“Northwestern Oklahoma Agriculture and Industry”

 Seminar IX

Seminar IX began Wednesday morning as part of the group left from Stillwater on their way to Woodward. The entire class convened in Woodward at the Farm Credit office where we would have lunch later in the day. We traveled to Woodward Livestock Auction from there and met with Jerry Nine, owner/CEO. Mr. Nine purchased Woodward Livestock Auction in May 2000. He also farms near Slapout, OK and began his career in the livestock auction business as an order buyer following his graduation from Oklahoma State University. He has a stocker sale every Friday and a cow sale on Tuesdays. The livestock auction is the 3rd largest in the United States. He has a good reputation in the business and tries hard for customer satisfaction. He won’t push unmerchantable cattle onto people; instead he prefers to purchase the odds himself. His sale barn servicing area includes: Watonga, Enid, Fairview to name a few and has been receiving a lot of cattle from Arkansas and Texas as well. The livestock auction is running at about 6,700 head per week which puts them right in line with the 351,000 head sold two years ago. Since purchasing the auction facility, Mr. Nine has added on to the pens and trailer docks. They charge $3 per head per day to feed the cattle brought onto the facility prior to sale day. Each week there are 10-15 strong order buyers purchasing cattle. Mr. Nine often times purchases the off color cattle himself to keep the market up and works hard to please all of his customers. Not only does Mr. Nine sell cattle each week, but he sells service as well. www.woodwardlivestock.com

Once leaving the Woodward Livestock Auction, we drove over to Terra Nitrogen and met with Steve Moore, David Pierce and Joe Snyder. Terra Nitrogen is a leading producer and marketer of nitrogen products. There are 6 manufacturing facilities located in North America; Ontario, Louisiana, Iowa, Mississippi and 2 plants in Oklahoma. Terra also owns an ammonia manufacturing facility in Trinidad and Tobago and holds a 50% interest in a nitrogen and process chemicals business in the UK. Terra Nitrogen grew largely in part due to acquisition of competitor’s facilities as they went out of business. The Woodward plant is unique in that it produces Ammonia, UAN, Urea as well as a newly added Methanol plant. Terra has the capacity to produce 3.3 million tons of anhydrous ammonia, 3.8 million tons of urea, 775,000 tons of ammonium nitrate, 280,000 tons of urea and 40 million gallons of methanol on an annual basis. Terra is the largest UAN producer in the world and 32% of UAN is shipped from the Woodward plant. The heart of the Woodward facility centers on the ammonia plant. Seventy percent of the cost to run the Terra plants comes from purchasing natural gas to power the facilities. It costs an estimated $9 million per month in natural gas for the corporation. They prefer that the facility runs continually as it costs close to $350 thousand to get the plant back up and running. Terra is currently looking at how to reduce their emissions as they are concerned about how devastating Cap and Trade would be to their corporation. For more information concerning Terra please visit www.terraindustries.com

After leaving the Terra facility, we headed back to the Farm Credit office where they sponsored a great lunch. Concluding lunch, we departed for our overnight stay in Guymon. Once checked into the hotel, we met with Jason Hitch and toured Hitch Enterprises.

Jason Hitch, a member of OALP Class IX, gave us a tour of the Hitch family operation which includes ranching, feedlot, swine and farming. Mike Brandherm, the hog farm manager, spoke to our class about this aspect of the operation. Mr. Brandherm started working with Hitch in 1995. Currently Hitch has 6 sow facilities with a capacity of 2500 sows per facility. Approximately 6500 pigs are weaned per week. They artificially inseminate the sows and currently own around 125 boar studs. The sow’s gestation period is 115 days and they produce around 12 live pigs per litter. The pigs are weaned at 21 days at 14 lbs and taken to the nursery facilities. The pigs will stay there for 52 days before being transferred to the finishing facilities. Hitch has 108 finishing barns and the hogs are averaging a daily gain of 1.9. Close to 150,000 hogs are on inventory at any one time. Each barn has an evaporative cooling system to keep the temperature at approximately 80 degrees and they all have 2 ft deep pits drained weekly into a lagoon. The lagoon waste is used on the farm ground.

Curtis Range, Hitch farm manager, is retiring at the end of this year after working for Hitch for many years. Mr. Range took us to see the machinery they use in the Hitch farming operation. They have built or redesigned many of their implements to fit their operation needs. They currently use strip till and no-till methods rather than conventional tilling. They finished chopping silage earlier in the day and took us to the silage pits for viewing. Mr. Range said it was a poor year for silage. Each silage pit holds around 800 to 950 thousand bushel. The pits are covered to keep moisture from seeping in. The silage is used in the Hitch feedlot operation.

Doug Duncan, Hitch feedlot manager, spoke with us about the operation. The feedlot has a maximum capacity of roughly 50 thousand head. The employees process approximately 1500 head a day and closer to 800 – 900 per day on warmer days. There are no shades in the pens other than in the hospital pens. Fat cattle stand the heat better than new cattle and since there is relatively no humidity in the area, the heat does not seem to bother the cattle. There are no water quality issues to deal with as the area receives only 15" of rain/water per year at an evaporation rate of 54" per year. The feedlot has a Holstein section of the yard where they bring in Holsteins from California and feed them for about a year. The pens are cleaned using lime and Clorox water between sets of cattle brought in.

Jason Hitch gave us a little background of Hitch Enterprises. Jason’s great-great grandfather moved to the area in the late 1800’s. Most of the land was acquired in the 1930’s and today they own approximately 25,000 acres in Oklahoma as well as some land in Kansas and Texas. Of the 25,000 acres, 16,000 acres is ranchland. They do not run a cow/calf operation anymore, choosing instead to run 7000 head of stockers per year. The Hitch family has been located in the area for approximately 125 years.

After touring Hitch Enterprises, we boarded the bus and headed back into Guymon for the rest of our Wednesday session.

After a most interesting and educational afternoon, we were treated to a terrific pizza dinner at the Wild Horse Gallery and Art Center. Members of the Guymon Ambassadors from the Guymon Chamber of Commerce were there to greet us as we walked in. Beautiful pieces of work of all styles and media adorned the room. The evening was sponsored by Mike Ray, an alumnus from OALP class X and the Nutrition Physiology Corporation.

Alysha Locke, the director of Artist Incubation and the Wild Horse Gallery gave a very interesting presentation on the gallery's history which began in 2003 when the Panhandle Oklahoma State University's art department outgrew its agriculture department. Everything featured is by local artists and all work is sold by commission.

Representing the Guymon Chamber of Commerce and OALP alumni from class XI, Jim Quimby gave a nice welcoming speech before we ate. Unfortunately, Gus Blackwell, the Northwest region state representative was unable to attend and speak with us.

After we ate we were treated to a fascinating mix of local history and lore from a distinguished resident of the panhandle area, Hal Clark. He talked about the way many towns got their names, their local history from when they settled through many generations of time and events. Following his speech we visited with each other, the alumni, and local guests. The entire evening was a wonderful way to cap off a busy day.

We departed the Townsmen hotel at 7:40 a.m. for a tour of Seaboard Farms Swine Processing Plant in Guymon. This was the first outing to use the headsets donated by Monsanto DeKalb and Stillwater Milling. They proved to be very helpful and effective in many of the outings during this Seminar. Class 14 says a big Thank you again for these tools to make OALP even better!!!

We arrived at the Visitors Room at 7:50 a.m. where we were greeted by Ricardo Mora, Assistant Plant Superintendent. He gave some general information about the number of hogs processed per day, different shifts and numbers of employees, shipping procedures, export information, safety procedures, etc. Due to the waiver signed upon entry we are limited to the information do disclose about what we saw inside the processing plant. We donned our safety equipment and divided up into about 4 groups with different directors leading our tours. We enjoyed a fantastic tour of the Kill and Cut Floor at Seaboard. We were able to see much of the new improvements they have incorporated over time and many of the safety procedures and mandates to insure a quality product for the consumer. Their website is Seaboard.com.

We boarded the bus at 10:15 a.m. and departed for the Biodiesel plant.

At 10:30 a.m. we arrived at the Seaboard Farms Biodiesel plant. We met in the controller room for a brief explanation of how the plant operates. Patrick Griffin gave us a tour of this plant explaining that they use waste animal fats from the processors in the area which comes to them at 180 degrees liquid to produce biodiesel. The purer the fat the better the oil. They treat the fat to remove all the impurities. Glycerin is a byproduct of biodiesel production. The lab tests the quality of the oil. It must be stored once in diesel form at 45 degrees farenhieght to keep from separating. The plant has a flow rate of 90,000 gallons per day and has two 425,000 gal storage tanks that are heated by steam coils to inventory the biodiesel. They then sell to retailers such as Love’s, Travel America, and Pilot stores.

Biodiesel is easier on the engine, has a higher cetane rating, but has a 5% loss in efficiency as compared to petroleum diesel. The plant has 30 employees and rotates them in 4 shifts. It has been in operation for 1.5 years after a construction phase of 1.5 years. They like to keep plants near packing facilities but also to keep them 300 miles apart

At 10:55 a.m. we departed for Liberal, KS where we stopped at around 12:00 p.m. at the Plains Cotton Cooperative for lunch. There we met Dick Cooper and Jim Pittman who hosted us for lunch. They gave us some information about the cotton industry in KS before and while we had lunch. We ate in a 330,000 sq. ft. storage facility operated by Mr. Pittman. He told us that this was the largest cotton storage in the U.S.A. They see the cotton frontier as being in Kansas. This plant operates with 4-6 employees.

Mr. Cooper addressed the group while we had lunch and talked extensively about the changing cotton industry and the textile industry they have become involved in through their members. He shared how the textile industry is seasonal and 70% of the textiles are sold at back to school time and Christmas. He stated that the volume is the worst right now since 1951 which he fills is an indicator of our economy. He shared that anyone could get a pair of 100% cotton denim jeans by order on Safedenim.com site. Their cooperative acquired a denim plant in Guatemala which has been a big asset for the company.

We departed from PCCA for National Beef Processing Plant at 1:15 p.m. Arriving at 1:30 p.m. Terry Gilbert met with our group in their visitor’s room. He again gave a summary of the size of plant we were about to tour. We again signed a waiver that the information we saw inside was confidential. Mr. Gilbert told us briefly about the different stages of the plant we would see and some of the statistics dealing with carcass weights and yields. The focus for this plant is value added because it is owned by several ranchers. They have just opened a new facility in California but besides that opening this plant is the newest facility which is 20 years old already. They are adding some new technology to rate the quality and are developing new uses for all of the by products of the production. This too was an excellent tour and we were able to see the process from start to finish in their huge computerized warehouse.

We departed the plant at 3:30 p.m. and drove to the Ethanol plant.

Arkalon Energy, Liberal, KS

We went to the ethanol plant and met with Nick Hatcher. He is a local farmer, one of the founding members of the ethanol plant and currently Chairman of the Board of Directors. Also to great us was Tom Willis, the Chief Executive Officer (CEO) of the ethanol plant.

We were handed over to our tour guide Mike Blankenship, Plant manager. Using our new headsets we were able to tour the facility in one group.

When the plant idea started their goal was to have farmer members first in the Liberal, KS area. The plant started as a local economic development idea. This is where Arkalan Energy, Liberal, KS came from. This 110 million gallon plant was started in 2005. They use about 38 million bushel of corn or sorghum in about a 60/40 split.

This plant gains efficiency from re-using heat and water through its processes. The increase in efficiency helps the plant be more eco friendly while lowering cost of production. They used the company ICM from Wichita, KS for their technology.

The ethanol is used as a companion fuel to gasoline and replaced MTBE as an octane booster. Using ethanol at the E-10 level lowers emissions by 30% with primary reductions in NOX, Carbon monoxide. The government wants a renewable fuel and support for ethanol faces some key oppositions.
1. Myth about fuel economy and power. Tom’s Flex-Fuel car runs best on E-20.
2. Food versus fuel. Ethanol can’t impact the price of corn like the value of the dollar or productions. After all needs are met we still have a surplus of 1.7 billion bushel last year.
3. Fuel Independence. Starch ethanol only replaces 13 billion gallons of gasoline. It cannot do it alone.
4. Unwilling buyers, the oil companies must use ethanol blends to meet fuel standards. .

Why some plants succeed while others fail.
1. Need a diverse investor base to fully capitalize the project and some did not.
2. You need to start with the best technology you can buy. Cheaper systems are not as efficient to run and lack profitability.
3. Some used unproven technology and never reached efficient production.
4. Do not speculate on the future inputs. Lock in margin at 15 to 20 days. Hedge and cash flow impacts with large swings in corn commodity prices broke some companies.

Research:
1. Not much spent.
2. Service debt first
3. Stay educated
4. Let others R&D as technology changes so quickly.

They have 430 owners with 80% local money.
We sell our own DDG’s to keep some control.
The blender is subsidized not the producer of ethanol.

This plant uses less water than an 18 hole golf course. Recycles everything it can.
The plant is a living system that must be kept in balance at all times for best production.
The plant is run by teams of 5 people in shifts. With 47 total people employed directly.

Output includes

 International Grain Marketing
(Matt Johnson)-Iowa State University. Matt discussed the international impacts on grain prices. He covered supply and demand issues around the world grain markets.

By 6:45 a.m. the OALP class had checked out of our hotel rooms in Guymon, OK. We boarded the Guymon Tigers school bus, which we greatly appreciated the use of, and started toward Goodwell, OK to the OSU Research Station. During our ride to Goodwell Rayland Earls and Rick Kochenower, who are both OALP alumni, accompanied us. They told us different things about the area of Oklahoma we were in as we traveled towards Goodwell. Upon arrival at the OSU research station, Mr. Kochenower, who is the area research and extension specialist, became our tour guide. As we drove through the test plots he explained the types of crops being grown and what type of tests were being done. Some of the crops they deal with are wheat, corn, sorghum, canola, sunflowers, and various other crops they want to try for that area. Mr. Kochenower explained that conferences are held at different times of the year over different crops. Other research they are doing includes: dryland strip till, underground drip irrigation, and sweet sorghum for use in biomass fuel research. We finished the tour and dropped Mr. Kochenower off at the research station office.

We then headed west toward Cimarron County. Near Keyes, OK we stopped at the grain and chemical facility of J.B. and Jarrod Stewart (OALP Class 8). They are 4th and 5th  generation farmers. They initially bought the grain facility for their own use, but later expanded in order to purchase grain from their neighbors. Also, they initially purchased the bulk chemical and spray rig for their own use, but later expanded in order to do chemical application for their neighbors. They now pride themselves in the customer service they provide which has allowed their business to double each year from 2002 to 2006 and is still growing steadily. The Stewart’s also farm 20,000 acres of dryland with a rotation of wheat and grain sorghum. The Stewart’s do quite a bit of no till planting of their crops. On top of the farming operation and custom grain and chemical business the Stewart’s also own and operate a crop insurance and other insurance business. The Stewart’s use up to date technology such as auto steer and other guidance systems on all of their tractors and combines. One last thought for this tour as quoted by Jarrod Stewart, "You’re only as good as your worst help".

Our next stop was actually brought to us at the Stewart Farm by Britt Smith, owner of No Mans Land Beef Jerky. Britt and his sister Belinda started this business after a stop at the store one day for beef jerky. They could not find any jerky that they liked. They told each other they could make better jerky themselves, so they did. They are currently selling in over 130 stores and on the internet. They started out small and now at the current facility are producing 1200 pounds of actual jerky per day. The Smith’s were kind enough to bring each one of us a bag of jerky to try. The Smith’s send jerky to the troops overseas and they also sent a pallet of jerky to aid the hurricane victims. Our OALP class really enjoyed hearing about Britt and Belinda’s business.

The OALP class then loaded back on the bus and headed back to Guymon for lunch at Kim’s Rib’s, aka Hunny’s. We were joined by many guests that included Jason Hitch, Rayland Earls, and Jess Nelson. Mr. Nelson is the retired mayor of Guymon. Mr. Nelson was our lunch speaker. He talked about the challenges of a growing community. There were many challenges faced by Guymon when Seaboard Farms decided to come to town. Those challenges included housing and hotel rooms for construction workers and new employees, all utilities that needed expanded, the size of the schools, and the number of teachers. Guymon received help and guidance from Garden City, KS on how to set up an Impact committee to put together a plan and decide how to implement that plan. The Impact committee made 1 year, 3 year, and 5 year goals and all worked well as the town of Guymon met all of these goals that were set. The town of Guymon still has a lot of work to do but the future is looking bright for Guymon.

The OALP class had a surprise guest that just happened to be in town and stopped by to speak to us. Senator James Inhofe spoke briefly about current issues such as cap and trade, 2nd amendment rights, and health care. This was a short visit, but very informative. The OALP class appreciates Senator Inhofe for taking time to talk with us.

After lunch and hearing our speakers the OALP class loaded up in our vans and started the long journey back to our homes. It was a great seminar and very informative.