milesaway where he can almost alwayscount on the fall basis running 10¢ to35¢ under Chicago, then improvingto 10¢ over by summer.

“I use basis to pay for my grain stor-age,” he says, but he admits you can’t

Lock in futures before harvest and basis shortly before deliv-ery, advises Rosentreter. He forward prices most of his cropwith HTAs, delivered direct to St. Louis terminals. On-farmstorage helps him maximize cash sales, worth a 64¢swing in basis from harvest 2005 to June 2006.

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park the crop and forget it: His 10¢-over goal was available for only 48hours in late June this year.

Rosentreter owns only the landwhere his house sits. “Cash rent lookscheap next to the interest on $4,500-to-$5,000-per-acre land,” he says. “Iput capital into things that makemoney for this farm.”

Storage is one of those items. In1998, Pleasant View Farms had a totalstorage capacity of 75,000bu. Today, his grain storagefacilities can hold 1.3 mil-lion bushels and allow himto segregate for value-added specialty grains likehard endosperm corn. Thefarm’s six full-time em-ployees are busy yearround with a fleet of fivesemi trucks that make be-tween 1,400 and 1,500trips to St. Louis river ter-minals each year.

Beyond the grain setupsits a gleaming white30,000-gal. anhydrous tank.With fertilizer his second-largest outlay next to rent,this bulk facility is anotherasset that Rosentreter sayspays for itself every 18months just by filling up in gas’s sum-mer lull. (This July, however, he alsocontracted all of the anhydrous forhis 2007 crop, before turmoil in theMiddle East racheted prices again.“I’ve sold some corn for ‘07 and ‘08,but it’s really not hedged until youknow your input costs,” he says.)

Corn is king. One revelation hasbeen that because he rents mostlyhigh-quality land, he makes about$45 to $50 more per acre raising corn-on-corn, compared to a corn-soybeanrotation. As a result, he only planted62 acres of soybeans this year, and hasno plans for beans in 2007.

He says yields haven’t suffered fromthe lack of rotation. Even with the ex-treme drought that hit the area lastyear, he averaged 165 bu./acre. He ex-perienced the weather advantages ofbeing spread out over a 50-mile radiuswhen some fields in MontgomeryCounty with better subsoil moisturewent over 200 bu.

How high is too high for cash rent?“I have my limits,” says Rosentreter. “I

Rick Rosentreter, 37, Carlinville, Ill.FAMILY: Rick’s wife, Amy, does computer work, paperwork,payroll and deposits for Pleasant View Farms. She plays amajor role in employee relations, cooking one hot meal a dayduring harvest for at least 14 workers. His brother Brent isfull-time operations manager for the farm and his brother Dougworks for the seed company AgriGold and offers agronomic ex-pertise. Rick’s parents, Gerald and Frances, pitch in during peak times as needed.Sons Logan (5) and Lonny (4) provide inspiration and farm in the garden.

RÉSUMÉ: Rick graduated from the Universi-ty of Illinois in 1991 with a degree in agri-cultural economics and a net worth of $381.After college, he returned to his hometownto serve as farm manager for Carlinville Na-tional Bank, working part-time on the fami-ly farm. He began farming full time in 1998.

ATTITUDE: Although quiet by nature,Rick ad-mits he’s a Type A personality. He’s willing toknock on doors for landlords, even if it of-fends the coffee shop crowd.“Yes, I prospectfor new customers,” he says. “What suc-cessful business doesn’t do that?”

LAND OWNERSHIP: Just say no. Good flat,black land sells for $4,500 to $5,000 an acrein Rosentreter country. “You can’t generateenough income to pay the interest if youhave to borrow. I elect to put capital intothings that make me money,” he says, such

as grain storage, a fertilizer facility and autosteer technology.

ON HIGH CASH RENTS: “Sure I have a limit to how much I’ll pay. It has to cash flow.But no one else can say how much I can pay. I’m bidding based on my fertilizer us-age, my input costs, my marketing, my management. . . What others pay for land isimmaterial to me. I am basing bids on my costs. The bulk of my landlords are thenext generation of owners—those that care more about return on their investmentand less about those personal touches we used to focus on.”

ON MARKETING: “Over the next decade, it will be marketing that sets farmers apart.Funds are completely changing the market. You can only cut expenses so much. Theunlimited side is your market potential. That doesn’t change if you are a 100-acregrower or 10,000-grower.”

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look at the soil types under my man-agement and estimate what they willyield year in and year out. Is it tiled? Isthe landlord paying for any inputs?What is the payment schedule?” heasks. Today’s large equipment, tractsthat require multiple turns and pointrows can severely limit the productionand equipment efficiency. In otherwords, he increasingly likes big fieldswith few bottlenecks.

Bright future. Slight and quiet innature, Rosentreter is steely when it

comes to other farmer’s views of histactics. With the average age of afarmer in Macoupin County at 56, de-mographics represent opportunity foryoung growers. “A new generation ofbusiness-oriented landowners isemerging. I have to find ways to re-spond to that or get out,” he says.

Upon Rosentreter’s desk sits a smallrock etched with the saying: “Whetheryou think you can or you think youcan’t—you’re right.” Indeed. He nowfarms that tract of land he was outbidon eight years ago. ■

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