A letter from our friend, Pat Nichols – Land Link Issue #9

Some thoughts on buying farmland near St. Louis

 

This essay is an encomium to my beloved friends, Drennan & Lauren Bailey, their son Taylor and their business, Bailey Properties.  (Note to reader:  I selected the pretentious word “encomium” to ensure that Drennan, in his effort to censor my text for public consumption,  is driven to the dictionary no later than the fifth).

 

First let me list my credentials for this report: I left journalism to go into rural real estate.  I later left rural real estate, and rural America, in order to go to graduate school.  After graduate school I became a political economist for a think tank.  (I had studied the politics.  The economics I made up).

 

I left that field to do market analysis, and then marketing, for Price Waterhouse. (For time context, this all occurred before PW acquired Coopers & Lybrand (take that Coopers!) but somewhat after Noah’s flood).

 

That information will be useful for several reasons.  First, you’ll know that I come to this essay from several relevant angles–as a reporter, a former real estate broker, a country boy (since dreadfully citified), a political analyst, a quasi-economist and market analyst. Second, you’ll realize that I have failed at a staggering number of professions. Third, you’ll know that Drennan, who entered rural real estate more than a decade after I left, waited until the profession had largely recovered from the damage I had done it.

 

Drennan grew up with a love of rural America and the farm life.  He was raised in St. Louis (well, actually in the very posh suburb of Ladue, so don’t let him give you the country-boy-up-by-the-bootstraps crap!) but the family frequently commuted to their farm near Kirksville, MO.  He went to college at Westminster College in tiny Fulton MO, a wonderful institution where I had already spent a year challenging the faculty’s tolerance with my pomposity. Drennan joined me a year later to offer the faculty a very different kind of challenge. (He’ll have to tell you those stories!)

 

After college Drennan moved to Kirksville and to the old farmhouse.  He was joined, later, by his new wife Lauren who realized that, having agreed to marry Drennan, she was in no position to start being discriminating.  (Have Lauren show you pictures of how she transformed the home; her efforts on Drennan were, and remain, less successful).

 

Drennan and Lauren not only managed the farm successfully but grew it dramatically.  I know this because half the time when Drennan and I made plans to get together somewhere he would cancel them to scrape together the down payment on another patch of farmland he had bought without knowing how the hell he would finance it.  (People, if you want advice on creative financing, Drennan is your guy.  He can also explain to you why you should NEVER fall so desperately in love with a farm that you put it under contract without informing your spouse.  Again, he’ll have to tell you the story).

 

That farm produced more than corn and beans.  The environment was sufficiently fecund (dictionary trip #2, I hope) to produce four magnificent offspring (Lauren’s parenting having clearly proven a more than sufficient to offset any impact Drennan might have had).  Their children are Ashley, now a lawyer; Tiffany, a teacher; Drennan III, a consultant with a global firm which must go unnamed because it is a PWC competitor, and Taylor, the son in the business who sells elevators when he isn’t selling farmland. (By coincidence, my favorite Ashley story involves a crowded elevator and the expression “dirtbag;” have them tell you that one, too).

 

Real estate brokerage started as a side enterprise but it quickly grew. It grew even more quickly when Lauren forced Drennan to quit buying farms and concentrate on selling them.  When Drennan and Lauren decided to leave the farm they hired managers, returned to St. Louis and settled into their wonderful niche—investment and get-away farms for urbanites.

 

The only remaining major development in the history of the Bailey Properties is that in {year} Lauren left her teaching job to join the company full time.  The combination of their talents (no joke here) marked the breakthrough year for the company.  (Oh, I did forget to relate that Lauren taught pre-schoolers {?} for X years, in addition to helping with the business and being a mother to four.  In {same year as above} she concluded that her time with pre-schoolers had prepared her for full time engagement with her husband, his being, at 55, the equivalent of 11 five-year-olds).

 

So, from that brief history here’s what we have:

 

  • An investment (farm real estate) famous for holding its value
  • One that, unlike precious metals and other sanctuaries of value, is also a sanctuary for people, and a joy to own.
  • A founder who grew up in the business, managed and grew farms, wins the love and trust of everyone he knows and will become not only your broker but your least conventional friend. (If Drennan ever strikes you as reasonably normal he is having a bad day; go home and come back tomorrow).
  • A family whose qualities of joy, integrity, and mutual commitment will write themselves indelibly (dictionary #3?) on your hearts.
  • Finally, you have a testimonial from an utterly credible narrator. (Well, four out of five ain’t bad!).

 

If you have even an inclination to consider a farm investment you owe it to yourself to call Drennan, Lauren or Taylor.  This will not just be an investment opportunity.  It will be a life adventure!

 

Good luck.  And tell me how it works out.

 

From our dear friend Pat Nichols.

Bass Fishing Management – Land Link Issue #8

As most of us are hunkered down with the Corona stay at home orders there are some of us lucky enough to be able to spend our time doing what we enjoy and that is being outdoors in the country and for me and my family we have been spending lots of family time fishing. We have fished some very neat clear flowing creeks and streams for some super fun smallmouth bass. Some of the fish caught on these streams have been pretty nice and are a lot of fun to catch. We of course release these sport fish. Being in the land brokerage business for over 35 years I have sold many farms with some nice ponds/lakes on them and the owners always invite me to fish. Many of the ponds are owned by absentee landowners and they always ask how the fishing was.
Taylor was out in a pond last evening and he said they caught a lot of fish but they were all the same size. I started thinking what a great landlink blog. We have a nice fairly large 15+/- acre lake in N MO which has brought so much fun and enjoyment to our family and I started going through my files and I must have forgotten how much management and care it takes to have a perfectly balanced lake. First of all what is the difference between a pond and a lake. Really there is no set rule. Many people consider the size but again no set rule. Some have said that with a pond sunlight can reach the bottom of the pond and enable grass growth but again no rule. I guess it is the same answer as what is the difference between a farm and a ranch. Lots of people consider the size but in Texas I have seen many 30+/- acre places called ranches so I guess it is totally up to the owner to decide; pond or lake.
There are going to have to be several Land Link blogs with all I have uncovered with pond and lake management but for right now why are we catching so many fish the exact same size? Most of the ponds in Missouri have been stocked with a combination of largemouth bass, bluegill, and channel catfish.  There is a difference in stocking rates in the state because of differences in soil fertility. The maximum stocking rate provided by the conservation department is 100 largemouth bass, 500 bluegill and 100 channel catfish per surface acre of water.  Natural reproduction is adequate to replenish those fish removed by fishing (except catfish) providing the pond is properly managed.
 At our farm lake which is a great example of fish mismanagement  we did a fish survey on the lake which amounted to boating around the lake with electric shock being sent into the water and temporarily shocking the fish netting them and then counting the different numbers and species to come up with our fish survey. The following is the recommendations by the Conservation Dept for our lake which I think is very typical of most lakes and would be a good recommendation for others with lakes: “With this excessive vegetation it makes it hard for the larger bass to find food.  The result is a lot of small, hungry bass. There also needs to be harvest of a lot of those bass under 12 inches long.  Whenever your friends or family fish the lake, keep bass 12 inches and under, up to your daily limit of 6.  Do not keep bass between 12 and 15 inches long – release these right away. These larger fish are needed to eat the small bass, bluegill and crappie and return the pond to a balanced situation where fish of all sizes are present. Continue to keep bass under 12 inches until you notice that two or more of ten bass you catch are over 12 inches.  Removing 300-400 bass this year would not be too many!  In other words, invite people over to fish your pond!  Again, even with heavy fishing pressure, you may not notice results for 3 or 4 years.” In other words a lake needs to be fished hard and many fish need to be culled. So get ready for the fish fry and see if you can get your lake in property balance. More pond management will follow in future Land Link blogs. There is so much to be learned and nature is so incredible. It is truly the wonder of it all.
I have also attached a copy of a fish survey for those interested.

Thank you,

Drennan Bailey

Who would of thought? – Land Link Issue #7

Well readers I am or we are all still locked up and it is impossible not to look at what the stock market is doing or how we are all going to fare when we are released from our homes. The one thing that I have thought about is that this is really the third time that I have experienced this economic disaster. There was the farm depression in the 1980’s the 2008 economic disaster and now the Coronavirus. The one that made the biggest impact of my life so far would have to be the 1980’s and the farm depression which many believed to be as bad as the Great Depression for farmers. I had just bought a 500 acre farm for $500 per acre with a FMHA loan and everyone kept telling me how smart and rich I was going to be. Who in the world would have thought that we would have embargoes and in a year’s time the land would be appraised at less than $100 per acre. I was flat out broke with a wife and two kids and another on the way. There were so many great people who lost farms and families broke up. It was hard as the disaster was isolated to the farm economy. We would take trips to the city and everyone was living in their newly made up work McMansions. The city people were going gangbusters and they could not nor would not relate to the problems on the farm. The government tried to save as many as possible with their CRP, PIK and loan programs but for the most part the money and programs were quickly hijacked by the people in the city with their flush money and they bought the land and capitalized on the government aid. Today we have everyone involved and it is still too early to see where the money ends up. As in the 80’s there were families that suffered and lost everything. Many people thought that this is what happened in a true open economy. The little get eaten by the big but I wonder if this is really true. Today we have the government handing money over to everyone. In a way it is nice if that is the word that we are all in this together and hopefully there will be no one profiting on someone else’s misery. The 80s were hard years and I wonder if the same people who thought that this was a normal economical event to get rid of the mismanaged or non competitive farmers and replace them with better managers would believe that we should do the same now. People think differently when they also have skin in the game. When someone you know gets sick or loses their job it should make you think twice. There were good farmers who deserved to keep farming but lost it all because we were not all in the game.

Thank you,

Drennan Bailey

The Wonder of it All- Land Link Issue #6

Last week I wrote about the basics of fertilization and the reason needed. It seems like once you start reading there are endless questions and you have to at the end of the day just wonder how incredible life and nature is. It all circles around and we have this incredible cycle of life and purpose. I was going to write on GMO and will do it next week. With all the negativity going on with our current Corona situation we can wait for a political and controversial although interesting, it would just add to so many readers stress level and especially where I will be coming from in the conversation. So this week we will talk about on of my fathers subjects and that is the earthworm and now my brain will also have to mention the bumble bees. How can something so small and seemingly so insignificant play such a gigantic role in our ecology?

Everyday active earthworms take in an amount of soil equal to their body weights.  This activity makes a very important contribution to the aeration and movement of soils.  Pasture soils contain three to four times more earthworms than tilled soils.  The weight of earthworm’s in a pasture soil may be twice as much per acre as the weight of livestock carried per acre on the surface.  These numbers are directly reflected in the amounts of soil moved.  In other words earthworms move at least 21 tons of soil per acre in permanent pasture’s each year and this is compared to only 9 tons in tilled ground. (which is another reason we were doing no-till farming as written about in previous land link blog). Earthworms not only move soil, but also make some elements more available for plant growth.  When earthworm excrement  is compared to the top 6 inches of soil, the excrement contains five times more nitrate nitrogen, twice as much calcium, almost three times more magnesium, seven times more phosphorus, and 11 times more potassium than soil. The excrement’s also has a higher PH than surrounding soil.  The return of animal excrement to the soil increases the number and individual weights of earthworms present in a soil.  This is extremely important in a pasture with regard to the breakdown and decomposition of animal manure.  To sum it all up; when a pasture ecosystem is working well, it contains large numbers of earthworms and other organisms that rapidly break down and decompose the organic matter of manure, releasing the nutrients it contain into the cycle again.
My father had an incredible close affinity with the natural order and the bounty of this earth brought him into touch with the essentials of life.  He was always so impressed and excited how millions of earthworm’s on each acre of the farm were working while we were relaxing.
Now one who cares for the created order, who sees beauty in natural things is one who tends to see the whole of things. Dad was incredible always asking the question, pondering the answer. Looking for the relationships, how things tied together. He was an incredible man and enjoyed so much the glorious creation that god has given us. The wonder of it all!

Thank you,

Drennan Bailey

No till farming – Land Link Issue #5

As planting time arrives and the tractors are rolling I remember when we first started No Till farming and we were really one of the first to do so and this was in 1979 in fact I was awarded the conservation farmer of the year in N MO that year. No till farming or as it was called back then, trash farming is the process of farming by slicing the dirt and planting the seed in the soil and then covering it up with a roller. This replaced the plow and the many trips over the ground with a disk or other implements. With No Till farming you plant into the left over stubble from the previous year and the idea is to keep the soil covered up and to prevent as much soil erosion as possible. It is a common thought that you could easily lose an average of 3 tons of topsoil every year due to erosion and for anyone that has been to New Orleans you can see half of the state of Missouri in the Mississippi delta. . There are so many topics on erosion and conservation which I will devote to future Land Link articles but for right now my point is that when we started No till farming we had been told that we are one inch of topsoil away from extinction. There are of course trade offs with everything and one is that with No Till farming you have to rely alot more on chemicals and there again are so many future Land Link articles that can deal with this and again that feeds to my obsession with owning land with clear clean water but for right now we are talking the basic of erosion and how important that one inch of soil is. Please read the following article as I thought it was fascinating and thought provoking. Thank you and everyone hang in there. The Corona is here but there have always been problems but the sun always comes up the next day.

Thank you,

Drennan Bailey

Post Cards.. So tacky! – Land Link Issue #4

Hello everyone and thank you for reading our latest Land Link. This is kind of a follow up on our last blog of why this is a perfect time to be either selling or buying land. I am constantly amazed by how many postcards I get from what seems like every real estate company telling us how they are the perfect company to sell your land. First of all it is not that hard to become a licensed real estate agent in the state of Missouri and it is not hard to get a list of land owners either by county or area of state. While times are good everyone has a member of the family or family friend that has a license and this is what makes them think that they are now qualified  to sell what many times is your biggest investment and that is your land. When it is good as it has been the last several years and land prices sometimes rise monthly you can see how easy it is to put out a for sale sign and a buyer will come along. It is like an old appraiser told me that as long as land prices continue to rise you will have auctions because sellers don’t want to miss out on the highs. When we are in times as now when there are many yellow flags you will find sellers going more and more to real estate professionals because they don’t want the lows. The key word I used is professional and that is a real estate agent that knows the markets and the land and many times has many connections to make a deal go through. They will be there from start to finish. I have many surgeons and health professionals in my family and I know and I couldn’t imagine any of them sending out a postcard or advertising for business. They are well trained and professional and make their living doing what they know and by referrals of success. Hiring a person to sell and market your prized or most valuable asset should be considered the same way. Interview and ask questions. Get a professional who knows land, knows how to price land, knows how to market, knows the business and most of all that you trust and that will fight for you to get every dollar that the farm can get not just to talk you into taking an offer because they need to make their house payment but to get a contract that works for you the seller. I would never think I am the best at selling a home; I just don’t know the market, the regulations, the codes or the people to network with. I do however feel that I, as are some of my friends in the land business, know this land business better than most and will work for you in getting all you can get when you sell. Think about it and as in the medical field get a second opinion when you list or have questions.

COVID19 VS LAND SALES Land Link Issue #3

Hope everyone is getting along and is well. I have been asked many times since this Coronavirus and the lockdown began what I think about the land market. Is this a good time to be looking to buy a property or perhaps to sell? There is always a market and there is always land for sale. They may not be making anymore but there is always land that has to be sold.

My answer: it is a great time to either sell or to buy. Land prices are not at the peak of around 2013 but they are definitely high. As most of you that follow me know I have been in the land business for over 40 years and I have seen it all. The one thing is that with the government offering or printing all the money that they will need to make all the payments that they have promised that inflation will come back with a vengeance. This of course will make the dollar very cheap and land prices will go up. With low interest rates this will enable many more buyers to be in the land market. Land and especially farm land has always been one of the prized assets to be in control of during these troubled times as well as gold and fine art. The one thing I caution is that the key is good producing land whether it be in good agricultural, pasture or timber land. These are the prized sectors in the commodity markets which are considered inflation hedges. I would even go so far as to put even recreational land as long as it has good clean water available. Everyone by now knows my love and appreciation of good clean running water which I believe is an asset class all of its own. Yes, we know that land brings all sorts of other qualities such as hunting, fishing and recreational activities but for the investor this is a good time to look into the future of land purchase. One thing I have learned in buying and selling land is that anything that goes up can come back down twice as fast. On the selling side there are lots of interested buyers especially with just about zero interest rates, springtime and people are looking for a safe place to possibly button down the hatches. Go for it and pay down some debt on other land or just get out of debt and relax. The one thing I cannot stress and in my next Land Link is to search out and find a realtor that knows the land business. Don’t just go with your best friend’s sibling. These are critical times and you need a professional who knows land! Check it out in the next Lank Link and be safe out there it is a crazy world. Thank you