A few years ago, I was climbing a grain bin on a farm south of Peoria to inventory the corn in the bin. Looking down, I noticed that a mean-looking Doberman dog had showed up. Where it came from, I don’t know. With no one around, I realized I would soon find out whether this dog was just showing curiosity or protecting its turf. As I made my way down the ladder, I began to see an erect stance and white teeth, and hear a low growling noise. I thought to myself, “What do I do now?” Using my best “dog whisperer” instincts (which I didn’t know I had), I made it back to ground level and walked slowly toward the dog, never taking my eyes off of it. The dog relaxed and walked away sheepishly. Whew!
So what was it that got me in that predicament? My name is Steve Burrow, and I am the regional manager of the Peoria office of Soy Capital Ag Services, a division of Soy Capital Bank and Trust Company. Headquartered in Decatur, Soy Capital Bank offers a wide range of financial services, including farm management services and farmland real estate brokerage. Our roots in the farm management business date back to 1924, when we were part of Commercial National Bank. Having gone through several name changes since, the farm management business was eventually sold to Soy Capital Bank in 2000.
Also located in the Peoria office is Douglas Fehr. Between the two of us, we have nearly 70 years of experience in farm management. We manage 134 farms totaling 29,391 acres located mostly in central Illinois. Our territory covers an area from the Mississippi River to the west and the Indiana state line to the east, I-80 to the north and I-72 to the south. We also manage some farmland acreage in the Western Plain states.
Most of our clients are absentee landowners. Some of the farms have been passed down to them from previous generations, and some have acquired the farms as part of their investment portfolios. While some of our clients live locally, a majority of them live out of state. A few live outside the U.S.
So what is it that we do for our farm management clients? Basically, our services relieve them of the cares and concerns of management of the farm while allowing them to enjoy the benefits of farmland ownership. We continually try to identify the needs and goals of our clients and then try to help them meet those needs and goals.
Most of our clients’ goals can be summarized in two ways. They want to maximize the returns from their farmland assets, and most want to preserve their farmland assets through good maintenance and stewardship practices. We have the expertise to help them accomplish those goals. If necessary, we can find a highly qualified tenant to farm their land. We have knowledge of many different lease arrangements and can help determine which is best for them. We keep up to date with current trends so we can negotiate lease terms with the farm tenant when it comes time to do so. Typically, we are responsible for bill paying and record keeping for tax purposes, plus selling of the landowner’s share of grain if a crop-share lease is utilized. We also monitor soil fertility levels, conservation concerns, insurance needs and look for ways to improve the farm, such as the installation of drainage tile.
Perhaps one of the most important aspects of our job is simply keeping the landowners informed. This is especially true for our clients who live out of state, and even for our local clients who spend a lot of time traveling. Knowing that their crops are planted or harvested and how weather conditions are affecting the yield prospects are important bits of information. Also, farming is constantly changing. We help them sort through new technologies and how those technologies apply to their farms. Government programs are also constantly changing, and we can help wade through the paperwork that accompanies those programs.
In addition to farm management, we are also engaged in farmland real estate sales. Between our five Ag Service Offices, over 200 successful farmland auctions have been completed since being licensed in 1990. Additionally, a number of farms have been sold through private listings. All together, we have sold farmland acreage totaling more than 100,000 acres in 43 Illinois counties for over $350 million.
Farmland has been a very good investment during the past couple of years. While other investments have experienced ups and downs, farmland has enjoyed unprecedented returns. Farms in central Illinois typically yield from 2.5 to 4 percent in cash returns. On top of that, land values have increased on average about 10 percent during the past three years, according to a survey conducted by the Federal Reserve Bank of Chicago. When you look at both cash returns and appreciation in value, farmland has performed well. Plus farmland can add diversification to a typical portfolio of stocks, bonds and certificates of deposit.
So my experience on that grain bin several years ago was just part of my job. It is a true joy getting out in the springtime during planting and in the fall during harvest watching the farm season unfold. Part of the benefit of our job is that we encounter so many farmers in different parts of our territory with different ideas. We become a wealth of knowledge that can be passed from farm to farm. iBi
Steve Burrow can be reached at (309) 687-6008 or by email at
[email protected]. For more information, visit soycapitalag.com.
