VCP: Farm Management and Rural Appraisal in our chaotic age

Grant Fitzgerald, Farmers National (event introduction) [00:00:00] Good afternoon. Can you guys hear me all right? Yeah. That'll wake 'em up, right, Rick? All right, why don't we go ahead and take our seats and we're gonna get this afternoon session on its way. All right, so I am an, my name's Grant Fitzgerald. I'm a senior Vice president of Farming Ranch Management at Farmers National Company, and I'm really happy to be with you guys today. And Farmers National is very excited to sponsor on the session you guys are about to sit through and engage with and see. So, a couple cool things that I just wanna kind of talk through is, number one, we're gonna be watching a podcast with Vance Crowe and Dennis Reyman. Okay? So we're gonna witness a live podcast right here on stage in this nice setting. And, you know, I feel a little funny, basically talking through Vance's resume and stuff. I know you guys know him. I did wanna tell you a story of how I met Vance first. So I was a brand new farm manager at Farmers National Company and went down to St. Louis as a part of one of the Monsanto new farm manager, emerged trips and, you know, got invited to go to Ruth's Chris Steak House, which was one of the best filets. I, you know, I can still say I've had, you know, we're overlooking the arch and the river and, and something beautiful. And then of course Ron Dunker was like, well, since we're buying you guys a hundred dollars stakes, I gotta sit you through, you know, a speaker. And it's like, oh, okay. And I'll tell you what, it was amazing. Vance did a phenomenal job at that time. He was director of millennial engagement talking to a bunch of 20 somethings and getting into the business.

Vance Crowe [00:01:35] And at that time, he didn't know a lot about farm management and appraisal or real estate, but you couldn't sense that, you know, I could tell he's a learner. He's been through a lot. He's world renowned speaker. He's traveled the globe. In fact, he's, you know, is a part of the Peace Corps and, and served in Kenya, which is a piece that doesn't get announced very often. So he's a steward to, you know, communication to generations, and he's really impressive. So, again, I'm really excited to have him here and be in our master of ceremonies and, and we get to a little, learn a little bit more about him upcoming. Why did Farmers National sponsor this event? We have a really young developing marketing team, and we see the power in letting people, you know, work with our story and how they integrate with us through the mediums that they like, which is turning into social media podcasts, obviously like this. And even just Instagram, right? Like how they get their data, how do I get my news is, is through the same way. So that's why we really wanted to sponsor this, that Farmers National did. And lastly, when I was asked to do it, I said, absolutely super excited, but who's gonna be the speaker? Well, then I found out it was Dennis Reyman, and I thought, how can I back out of this? I already sent him the check. I don't know if I wanna be a part of this anymore with Dennis. I'm, I'm, I'm totally joking. You guys know how great Dennis is, and I'm so pumped that he's on here. Dennis and I, I consider him a friend. We served on the council together during COVID. So he was the president actually, and probably one of the first virtual ceremonies of becoming the president.

Vance Crowe [00:03:11] And you know, him and his wife are just gracious through the entire process and, and really took our our organization through a challenging time. And he did it again with resiliency and grace. So hopefully some of that sneaks through in the podcast today. And thank you guys very much, and I'll turn it over to Vance and Dennis. We can get a round of applause for them. Thank you. Well, I don't, I don't know if any of you wear a whoop strap or an Oura ring. I don't know if any of you, this tracks your heart rate. Mine's been totally flat calm until we go to record a live podcast in front of all of you, because normally I record a podcast, just me and the guest. But here we're gonna try and have a conversation that maps both to what you need or want to hear about in here, in this room, but also goes out to an audience that maybe has no connection at all with modern agriculture or farm management or appraisals. So this is quite an adventure and it's a very thin needle to thread. And that's why I was really glad when I met Dennis, because he has a broad range of experience and really an eye for both the past and the future. Much like we were talking about this morning with Dr. Kohl. So why don't I start off, Dennis, would you just give a brief overview of your background in farm management and rural appraising?

Dennis Reyman [00:04:35] Yeah, I am Dennis Reyman. I'm with Stalcup Ag Service, which is in northwest Iowa in the storm lake, kinda right in the heart of northwest Iowa. And that company has been there since 1942, started by Mr. H. Buck Stalcup, and he was an integral part of this organization for many years. So I started as an appraiser in 1993, and my first course that I took in Kansas City was a week long in those days, no online or anything like that. We went there, we were there for seven days. And so you got to know a few people and I knew I was in the right place, the right organization, the right,

Vance Crowe [00:05:16] The right

Dennis Reyman [00:05:17] Thing to be doing. And so I did that and then I started managing farms and they told me, if you're in northwest Iowa, you should manage farms. And so, so that became part of my daily routine was juggling between appraisal and farm management and then also, you know, real estate sales fits in with that. So you do that as well. So it's given me a broad view of real estate, farm real estate activity.

Vance Crowe [00:05:46] So you're in a regular conversation with a normie out in the world and they, you tell them you're a farm manager and then they look at you with raised eyebrows. What's your response? How do you describe what it is that you do?

Dennis Reyman [00:05:59] It's a good question and I, I think there's a lot of, a lot of perception, a lot of misperception about what a farm manager is and does. So I always, I always say I'm a professional farm manager, and so at least I, and maybe I should say I'm an accredited farm manager, but I think that the word professional probably sets the base more quickly. And so I describe, you know, we're, we are business agents, we're property managers for people who own farmland, no different than a, than a business property manager for some other, you know, commercial or what have you. And so we're their business agent in all transactions and in, in their planning, in their, in their reporting or accounting reports. You know, we are, we do everything except drive the tractor as far as that goes from the landowner's perspective.

Vance Crowe [00:06:53] Well, you mentioned landowners, the big national news last night and this morning is that in the Iowa Governor's race, there are some candidates both on the right and on the left that are saying, you know, what we should do to control rents is we should charge higher taxes on people that own the land that don't live in Iowa. You know, on its face. A lot of people might say, yeah, that's great. We, we don't want to have absentee landlords, we don't want to have people that are not connected with the land. But as a farm manager, what holes do you see in that?

Dennis Reyman [00:07:26] Well, that might sound good until you think about it. You know, why would raising property taxes on an absentee landowner hold down rent? They're probably gonna try to charge more rent to offset that. So that's a, that's one issue. But you know, how are you gonna identify who should be taxed and who shouldn't be? And really is that even legal? How do you, how do you tax this person at a different rate based on their address? That seems ridiculous to me. We need land, we need absentee landowners to absorb the ownership basically of all of the, I don't, I think there's like 30 million crop acres in Iowa, and it's like 11, 12,000 is the Iowa State average. That's a lot of money. Who's gonna absorb all that ownership? Farmers can't do it by themselves. We've gotta have that outside money. And a lot of that outside money grew up in Iowa.

Vance Crowe [00:08:27] Well, surely it's, it is possible to do, you can just say maybe something like if you're paying property tax in Iowa or you're a Florida resident, but when you think about that, you think rents would go up, not down.

Dennis Reyman [00:08:41] Oh yes, I, I know they would. I mean, at least that'd be the pressure. There would be absolutely no, no reason for rents to soften. Given that increase in costs.

Vance Crowe [00:08:53] Do you think people would sell if they thought they were having to pay higher property taxes?

Dennis Reyman [00:08:58] It'd have to be a pretty exorbitant increase. I also manage a few farms over in Nebraska and their, their property taxes are at least double what Iowa's is in some cases, closer to three times. And so I don't know how they do it, but they do. But I think in Iowa where you're used to paying a certain rate and then they're gonna single out certain people and say, you're gonna pay X amount more, I just, I, I think there'd be such an uproar. I don't think it'd be politically, if they thought they were gaining on, on that front, I, I think they would soon quickly find out that they're not gaining.

Vance Crowe [00:09:39] You also worked on the appraisal side, the cost of everything is going up. Is it going up forever?

Dennis Reyman [00:09:47] Well, it always has gone up. It, you know, I, I started farming on my own in 1979. Seed, fertilizer, herbicide cost me a hundred bucks an acre for a corn crop and my gross income back on that, I also had to pay cash, rent and the other machinery and et cetera. But my, I figured I was gonna gross about 250 bucks an acre. So, you know, it just, but if you, if you figure that over time, so we're talking back, you know, 45 years ago, and if you factor that over time, it, it progresses at a a rate that's, you'd say, yeah, that's probably about right.

Vance Crowe [00:10:25] The challenge I think with rapidly changing prices is nobody really knows what something's worth. Am I paying a lot? Am I paying a little, it seems to me that this amount of confusion is really intense right now, but you look back on your career, is this more intense than other parts of history? It's

Dennis Reyman [00:10:45] Pretty intense. Yes, it is. The way I look at it, and I, I didn't figure this out my own, I, I was taught this by somebody on the phone. He said, you ever look at, at the ratio of the cost per gro compared to gross income? I said, geez, I should be doing that. And so therefore, ever since I have done that, and I know that, you know, fertilizer is gonna run you, I'm talking NP and K is gonna cost you that nitrogen, phosphorus, and potash is gonna cost you between 15 to 20% of expected gross revenue. Now I put in sulfur and zinc and maybe some other things, and if I can get that all done under 20%, I'm pretty happy. And maybe gross revenue improves or maybe it declines. So that, but you, that's where I try to shoot. And back a few years ago when we kinda went through that trough from 2015 to 2020 and fertilizer prices did soften and they softened to the point where I could get a really good job done of NP and K for under 15% down around 13 or 14%. So I put a little extra on even though the, you know, kind of a build proposition and for the fertility, just because it, it kind of looked right like a goodbye.

Vance Crowe [00:12:04] And what is it now? What's the ratio Right now

Dennis Reyman [00:12:07] It's over 20%. It's in fact it's well over 20%, which just really tightens things.

Vance Crowe [00:12:14] So if you're an appraiser in this market, there has to be a wild difference between what people are expecting and what the appraisal comes in at, or at least a lot of ambiguity. How are appraisers to manage this kind of fluctuation in what people think things are worth?

Dennis Reyman [00:12:34] Yeah, that's an interesting question, Vance, because, you know, farmland is not purchased on today's income expectations. You know, the anticipation of future benefits is a big driver of value. And the anticipation is, first of all, if I'm gonna buy that farm, I can do a better job with it than the guy that was farming it. So that's part of what goes into the mentality. Another part is, you know, if it's next to you, by golly, I want to own that if I can. So I'm gonna pay what it takes, what I'm capable of to, to own that. And so as an appraiser, you have to sort that out. But you know, it, it's really the, the daily fluctuations of, of income and expenses doesn't affect our land values. Now maybe it does in other parts of the country, I'm speaking for Iowa, but I don't see it rise and fall. Now it's gonna take, somebody mentioned some lag time on land values earlier, and that's what happens is there's a lag time. It takes interest rates go up, it takes a little lag time for that to really soak into the market. Now, I will say back in September of 2020, we had, remember back, we had a real drop in interest rates. In fact, one of the main lenders got under 3% for the month of September, 2020. That was an immediate $500 bump in the land, but we could just see it, it was there. And then of course, then prices improved, crop prices, and we went to $7 corn and so forth. And then you saw this happen.

Dennis Reyman [00:14:06] So very rapid rise, but that interest rate, that was the one time where I really saw an immediate response to a cost. Well,

Vance Crowe [00:14:14] Lately we've seen a lot of transfer payments happen from the government. It seems to me that there are a lot of farmers that are saying, Hey, we don't want this. Right? We don't, this is not helping us. It's making everything more expensive. When you're a farm manager, how are you thinking about the transfer payments and the bottom line of, of a piece of property for, for a, for a landowner?

Dennis Reyman [00:14:38] Yeah. And the bottom line of the value of the farm is, you know, it's, it's gonna help stabilize it, but you have to, you have to stay on top of what your market's doing. And you know, we have a lot of, a lot of public auction activity, especially this time of the year. And so we can, we can see what the trend is doing. We look at the overall trend. We also look for an appraisal, we look at comparable sales. So you're gonna pick out, I usually try to pick out five or six that would be really as comparable as I can get within a reasonably close timeframe. And, you know, then you go through a, a series of adjustments for soil quality, drainage issues, maybe field configuration, laying the land, maybe the neighborhood. So all these things get factored in, but yeah, it's, it's gonna take time and you just, you have to stay on top of it pretty much. Daily.

Vance Crowe [00:15:38] Daily, pretty

Dennis Reyman [00:15:39] Much. Yeah.

Vance Crowe [00:15:41] So before this kicked off, I had a chance to talk to Grant from Farmers National, and he mentioned that one of the challenges that a new appraiser has to handle is when you go to a person and you are appraising the value of their property, they have some heartstring to it, you know, they called it a heartstring asset. So there, I grew up in that house, I climbed in that tree, I I rode horses over there. Factors into the price. What guidance do you have for a new appraiser when they're engaging with somebody that's got that they view it as a heartstring asset than just an asset? Yeah,

Dennis Reyman [00:16:20] I, I call that sentimental value. And it's, it's a real issue to people, to, to some people that doesn't mean it's got a dollar value, but it's got a, a value. And, and so the way I recognize that, you know, you're, when you're doing an appraisal, and especially when you're managing a farm, it's not a transactional activity. Now, I mean, to me, to some people it is, but to me, and I think to most people in this room, it's a relationship issue. Even if it's just a one time appraisal, you're building a relationship with that person and you want them to trust you and you want them to, if they trust you, they'll trust your report. And so if you delve in, ask the right questions, if there's a good, good old house there and or whatever it is, an old barn that, you know, maybe you ask a question that, you know, tell me about that barn or you know, just some, boy, if that barn could tell a story, then they'll tell you a story and, and maybe you just need to do a little bit better job on your writeup, your description. Just treat that item with respect. And if you do that, even if you put next to no value or no value, you explain why you put no value on it, they'll accept that nine times outta 10. I think they'll accept that, but treat that item with respect because it's a big deal to your client.

Vance Crowe [00:17:44] You know, that's something I, I've learned through doing Legacy Interviews is that there's a lot of people out there that they've had all these experiences, but as soon as they got through whatever that crisis was or whatever that challenge was, another one came up. And so they never took the time to go back and reflect on it. But when people do get a chance to tell the stories about things, it's like they're setting it down and they can move on. It seems like that's, that's exactly what you're talking about.

Dennis Reyman [00:18:12] Yeah, I think that's a good point. They'll, you know, in a way say, you know, a lot of our appraisal work is for a state settlement, so the parent passed away and, and the, whichever child is the executor is you're dealing with them maybe looking at the property or at least talking about the property. And, and you need to be aware, you need to pick up, you need to pay attention to these things and give them a moment or two to, to express to, like you say, to unload, that type of thing. And that'll go a long ways.

Vance Crowe [00:18:43] Dr. Kohl this morning said a few things that were jarring to me, but one in particular he said was that, you know, most of the land that's going up for sale right now is people that were married for 30 years and getting a divorce.

Dennis Reyman [00:18:56] Well, you gotta remember he's from Virginia

Vance Crowe [00:19:01] Fair point, moving on.

Dennis Reyman [00:19:05] We, we don't see that in Iowa or I, I'm not seeing, I'm not picking up on that. Most of the apprais or the estates that farms that sell are estates. There's, you know, there's always that transition going on. A lot of it in the last, especially I'd say in the last decade has been what I'd say a generational transition where the, the siblings inherited that farm and did hang onto it for a while. Now they've gotten to the point in their life, maybe their seventies, maybe maybe the oldest one's in his eighties, Hey, they say it's time to sell this, divide the money, make it easy on our estate planning, make it easy on our errors, and, you know, sell the farm and, and move on. And so we see that a lot of, I call that estate, I think that falls under estate planning in a way. So we see a lot of that. But as far as divorce appraisals, not much or divorce sales.

Vance Crowe [00:20:02] If you talk to wealth managers, they will tell you that the biggest threat to their business is when the business gets passed down from managing the parents' money to managing the children's money. And they'll all tell you, within a month of mom and dad passing on, those kids take that money and they move it to their financial planner. Is that the same issue in farm management?

Dennis Reyman [00:20:24] Well, it's either gonna be, I guess in our experience, and I can only speak for our experience, you know, it's either gonna be sold fairly soon, it may be held for an indetermined, you know, at the time that they decide to hold it, it's an indetermined length of ownership that they're gonna sit with it, or they may have. I've got clients who say, we will never sell that farm. My kids are instructed to never sell that farm. My dad worked so hard to accumulate that land. We are here to honor his memory. And so you have that and you need to know that as a farm manager or as an appraiser. As an appraiser. Why? I just think it's important to know the history of, of the ownership and who they are.

Vance Crowe [00:21:16] You know, if you talk to some of the older guys in the room, they'll talk you to you about how it used to be that the impression of a farm manager was that he was a rent cop. He came around and picked up the rent. It was always his job to try and, you know, keep ratcheting that up. The guys that I was speaking to didn't think that that was the, the mentality. Now, do you agree with that? And if you do, what's changed?

Dennis Reyman [00:21:40] Well, yeah, I think that there was a perception of that maybe at one time. I tell people that we spend, and I tell my tenants this, we spend a lot of time educating our clients or educating people who may or may not become a client, but they've got questions. So we just, education is a huge part of what we do. And, and I, a lot of times, you know, a client will hear, well, geez, this farm, I heard a farm rented for $500 an acre. I, why can't I get that? Well, here's why. And so you go through and explain that and you know, we're trying to be fair. The farmer has to have a reasonable chance of making some money. I mean, otherwise, why would he want to do that? So, you know, we try to be, we try to represent our owner. We also try to represent fairness.

Vance Crowe [00:22:30] When you think about the people out in the world that might want to become farm managers, maybe they don't, didn't grow up on a farm, they don't have any experience there. What is the skillset that would make somebody primed to become a farm manager, but they maybe wouldn't even think of it?

Dennis Reyman [00:22:47] Well, they've gotta be interested in people. I tell, I tell when I have the chance to talk to students, and, and it's a great opportunity when you can, I tell 'em, psychology is just as important in this job as agronomy. You gotta be a good agronomist to some extent, but you gotta understand psychology and you gotta understand the different people. You gotta figure out what motivates 'em, what their goal. Our job is to meet their goals, assuming it's legal and ethical. So yeah, they, if if they're interested in people and if they find economics, interesting accounting numbers, if they like numbers, I think they have a good chance of becoming a, a good farm manager.

Vance Crowe [00:23:30] I, I have some chance to be around banking, the ag banking world. And a few months ago I was talking with a group of people with a bank and said, you know, if we have another downturn like we did in the eighties, we don't actually have any loan officers. We maybe have one or two people in the workout crew that ever even saw what, what this would be like. When you think about the change, the transition, people not being able to be financially solvent, do you have fears that we have a people with enough experience when the times get really rough to, to be able to weather that?

Dennis Reyman [00:24:07] Yeah, I, that's, that's a wonderful question to ponder. And I know there's a lot of, a lot of people in the loan industry worried about that. There's a lot of people in the legal profession in, in the rural areas worried about that. If you go to our town, storm Lake is 10 or 12,000 people, the attorneys are all pretty gray haired. And you know, the question is, well what does it take to bring a young guy in? Well if they didn't grow up here or close by, they are not interested in moving here. And if they do, they want Des Moines money and they want Des Moines lifestyle, so they may be in Des Moines on the weekend. Well, it, so it's tough. It, it's tough. Yeah. As far as know, I think I got off track.

Vance Crowe [00:24:54] Well, we were just talking about like things could get rough. Yeah,

Dennis Reyman [00:24:57] The,

Vance Crowe [00:24:57] There's a new crop of people in banking that, that don't have the experience of what do you do when things get real bad?

Dennis Reyman [00:25:05] Yeah. And I I I always remind people that maybe haven't been through those tough times, really tough times that tight margins and tough times are not exactly the same thing. So tough times is when the banks are going down. And so in the eighties, you know, we had a lot of small town banks, one, one location, small town banks in about 84, 85. It was kinda like bing, bing, bing, bing around us over about a six or eight month period. Well when a, a town loses their bank man, think of the shock waves and even if it was 50 miles away, it's a shock wave. So those types of things are what we experienced in the eighties, and that was a, the what I can't get across to people, to, to young people or maybe people that haven't experienced. So I can't get a, I can't really, I don't feel like I get across the emotional impact because a lot of these small towns were just decimated and some have recovered, some haven't. So that's, that's what tough times are.

Vance Crowe [00:26:15] This organization, A-S-F-M-R-A talks more about generational transition than probably any other organization I've ever heard. And when you think about the, when you were first starting an A-S-F-M-R-A, what was the big transition that you were making back then that was generational?

Dennis Reyman [00:26:36] Well, it was, you know, the similar thing with the older generation dying and, and the, the land coming to the younger generation. But I think, you know, and I started in 93, I started managing farms in 95 and there was a lot more crop share, a lot more, you know, the old 50 50 type of crop share even, or maybe some other blends of crop share, which still exists. But you saw that transition to usually either a custom farming operation where the owner owns the crop and pays for the work or it's just a straight cash rent. And so we've moved away from, I think we've gone from the assumption that we're gonna participate in a crop to the assumption that either we're all in or we're all out.

Vance Crowe [00:27:25] What's the transition been like for appraisers?

Dennis Reyman [00:27:30] Yeah, that's a good one. I, you know, more technology for sure. That's been huge. When I started in this business, we had one, one computer in the office, then they decided they needed two computers. So I, as the appraiser got the, the old computer. So I had a computer all to myself. So yeah, that, that was, and you know, the appraisal software, I, I wrote it all myself on, on Excel and so those types of things and you know, you learn how to transition that stuff forward as technology presents itself. Now, am I the most efficient appraiser? Maybe not, but my reports don't get questioned. So I'm happy about that. But yeah, I guess, you know, it's just, and you know, the, the other thing is on the appraisal side, it used to be that we would go to the courthouse, we'd look up all the sales, we'd dig out all the, in Iowa it's declarations of value that show the sale price. We'd write it all down on a piece of paper and take that back to the office and, and hopefully get that recorded into a, a, a good sales database. You know, nowadays it's all online. We've got guys that, or companies that record every sale in the state of Iowa or in other states and put out a nice report at the end of the month. So there's that as well. But people, and, and we've got online auctions so people can sit there, watch that farm sell, watch those bids, roll in. So it's real time and people are, so, it's easy to become an expert.

Dennis Reyman [00:29:06] So, you know, so the, the value of an a RA, you have to sell it because it's, it's a hard thing to accomplish and it's a real achievement to become an A RA or an A FM or you know, we've got two other designations as well and you know, but it's the appreciation of hard work and accomplishment and dedication like that. You really have to sell it, I think more than you used to.

Vance Crowe [00:29:35] When I hear what an appraiser has to go through to become an appraiser, it's shocking. It's, it's, it's a lot.

Dennis Reyman [00:29:42] It is a lot.

Vance Crowe [00:29:44] If you're talking to a person at the beginning of that journey, what are you telling them about why it's worth it to make it all the way through that?

Dennis Reyman [00:29:52] Yeah, I, I would start out with a question of, of why do you want to do this? You know, what, what is your interest here? And so if they give me an inappropriate answer that shows that they do truly have the desire to do this and get into this profession, you know, then you start walking through and it's, here's, here's what you're, this is truly a, a great economic study that you're gonna be doing every day, specific properties, but it's also gonna build into a whole understanding of your market area that you're working in. And, you know, it's just a, you have a real knowledge database and if that's valuable to you, it's, that's, it's a great thing. It's a great field to get into.

Vance Crowe [00:30:34] You mentioned that when you first started there was one computer and then two, now you fast forward to what we are today, right? You have a super computer in your pocket right now. Yeah. You can send a message anywhere in the world. Couldn't do that with those early computers. When you imagine the distance that you went from the beginning to now, what do you think the future will look like? Will you go that same distance or will it go further even?

Dennis Reyman [00:31:00] Yeah, and that gets into the whole question of ai. How far is AI gonna take this? How much is that gonna take over? Been some interesting comments on AI this morning as far as is there gonna be disillusionment? Is it going to, is it gonna replace a lot of white collar jobs? I guess I consider appraisal to be pretty much of a white collar job. How many appraisers will get displaced? Some will. Can you go appraise a, a subdivision with ai? Yeah, you probably do a fairly decent job. I don't know, I don't know enough about that. But can you appraise a, a 500,000 bushel grain storage set up with ai? You need a human involved. Maybe AI's gonna help you, but you need a human involved in that. So yeah, I don't know. There's a, as far as, as far as comparing the progress, I, it'll probably go faster. I just can't quite envision, you know, 20 years down the road with ai,

Vance Crowe [00:32:03] AI is is one of those things that right now I think it is vastly overhyped. I think Amazon, for example, I think when they were like, wow, we're you, we're professionalizing with ai. 'cause it's a lot better to go to the market and say that than it is, Hey, we're not meeting expectations and we gotta shed overhead. You guys see that too, right?

Dennis Reyman [00:32:22] It's

Vance Crowe [00:32:22] The easy thing. Now all of a sudden it's not your fault, right? It's the AI and we're, we're streamlining, but I to your point, I do think it's going to have a major role. First of all, just if you can put the raw input that an appraiser is seeing, you're no longer sitting there typing up reports that AI will write it largely for you.

Dennis Reyman [00:32:41] Yeah. And that, that's right. And so I guess, you know, the way I use AI and I'm, I am almost illiterate when it comes to AI knowledge, but I use it kind of as a super Google.

Vance Crowe [00:32:53] And

Dennis Reyman [00:32:53] So that's my extent of ai. I have not put any data into AI and said, crunch this for me because then I'm giving it to the world. Why do I want to do that? It's my data. Why do I want to give it to the world? I mean that's, that's my viewpoint of that.

Vance Crowe [00:33:08] Well I think that's probably the best case that homes and businesses are going to be bringing servers in where you ask the AI a query, but it does not get your data and you have a different way of structuring it. I heard Elon Musk talking the other day about how AI will actually overtake everything. It will, you won't have email, you won't have text messages in the same way. What you will do is you will interface with your AI and it will tell you, Hey, Dennis wanted to get a message to you, but it won't be relevant. Or even material that you sent that in a text message or an email. As you think about these wild futures, does it scare you?

Dennis Reyman [00:33:50] Makes me glad I'm 67 years old. Well, but I hope to be engaged for a long time, you know? Yeah. It is scary. Like I say, you gotta stay on top of it daily, whatever it is. And so we've got some great sessions here today and i I at this conference, and I'm glad that we do, that's the value of being a part of an organization like this. But certainly some of us will be slower than others to move along into this. But we have to recog, we have to always remember that this is a relationship business and I fear something like AI taking it more transactional.

Vance Crowe [00:34:32] Tell me about a time when the relationships that you had mattered in your work.

Dennis Reyman [00:34:38] Well, they pretty much every day, but I'll tell you on the appraisal side, I don't know how many times it's happened that, you know, you do that appraisal and as, as Aras, we're pretty proud of the work we put out and we're pretty proud of the thoroughness. And so when that report goes out and they read it and they, okay this, that's, they accept the value hopefully. But then there's, there is a perception that, well that guy sells farms too. Maybe he's just doing that appraisal to get a listing. And I say, well that doesn't work. You know, if you appraise it too high to get a listing, how are you gonna sell it for that? You're above the market. So, and ethically, I mean, I hope nobody in this organization would do that and I don't think they would. But there, you know, there's a lot of appraisers who are not part of professional organizations, but down the road that person might come back to you and say, we really like the job you did with that appraisal and now we wanna sell the farm. Would you sell the farm for us? Yeah, I would. And that is because of that relationship. You took the time and maybe it was just a few minutes to develop a little bit of a relationship, you back that up with a good solid report and they remembered you and they came back to you years down the road to sell that farm for 'em. So that's, that's a great example for, you know, appraisers and, and not all appraisers are, are in the business of selling farms as well.

Dennis Reyman [00:36:09] But you know, for those of us who do that, that's one example.

Vance Crowe [00:36:14] So we were talking before about generational change, you know, in farmland the past for A-S-F-M-R-A, what do you think A-S-F-M-R-A has to do to adapt to be ready for the next generation of young people that want to be in this field?

Dennis Reyman [00:36:31] You know, it's, I think that what I've seen in the last five to 10 years is the immediacy of wanting information and communications. And we've got the ability to put communication out so quickly. And I mean, they want it now. They don't wanna wait for, maybe some people are happy to wait for a quarterly report. Some people want a monthly report, some people wanna look at it. No. Today I think we can meet that need. I don't know how the American society does that specifically. Certainly individual companies can respond to that. But I think, I think being aware of the immediacy of communication is, is important. And David Kohl made a good comment on that about how, you know, you need to make sure that you've got those interpersonal communications at the forefront of what you're doing.

Vance Crowe [00:37:30] One of my favorite things to ask certain guests is a question that's puts you on the spot, and I call it the Peter Thiel paradox. This is where I ask people, what is one thing that you believe that almost no one you know agrees with you on? And the reason this is an interesting question is because you have to first say something that nobody here in this room is going to agree with. And if you succeed, now you have a new problem because now you've gotta convince them of it.

Dennis Reyman [00:37:57] Yeah.

Vance Crowe [00:37:58] Do you have a Peter Thiel paradox?

Dennis Reyman [00:38:01] I don't know if it'd be a hundred percent Peter Thiel paradox, but one thing that really, I, I try to, I try to really harp on, I guess is in Iowa we've got a rating called the corn suitability rating. Every soil in the state's got A-A-C-S-R for short CSR rating. It's a weighted average for each field or each farm. And so, and it's a scale of up to a hundred. So let's say you've got a, a farm with a CSR of 90 good farm. Well, but how good is it? I and, and, and of course people take the sale price, divide it by the CSR. Well it's worth so much a CSR point. Well it takes a lot more than that to know what the value of a farm is. And that's where I differ from a whole lot of people because people want to lean on that. Yeah. Ex what's a going rate per CSR? It varies so much that it's almost impossible to truly answer. Yeah, I could say well, well let's say 175 and that that's gonna fit for some farms, of course. But when I run all my sales every year, it shows this, just looking at sales that are highly tellable, at least 85% tillable, at least 40 acres in size and no considerable building value added to it. Just straight crop land value. The dollars per CSR ratio is a hundred percent range from high to low. And that's just in northwest Iowa. So how do you explain that?

Dennis Reyman [00:39:34] Well, the market's got too much variability to just rely on one, one number that was developed by, not by appraisers, not by any valuation specialists. It is developed by soil scientists, you know, not for the purpose of valuation, but just a comparative and not all CSR values the market will agree with.

Vance Crowe [00:39:58] There

Dennis Reyman [00:39:59] Are some soils that are better than rated less, really less productive than rated. And the market pretty much knows that. And that's where you get some of that variation because the, if that farm is overrated, the market will probably not bid up to what you think, you know, on a dollars per CSR. It'll be at the lower end because the farmers know the local neighborhood knows how that farm is.

Vance Crowe [00:40:24] Well I don't have any way to know if that was a controversial statement or not. Was that

Dennis Reyman [00:40:30] Iowans? Is that controversial? You think it is, Terry, if we don't, we dunno how to handle CSR two controversial. Yeah, it is from a, from just a surface standpoint, it would be controversial from a true appraiser. They would know that. Yeah.

Vance Crowe [00:40:52] So this last year was pretty rough. It's shaping up to be pretty rough harvest even come in big bumper crop and prices weren't for a lot of grain farmers. What's your estimation? What do you think next year's gonna be like?

Dennis Reyman [00:41:06] I see opportunity possibly in the grain markets, corn and soybeans is all I really can speak about. But you know, I, I see possibility for higher prices. Some things have to happen of course for that to develop. But people absolutely need to know their numbers and no one is profitable to sell. They need to be ROI focused. They need to know if putting that corn in the bin or beans in the bin, what's the cost of that storage? What's the cost of the drying charge if you're gonna take it to town, dry it, store it, what's the true cost of that and how much price increase do you need to recover that and and become profitable? And if you do become profitable, what was the ROI on that I, I like to annualize the ROI and then, you know, if a client says, oh gosh, we spent a lot on storage and drying Yeah, but it made you, you know, 22% ROI,

Vance Crowe [00:42:03] So you, you see a guy like Grant up here one day he will be your age. What do you think farming will be like when that time comes?

Dennis Reyman [00:42:15] I think it'll become, as far as farmers go, I think it'll become fractionalized more between the real big guys and more smaller guys. I, I think that you'll see guys like, you know, I don't know if Grant has any farming on his own or, but I think you'll see guys like him that have farming operations of whatever, you know, probably not of a large size, but certainly of a viable size. And I, I think that, and they'll be hiring that work done by large operators. You know, you can hire a guy to come in and, and combine your crop. He can bring in more than a million dollars worth of equipment, the labor that knows how to operate that machinery, the diesel fuel, the, the, the upkeep, the insurance, all that's covered. And you're gonna pay him, according to the Iowa State customer rates, you're gonna pay him 50 or 60 bucks an acre for all that contribution. Now I think there's gonna be more people taking advantage of that. There's gonna be more people willing to do custom makers 'cause they gotta offset the cost of that machinery and they can maybe run through a hundred acres in a day with a combine and a couple of grain carts. So I, I think you'll see more of that. I think that the idea of a guy running a, you know, machinery on his own, just his own moderate sized operation, I think that'll be reduced.

Vance Crowe [00:43:51] Well, maybe as a wrap up, you guys just installed a new president, Brian was here for 20 years. Yeah. Now you have Amanda. I've seen her speak a couple of times. Very eloquent, very poised, but she's now in charge of an organization where you guys are kind of, you do, you know how to do things right and so you wanna keep doing it, but you know, you have to change any guidance for her as she's trying to step in and continue to modernize this organization.

Dennis Reyman [00:44:22] Well, first of all, she's got big shoes to fill with Brian Stockman, and I'm sure she's aware of that. But, so we, we wish Brian the very best in, in his, with his future endeavors. But Amanda, I, I had met Amanda, we, we, we've had a wonderful program for about 30 years called Leadership Institute and it's now called Leadership Excellence. And so it's, it's a program that you end up in Washington, DC for several days. We used to go for about four days and I met Amanda on Capitol Hill a number of times and I was just, IM impressed with her and very, very intelligent, very personable, very, you know, just engaging and obviously very capable. And so when I heard that she was gonna take this job, I was pretty happy. And I know she'll do well. I think she'll bring new outlook, new, new insights, and I, I think we're gonna move forward in great shape. So my advice is just to engage with this entire membership as I, I just can't stress enough. We're a, we are a relationship outfit. Our jobs are building relationships and maintaining and, and that's what She'll do. That's where it's at.

Vance Crowe [00:45:38] Well then maybe to wrap up, if somebody is listening to this and they think I'd be interested in checking that out, where, where should they go to, to look into becoming farm manager or rural appraiser?

Dennis Reyman [00:45:52] ASF mra.org would be a good place to start. That's our national website for this organization. Also, every company here would have a good website themselves. And I think if you would Google or you know, AI search, a farm manager, a professional farm manager, a professional farmland, appraiser, however you wanna word that, I think you're gonna find somebody in this organization pretty quickly. And that's, you know, here's what, here's a great thing about this organization when I was starting and just taking my classes and so forth, and I would call somebody with, I would think, well, maybe this guy knows something. And I would say, I'm Dennis Reyman with Stalcup Ag Service.

Vance Crowe [00:46:33] Oh

Dennis Reyman [00:46:33] Yeah. And the door was wide open. They'd tell me whatever I wanted to know because of the relationships in this organization. And it's, and that continues to be the case, and I hope it always will.

Vance Crowe [00:46:46] Well, Dennis, I'm very glad they selected you as my podcast guest. Thank you so much for coming on.

Dennis Reyman [00:46:51] Been a true pleasure.

Vance Crowe [00:46:53] Let's all give Dennis a round of applause. Thank you. I, I think that was my first live podcast audience, so thank you for joining me on that adventure and thank you to Farmers National Company for, for sponsoring. This is kind of a fun little adventure to do. We're gonna wrap up and you guys are gonna go into your membership meeting right away, and I, afterwards, there are a few sessions going, so I thought I would let you know about those. So session three, starting at one 40, there's gonna be from Quick Winds to full workflows operate operationalizing ai, so that's gonna be great. There's also chasing water, wind and the Science of Weather prediction. That's gonna be in the Heron room. And then I will actually be conducting a session on Bitcoin. And my Peter Thiel paradox, if you want to hear about this, is that I believe that Bitcoin will completely demonetize ag land. And I'm guessing there's nobody in the room here that agrees with me on that. So I've succeeded on the first part. We'll see you guys later. Thank you. Thank you so much for tuning into this live podcast with A-S-F-M-R-A. That is of course the Society of Farm Managers and rural appraisers. It was an honor to be there and thank you to Farmers National for inviting me and supporting that podcast. Up next, I wanna share with you a little vignette about a group called Broadview Capital, which is a private equity company here in St.

Ad segment / testimonials (multiple voices) [00:48:29] Louis that hired me to deliver that Interest-Based Communication course that I've been talking about. This course is a, well, I'll just let them tell you about it, but I wanted to put it on here in case you are thinking about how can I improve my professional communication skills, how can I learn how to negotiate, ha, have a better introduction, deal with conflict, have deeper conversations, present ideas, and really just be able to express yourself to people no matter what the situation is. So I'm gonna play their words and let them explain it. If you're interested to learn more, go to VanceCrowe.com and click on the IBC course for Interest-Based Communication. Also, Christmas is just around the corner, and if you have been thinking about what could I give as the perfect gift, you can always give a legacy interview. This is where I sit down with your loved ones to talk about their lives so that their history can be captured and future generations can hear their voice, see the way they interact with the each other and tell their great stories. And that way you have it forever. And if you're interested to learn more about Legacy Interviews, of course you can go to Legacy Interviews dot com. Alright, now on to Broadview Capital. My name is Heath Hunter. I'm a managing director at Broadview Group in our business, your success is dependent on how you're able to effectively tell your story to relate to your customer or your potential partners, and we needed a course that could train our staff on how to do that. I was looking for something much less than what Vance delivered.

Ad segment / testimonials (multiple voices) [00:50:03] I literally just wanted him to come in and help us a little bit with storytelling. And he came back with this curriculum, which was awesome. How to craft a memorable introduction, build a story around our firm and how we personally weave into that story. How do we continue the conversation through asking good questions, how to negotiate in a collaborative way versus a competitive way so that we maintain that relationship that we've worked so hard to build. Our relationships are everything. To me, Interest-Based Communication is really understanding the perspectives and the point of view of others, being able to meet them where they are. Interest-Based Communication to me is creating a dialogue with someone else sitting across the table from you. It allows each party to really describe what they care about and work together to accomplish that for each party. A lot of people, myself included, before I took Vance's class, really went in with higher weight on what was important to me. Everybody has a tendency to just focus in on the price, but there are hundreds of other components that come into something as complex as a transaction for a company. What are they actually interested in? What do they hope to achieve and what does success look like for them walking out of a negotiation? Those could differ widely from how they're showing up. If we can somehow get on the same page, you can create these collaborative solutions that are a win for everyone, we've definitely woven that into the process.

Ad segment / testimonials (multiple voices) [00:51:36] We're trying to ask those deep probing questions on what are their motivations, what do they care about? Really understanding who they are, introducing yourself to better communicate who you are and your background. What makes a good introduction? This is something that I, I really appreciated and I've been in the workforce for, you know, 27 plus years and done lots of introductions. I've heard lots of introductions, making a good introduction. I think everyone just assumes that you should just kind of start talking about yourself and go into your title and what you do. And frankly, that's typically not very memorable or interesting. Going through this course and learning about storytelling and the arc of a story and how to embed that in your introduction was honestly like nothing I'd ever heard before. And it makes a lot of sense, right? Because if you're a good storyteller, you tend to sort of capture an audience and you want to be able to do that with your introduction, sort of that hook that you need in, in a story. For me, the big thing was having faith that sitting back and really paying attention to the conversation will help draw out a connection. Before I would spend my time trying to, okay, what do I have in common with this person? Oh yeah, this is a chance to interject and, and establish that link. Ironically, just kind of stepping back and saying, I'm just gonna really pay attention to what's in front of me. It really has impacted the conversation because you can get deeper faster. I used to think it was all about how interesting I could come across, but what I've learned, and honestly what Vance taught us, the most interesting folks that you run across, ask really good questions.

Ad segment / testimonials (multiple voices) [00:53:11] That's been a game changer for me. Instead of trying to focus on myself, focusing fully on the other person and really just listening for like, what are the details that they're giving me, because there's a reason that they mention that. We assume that folks can kind of see what we see in our heads. And what this course taught us about diagramming your ideas is to put it on paper, put it out there so the other parties can see it. We were meeting with a group that week and we were trying to communicate different ideas and outline a vision for this potential business. Instead of doing it in a PowerPoint format, we did it on a whiteboard. It was transformational. The CEO he, he just lit up. We actually handed the pen over to him and we said, Hey, show us where we've got it wrong. Show us where you have additional ideas, the level of engagement, you know, went through the roof and he got up and you could see he was almost giddy. Having that limiter of the speed of your hand, you're bringing them along in, you know, your idea you're trying to convey. So the practicality of the course, the mirroring, the diagramming, the exercises. I think that's one of the things that I appreciated most about the course. Super candidly, I've been through a lot of these in my career and you walk out of there and you're like, well that was a waste of time. What I can tell you about what Vance brought to the table. I, at no point ever felt that way. I was able to walk out of every single session and put to work immediately what we had practiced that day. He has a great way of connecting concepts so that you have this, you know, holistic framework, so to speak, to connect with people, which is something that we do all the time.

Ad segment / testimonials (multiple voices) [00:54:42] But deliberate practice of it really helped up my game. I would recommend that everyone take this course and I would venture to say that this has been more impactful for me at home than at work. Pretty much everybody is having conversations and negotiations at home. I feel super lucky and blessed that we were able to have this course at work and that it sort of bleeds into home life. I think that's kind of the best of both worlds. Any corporation or any firm, no matter what the size I think would benefit from something like this, who I'd recommend this to, is a small group of professionals who are really dedicated to self-improvement. Interest-Based Communication to me is a holistic way to build relationships. Can benefit anyone.