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High-tech farm investment unphased by election

The console in the Mark Jagels' tractor.

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Mark Jagels, a farmer in Davenport, Neb.

Mark Jagels, a farmer in Davenport, Nebraska, with one of his John Deere tractors.

Jeremy Hobson: We're just two days away from the Nevada Republican caucus. So let's continue our Marketplace election series, The Real Economy, with the story of a state that is essentially the economic opposite of Nevada. It's a state that relies on farming. And with high crop prices, farmers aren't saving -- they're paying down debt, buying more land, and investing in new equipment.

Marketplace's David Gura takes us now to the economic bright spot that is Nebraska.


David Gura: Tom Joyce caters to some pretty high-end clients. 

Tom Joyce: I tell our salesmen we’re dealing with millionaires every day, and you make sure you treat them well.  I mean, like you’re the maitre d’ of a nice restaurant.

Joyce manages the Plains Equipment Group. It’s a John Deere dealership, just off I-80. Each piece of merchandise he sells -- a new tractor, a new combine -- costs hundreds of thousands of dollars. Think of it this way:


Joyce:
These guys buy Lamborghinis and Ferraris every year. They’ll buy a $250,000 machine that they’ll use for six weeks of the year.

Mark Jagels: We’re looking at a 16-row John Deere planter.

Mark Jagels keeps one of those forest-green farm Ferraris in his equipment shed. He grows corn and soybeans in Davenport, Neb., about 80 miles away.

Jagels: Quiet. It is totally quiet. And I mean, we’re sitting there, probably half throttle. And you don’t hardly hear anything.

The tractor is Bluetooth-enabled, with satellite radio and air conditioning. It’s computerized, with GPS.

Jagels: The monitor here, that is everything from our guidance and controls the planter and everything, right there.

In the winter, Jagels programs the system with his laptop. He tells it what to plant, and where; how much fertilizer goes on a line of crops. Then, in the springtime:

Jagels: I find that field, I bring up that line. Boom! It’s right there, and you know, you should never be off more than one or two inches, as you’re driving through the field.

Jagels says farming isn’t as physical as used to be. It requires less labor. Today, a tractor like this one can pretty much drive itself.

Jagels: I can flip the steering wheel up. I can sit here. I can answer emails. I can do whatever I want to.

And according to Jagels, there’s a lot less waste. In the kitchen, he shows me a printout, with data from the tractor.

Jagels: I planted soybeans. The average rate was 169,390 seeds per acre. It gives me the total seeds applied and the total acres I planted.

And that kind of information, Jagels says, that efficiency, is worth every penny.

I'm David Gura for Marketplace.

About the author

David Gura is a reporter for Marketplace, based in the Washington, D.C. bureau. Follow David on Twitter @davidgura
Brad Wilson's picture
Brad Wilson - Feb 2, 2012

We get higher farm prices for a farm bill year. Last year corn was about $6 per bushel at my elevator, well under the record of $21.10 (CPI 2010) from 1947. In 1947 oil per barrel was also $21.10 and last year but it didn't also fall to $6 last year, it rose to $87.04. Recent corn hasn't risen to $13.30 (2010 CPI) like it did in 1974. But when corn plus a sum of 7 other similar crops dropped below zero for 25 out of 26 years, 1981-2006 vs full costs (USDA-ERS) we started out with a much better farm bill, with price floors set at $5.80 (2010 CPI). If prices tank back to 2005 levels, the lowest in history, farmers are stuck with zero price floors and zero related policies. All of these illusions of wealth on paper will disappear and banks will again foreclose. Soybean costs are projected to rise 16% this year alone (66% since 2004) and the failure to get good GIPSA rules and the ongoing zero price floor farm bills set farmers up for devastation should history repeat itself.

davidgura's picture
davidgura - Feb 2, 2012

Thanks for the comment, Jason_R!  As a matter of fact, I did a piece on that very subject, for Marketplace: "Steady and conservative: The Nebraska Way."  You can listen to it here: http://www.marketplace.org/topics/elections/real-economy/steady-and-conservative-nebraska-way

Jason_R's picture
Jason_R - Feb 2, 2012

Oh yes, I've been listening since Marketplace Money last week, and all the other Marketplace podcasts throughout this week. I've already shared this story with my friends from Wayne, America. They were quite pleased with the reporting as well.

It feels like I've been telling people - foreign and domestic - for years how great our State is. Your stories have finally given me some credibility!

Jason_R's picture
Jason_R - Feb 2, 2012

Thanks for doing this ongoing segment! I like how you haven't focused on Nebraska doing well solely because of destiny factors like our agriculture base benefiting due to the strengths of commodities markets. We're also quite fortunate because of our economic practicality, and the accompanying agribusiness industries here in the state. Our pragmatism is also reflected in our Unicameral structure, balanced budgets, and our protection of the state's cash reserve. Nebraska truly is the Good Life State!