(upbeat music) - Hello, and welcome to "Farm Connections."

I'm your host, Dan Hoffman.

On today's episode, we visit R&S Grain, check out their fabrication facilities, and learn the history of this bi-generational company.

We have a conversation with Megan Roberts about succession planning, and the University of Minnesota Extension provides us with a new "Best Practices."

All here today on "Farm Connections."

(upbeat folk music) - [Announcer] Welcome to "Farm Connections" with your host, Dan Hoffman.

- [Announcer] "Farm Connections" is made possible in part by.

- [Announcer] Minnesota Corn Growers Association, working to identify and promote opportunities for corn growers, enhance quality of life, and help others understand the value and importance of corn production to America's economy.

EDP Renewables North America, owner-operator of Prairie Star and Pioneer Prairie Wind Farms, Minnesota and Iowa.

EDPR wind farms and solar parks provide income to farmers and help power rural economies across the continent.

- [Announcer] Northern Country Coop, a full service cooperative in grain, agronomy, feed, and lumber.

For the latest news, job openings, and podcasts, you can go to their website, ncountrycoop.com.

- [Announcer] R&S Grain Systems, a family-owned business serving its customers for 50 years with leading designs in the manufacturing of grain-handling equipment and grain storage systems.

You can call 'em for a quote today.

- [Dan] Welcome to "Farm Connections."

We're in rural Dexter, Minnesota with R&S Grain Systems and Wayne Dietrich.

Welcome to "Farm Connections," sir.

- Thank you, Dan.

- This company has a long history, and it's a family history.

Tell us more about it.

- Well, it all started back in 1972.

My parents were hog farmers and crop farmers.

And now this is a story that my dad told me.

So he's gonna say that I got it all wrong, but I'm gonna paraphrase.

He needed a new grain dryer, so he got a hold of Butch Marquette from Marquette Grain Systems up north of Claremont, got a price from him.

He was looking for a used one, but all he had was new.

And Butch said, "Well, how's the price look?"

He said, "Well, it looks really good, but I just, I can't afford that."

And he goes, "Well, have you ever thought about selling bins for a living?"

"Well, yeah, I could do that."

So he said, "You keep the dryer, and we'll work something out."

And then that's how R&S Grain started, and they were lifelong friends from that moment forward, worked together on a lot of jobs.

And then eventually we, our businesses got bigger, and then we were separated out and went out on our own.

And that's the short version of R&S Grain.

- Short version because the history really is how many years long?

- Right, 50 years long.

- 50, so five decades.

- [Wayne] Yep.

- And your parents started it and now you, the second generation, and your sister.

- [Wayne] Right, we purchased it seven years ago from my mom and dad.

- What does R&S Grain Systems really do?

- Well, we're actually two businesses.

We're R&S Grain Systems and R&S Install.

R&S Grain Systems manufactures grain-handling equipment.

R&S Install installs the grain equipment that we manufacture.

But we also sell to other vendors, other millwrights that put it up, and we sell to farmers and stuff.

And then we also, to provide a service to the community, is we have a shop that we can fabricate specialty stuff for farmers, or if their field cultivator breaks down, they can bring it over, and we can fix it for 'em.

- So grain comes in fairly wet from the field, sometimes anywhere from 15 to 30% moisture.

- To 30%, yep.

- So your equipment has to be workable and durable under a lot of conditions, correct?

- Yep, yep, when we sell a system to a customer, we ask them questions like do you dry your corn down in the field?

Do you dry it in a dryer?

And then we size the system according to that to make sure they have enough air in the bins to keep the grain in condition and make sure that the leg can dump fast enough to meet their needs in their combine, their equipment that they have out in the field.

- What does a leg do?

- A leg takes the grain from the bottom and elevates it up, and then it goes down through downspouts or drag conveyors to fill the grain silos.

- Certainly you demand some skills and some technical expertise for your employees.

What kinds of things would a worker in your business need to know how to do?

- They need to be familiar with hand tools, forklift operation, running brake press, running multiple shop equipments, welding.

And then as far as R&S Installation side, kind of a working background of how grain systems work and stuff.

But we're open to train people, too, to get things to go.

And that's what we end up doing a lot of, is hiring people that don't have the qualifications and then just train them in and try to entice them to stay.

- [Dan] Well, they might have to know something about metallurgy.

They might have to know something about chemistry.

They might have to know something about design, engineering, loads, tensile strength of steel, right?

- [Wayne] Yep.

- [Dan] And basically safe operation of some very sophisticated equipment.

- [Wayne] Yes.

- What's the most sophisticated piece of equipment that's in your shop?

- Oh, it's probably a tie between the laser and the new brake press that we just purchased.

The laser's the workhorse of the shop.

All the metal goes through that to be cut and stuff.

It can cut anywhere from one-inch thick down to however thin you want.

The new brake press is, Bruce Fisk gave you this, enter in the thickness of the material.

You draw a picture on it, tell it what angle you want, and it'll bend it to that.

And it has lifting arms to help bend big sheets.

So, between them two.

- [Wayne] Sounds very expensive.

- Yeah, they are.

- Well, behind us is a piece that you spoke of earlier.

What is that?

- That's our first shear and brake that we had.

First it was a shear.

My dad bought it from a junkyard, and we hooked up a hydraulic cylinder to it.

And we had the 3020 John Deere tractor sitting outside the shed and a lever that went out and run the hydraulics to shear.

And I remember the one night we were sitting in the house, me and my sister, my mom, and he came running in.

He had a piece of metal that he had broke, and he said, "I made it.

I made a press brake."

And that's what you see on the back of that, is a little press brake thing for forming 'cause we could shear things, but we couldn't form anything.

So he was pretty proud of that moment, so.

- And you still kept it?

- Yep, we still kept it.

It's made a trip from here to Arizona to my folks' house down in Arizona to build a fence.

And then it made it all the way back here.

- Innovative people, I've gotta say.

- Scrap steel is expensive, but we just couldn't part with it.

- Have you had challenges from any place with getting product or getting your inventory in to make your product?

- Yeah, this year.

Last year wasn't too bad, but this year's getting a little harder.

Some things are two, three months out, and then other things, you'll call and order something, they got 100 of them on hand.

And a month later you go to order it, and they got none, and they're three months out, and doesn't seem to make a rhyme or reason as to what the parts are, either.

It can be a little micro switch, or it could be a gear drive.

- No doubt you've had some challenges keeping up with the demand different times.

For example, let's say you can't keep up.

What have you done to compromise or to move forward?

- Well, when originally in our shop, we had two turret presses and two shears, that's how we made our drags and legs.

And it took four people, a person on each one to run that.

And then probably 10, 12 years ago, 10 years ago, maybe, we bought a laser, which replaced the two turrets and two shears.

And one guy could run that.

We didn't get rid of the other three guys.

Them other three guys went to run the press brake because the laser was running product through faster.

So we needed somebody full time at the brake press.

So we didn't lose any employees, but we gained production by updating our machinery.

- Nice.

In a rural community, especially a smaller community, what value do you bring?

- Well, like right now, we're in full mode making equipment.

And when a farmer comes in, something's broke down, we stop making our equipment, and we fix that and get that going for 'em right away so they can get back out because if we know that if the farmer isn't out in the field putting the crop in, they're not gonna need the equipment we're building.

Repairing equipment is not a big moneymaker for us.

It's more of a service to the community.

- Wayne, working with family is really amazing in a lot of ways.

It gives rewards, but it's also extra work.

Can you talk to what value you find in working with family in a business?

- Well, working with a family in a business, it seems like everybody's on the same page.

They wanna make the business succeed.

That's the goal of owning a business, is to be successful.

And being part of a family business, I think it gives you a certain amount of pride that you don't get when you're working somewhere else.

And maybe that's why I chose to stick it out in R&S Grain and to continue on.

I remember we used to farm.

Must been 25 years ago we quit.

Our bin site, which is back here, there's a bin foundation there yet, it blew down in June.

Tornado came through and took it down.

So we had to haul all the corn to Dexter Elevator, and my mom and dad said, "We just don't wanna farm anymore, but you can go ahead and keep farming."

And I had been thinking a couple years previous to that, it would be so fun to work at R&S Grain through a complete fall without having to go do my farming stuff.

So I said, "No, let's just get out of it and let's just concentrate on one business instead of two businesses."

And I haven't so much set foot in a tractor since.

- [Dan] We're in the corporate office of R&S Grain Systems in Dexter, Minnesota, and with me is Carmen Howe.

Carmen, welcome to "Farm Connections."

- Thank you, Dan.

- And thanks for letting us be here, right here in the office.

- It's a pleasure to have you guys here.

- Well, what do you do here?

- Well, I am what you would call in corporate headquarters, the CFO.

I manage accounts payable.

I manage accounts receivable.

I manage the customers.

And anything that Wayne needs help with with bidding process, I am the go-to on that.

- Very important work.

- Yes, yes it is, and it's very enjoyable.

I really enjoy my job here at R&S Grain.

- So you are a detail person.

- I am a detail person, and I like to be in control.

- Well, without that, what happens?

- Chaos, chaos happens then, and I don't mind if a little chaos does happen.

I'm quite happy to figure that out and manage a situation as well.

- Well, how has your job changed?

You've been here about how many years?

- I have been here full time since 1986, but of course, Dan, you realize I was born into this job here, or born into R&S Grain.

But 1986 was when I became a full-time employee here, and then I was an administrative assistant.

My mom was the what we would call the CFO of R&S Grain.

So whatever she needed me to do, I was bookkeeping.

I was payroll.

I was out on the job working, whatever the company needed at that time, so.

- And that helped sustain it and grow it.

- Yes, it does.

Yes, and when you know the ropes from the manual labor up through the managerial part, it makes your job easier knowing that.

- Is it safe to say you didn't start at the top?

- It is very safe to say that I did not start at the top, Dan.

- [Dan] So you really earned your position.

- [Carmen] I feel I earned my position, yes I do.

(laughs) - [Dan] And you were mentored and taught by the best, right?

- I was mentored and taught by the best, yes.

- So what happens if accounts receivable doesn't work right?

What happens to the rest of the business?

- Then if the accounts receivable doesn't work right, there isn't cash flow, and therefore we struggle to keep the doors open.

So it's my job to make sure that the customers get what they need, that they pay their bill, and that I have overhead to run the company.

- Employees really like to get a regular paycheck, right?

- Yes, they do.

They do.

Every other Thursday, they look forward to that, so.

- Have you ever thought about the ripple effect that you have and this business has in the community?

I mean, for every dollar you put into a paycheck, how many times does it bounce around outside of this business?

- Yeah, oh, I think about it all the time, especially when we're in a tight spot with accounts receivable, and I don't have that, or we struggle to get that paycheck out to the employees.

First of all, it impacts the company.

Second of all, it impacts the employees and their families.

And then like you said, third of all, it impacts the cash flow out into the local community and into the economy alone.

So yeah, I do think about that a lot, that once we earn the money and the employees get it, it's important for the economy that it continues to flow out.

- Definitely, research shows sometimes that dollar is leveraged about seven times in the community.

And I especially admire your business when you take basically a raw product of steel, put some design to it, put some fabrication to it, warehouse it, sell it, put it into a bigger piece of grain-handling equipment that's important for feeding our nation and the world beyond.

So you're really taking almost nothing and making it into something quite significant.

- Correct, that allows other people to, as you said, earn a dollar and put it out there in the community.

- When you think about that, isn't that a little bit awesome to you what your family does and has done?

- Yes, I've always been very proud, very proud of what we do, yeah.

- What's your hope looking forward in this business?

- Hope looking forward into the business, as you probably know, we do have other family members in here, my daughter included.

Courtney Stejskal is my assistant in here, and Wayne's son Joshua is here in the office as well.

So our hope is to do a third-generation easy pass onto it.

As with any business, it has to make changes according to the needs of the community.

Right now we're hanging in there with installing our equipment, but future, we would really like to strive to just marketing our equipment and having the welding shop and having other millwrights purchase our equipment and install it.

- It looks like you're well on the way.

- [Carmen] Yes, yes, we're trying.

- [Dan] Carmen, thanks so much for the good efforts.

- [Carmen] Thank you.

- [Dan] Stay tuned for more on "Farm Connections."

- [Announcer] "Farm Connections Best Practices" brought to you by.

- I'm Dave Nicolai, University of Minnesota Extension educator in crops.

This is today's best management practices in crops.

We're here at the month of June.

We wanna talk a little bit about some of the best management practices, and today I'd like to talk about three of those that make for successful weed control for growers in Southern Minnesota.

One is an opportunity to go out into the field, number one, and identify the weed species that you have so you can match that up properly to your crop protection label.

Number two is to take a ruler with you and take some measurements so you can determine the average weed height that you have out in the field and compare that to the recommendations on the label.

Oftentimes growers have difficulty when applying a post-emergence herbicide with weeds that are too large, depending upon the label situation.

The third thing is to look at the weed density or the weed canopy that you have out in the field.

What we hope to do there is to provide good adequate coverage across the wide spectrum of different weeds so we have adequate control and yet reduce the amount or potential for drift.

If you have an opportunity to scout your fields prior to making a herbicide application and/or cultivation, it's good to know what types of weeds typically we run into in Southern Minnesota.

Typical weeds include velvetleaf, lamb's quarters, foxtail, common ragweed, as well as giant ragweed.

And of course, there are other weeds, purslane and other weeds that can come into the field as well.

But being knowledgeable about how to identify these weeds is really essential for efficient weed control.

- [Interviewer] Pigweed, waterhemp, you wanna say something about that?

- Redwood pigweed and waterhemp are similar weeds in terms of weed species that we do find in Southern Minnesota.

Waterhemp is a particular concern because of the biology of that particular weed allows it to emerge not only in the spring of the year, but well into the summer and even into the late summer, into the month of August.

So it's really important to try to use a pre-emergence herbicide, maybe two applications, or what we call layering, as well as a timely post emergence for control of waterhemp, especially if you're in a rotational field situation.

One of the concerns that we have from growers is why do we need to determine individual weed species?

And we really have to look at the particular label.

In a lot of situations, that herbicide is a costly input.

We wanna make sure that we match up correctly the weed species with the label in terms of control.

And in addition to that, we also have to match up the height of those weed species.

So really two things that growers have to keep in mind here is weed species identification and also weed height in proper timing for successful post-emergence weed control.

I'm Dave Nicolai, University of Minnesota Extension educator in crops, and this was best practices for crops.

- Welcoming us today is Megan Roberts, an expert in succession planning for farm families.

Megan, you've got a lot of work to do.

Tell us about it.

- Well, we know coming up, there will be more transitions between generations in farm families than ever before.

We have a lot of Baby Boomers that are reaching retirement age, or if they don't wanna retire from farming, they're certainly thinking about what might happen next.

And it's really important to keep farms operational.

There's a big economic impact on communities and certainly economic impact on the families themselves.

- Our entire state, our nation, really, is based on agriculture.

- Certainly, we see a very strong economic impact of agriculture across Southern Minnesota.

We know that having small, medium, large sized farms in our communities is important to rural main streets.

And we know that there's an important family and lifestyle importance of having farms in our communities and transferred through generations.

- You mentioned earlier the steps in the transition succession planning process.

What's the first step?

- I think for educators and folks that are more on the educational side, like I am, not the legal side, it's really about goal setting.

Can you identify what it is that you want to happen to your farm in the future, or if you're the incoming generation, what's your vision for that future of the farm?

And then can you articulate that in a way that a legal professional or a tax accountant professional can then work you through the steps, the paperwork side of things?

But from a family perspective, the very first thing is goal-setting.

- So from goal-setting, it sounds like you're bringing some other team players in.

Why is it important to include those team players like the CPA, the accountants, or the bankers or farm management instructor?

- It's because while a farm is a, oftentimes a very important family aspect, there is a business aspect of the farm.

And many farms have assets that they need to think about how they would transfer to that next generation.

Are you going to buy, sell, gift, what have you?

And from that perspective, you need to have those legal and tax professionals involved.

- Well, it sounds like every action that's taken has an outcome or a consequence like taxation, right?

- That's true.

- So what do we do on the tax side?

'Cause that seems to loom big in ag producers' minds.

- It does loom big in tax producer's mind, I think.

The number-two question I get about farm transition are taxes and then probably nursing home concerns.

What happens if I need long-term healthcare?

Will I lose my farm?

And there's no easy answers to either of those two questions.

I like to bring people back to maybe some of the bigger picture.

Let's not lose the forest for the trees.

What are your overall goals?

And then once you identify them, how can we move it to the nitty gritty of, be it taxes, long-term healthcare planning, retirement planning, et cetera.

- That's a lot of things to keep balanced and talk about.

- It is.

- Tell us about the people you bring to the table inside the family.

Obviously you talked about the exiting farmer or the retiring farmer and the emerging or beginning farmer.

How about spouses, family members?

And when I say spouses, it might be a male.

It might be a female.

- Absolutely, so I like to advocate anyone that is actively involved in the farm operation is at the table, including their spouse.

So if a daughter is farming actively in that operation, maybe her husband is not out there doing the farm work, has an off-farm job.

Because of that spousal relationship, it's key to bring people in.

That's my opinion.

At the end of the day, everyone knows their family better than I do, right?

We're all experts in our own family, and so I do leave that to the discretion of the individual farm families, what do they feel are the key people to be at the table.

But I do lean a little bit more towards inclusion and extra communication than excluding folks.

- Understandable.

And sometimes we get into strife situations.

Do you find that having a moderator or a person outside of the family helps with that?

- Certainly, sometimes when, whether it's grief, whether it's a financial issue, whether it's just a family disagreement, it can be really helpful to bring in outside experts.

That might be a mediator, a formal process of mediation.

In the state of Minnesota, we're really fortunate to have rural mental health specialists, and they are getting more and more calls related to spousal issues and then farm transition issues.

And so that can be very helpful.

I also sometimes find that, at least from the financial standpoint, not sometimes, I definitely find from the financial standpoint, farm business management instructors can be a really key part of the conversation for families.

So it might vary from situation to situation, but certainly bringing in outside facilitation can be very helpful.

- Megan, you've referenced farm business management instructors on several occasions when we visited.

Where can a farmer or a family go to learn more about an individual or an organization they can reach out to?

- Absolutely, here in Southern Minnesota, you can check out the Southern Agricultural Center of Excellence website, centerofagriculture.org.

- Stay tuned for more on "Farm Connections."

(tranquil guitar music) Well, that about does it for today.

Thanks to R&S Grain for allowing us to get a look behind the scenes of what it takes to make your family-owned company a multi-generational success.

I'm Dan Hoffman.

Thanks for joining us on "Farm Connections."

(upbeat folk music) (upbeat music)