Replicating success through insights

Farm management on behalf of institutional investors

Over 283 million acres of US farmland is owned and rented out by nonfarmers and, with 40% of farmland owned by seniors 65 years or older according to estimates from the USDA, it is expected that the trend of nonfarmers buying and renting out farmland will continue. For institutional investors, farmland forms an attractive asset class with solid and stable returns each year, and a steadily increasing asset value. Where some institutional investors buy land and then rent it out to farmers, others decide to have the land managed on their behalf by a farm management company. Instead of just receiving annual rent checks, this offers the investors exposure to the risks and rewards of farming.

One such farm management company is Yakima, WA based NWFM. Owners Keith Veselka and Greg Newman, bringing a combined 40 years of crop production experience, established NWFM in 2018 with the aim of offering full service farm investment and property management to institutional and sophisticated investors. Keith explains: “I’m originally from Texas and, after starting my career as Nuclear Operations Officer in the United States Air Force, moved to Washington as that is where my wife is from and her family farm in this area. I started off here helping manage the family farm and after a while had my own acres to look after as well. A few years later I got in contact with some investors who needed their orchards managed, and that’s when Greg and myself established NWFM.”

Keith continues: “I met Greg Newman, a local agronomist with a wealth of experience, and being in business together is a great combination for us as we have very complementary skill sets between business management and agronomy. We now have over 1,300 acres under management with 500 acres of cherries and the rest is mostly apples with a few acres of pears too. We are growing quite rapidly still as our seasoned farm management skills and cooperative buying power combined with our service level is very attractive to investors active in this area. We have purposely invested a lot of time and effort in creating a good team, procedures and systems so that we’re set up for sustainable growth that allows us to maintain our service level.”

Collaborating on Agworld

Keith had been using Agworld on his own blocks for a number of years, while Greg had already been using Agworld as an agronomist with Bleyhls Farm Service in the local area, so it was only natural to adopt Agworld as soon as they established NWFM says Keith: “We were both already familiar with Agworld from our own perspectives and we really like that we can do both the farm management & record keeping side as well as the agronomy side of our business on the same platform. This saves us from double-entering data, which can easily cause errors and inaccuracies, especially since it’s not only the two of us but some of our staff that are involved in utilizing the Agworld platform too.”

Keith explains: We have over 100 full-time staff, with up to 600 additional seasonal staff for picking and pruning, and 10 of those use Agworld as well. Our process starts with Greg writing the recommendations for our applications. We then use that data to put out bids based on the volumes we think we will need. This is where the data from Agworld helps us aggregate product-use projections across all our different blocks and buy these products at the best price possible for us, and thus for the property owners.”

“Then, once we start applying inputs, we have 2 orchard area managers and 3 foremen who utilize Agworld to input the data of the applications after the work orders have been created and the products have been applied. After that, at the tail end of this process, our office staff use Agworld as well to help them with the invoicing process. As you can see, due to the size of our operation, there are many people involved in the different steps of the process. Because Agworld allows all of them to collaborate on the same platform, it really makes everyone so much more efficient.” Gaining insights in application costs

Managing a variety of orchards for different investors means that creating accurate records for every block in every orchard is key for traceability as well as analysis purposes according to Keith: “To me it’s simple: if you can measure it, you can manage it. We need to record what we’re doing at all times and be able to share this with a lot of third parties such as warehouses, investors, food safety authorities and GAP certification agencies, so doing things on paper won’t work for us - it’s just too cumbersome. Once we started to use Agworld, we haven’t looked back as Agworld provides the kind of fidelity of information that we’ve never had.”

Keith continues: “With Agworld we not only track our spray recommendations and applications, we also track our inputs by classification, by costs, etc. To me it’s a big deal to know exactly what we’re spending per spray so it can help us make better decisions in future. When you compare making an informed decision with Agworld to saying ‘let’s just do it and we’ll figure it out later’, I know what my preferred course of action is! Because we have all our data at block level in Agworld, we know exactly what our input costs are and how much it costs to farm each individual block.”

Keith concludes with: “We use data from Agworld when we do a ‘deep dive’ on costs in terms of sprays etc., and because we have all that information already available to us, it makes it a lot quicker and easier for us to do these kinds of analyses. We are spread pretty far and wide over many acres in the valley here and, because we have all our data in the cloud now, we can analyze our data remotely instead of having to be right there at a specific location. Instead of combing through paper copies and breaking down the data manually, Agworld helps us make this process so much easier. The platform is especially useful when you come into budgeting or if you’re successful with a certain crop management program - when you try to replicate that success at other blocks, the insights from Agworld help you achieve that much easier than if you had things scribbled down on paper.”