Speaker
Kip Tom
Position
Chief Executive Officer, Tom Farms, LLC in Leesburg, Indiana
Biographical Sketch
Kip Tom is CEO of Tom Farms, LLC in Leesburg, Indiana. Founded in 1952 by his parents Everett and Marie, Tom Farms is one of the largest suppliers of seed corn and related services to Monsanto Company as well as a major supplier of corn and soybeans to processors and livestock operations. Tom Farms is a multi-generation, family owned organization firmly planted in fertile prairies of North Indiana more than 173 years ago; Tom Farms has evolved into a global crop production, sales and service company and industry leader. Today it is one of the leading suppliers to Monsanto’s seed production supply chain and has more than 22,000 acres in production in North America and Argentina.
Kip is on the board of directors of Farmers Feeding the World, a nonprofit founded by Farm Journal Media, Philadelphia, PA. He also serves on the board of the Indiana Economic Development Corporation, is an adviser to the Indiana Department of Agriculture, and is on the board of the Indiana Chamber of Commerce. He is a member of the advisory council at Purdue University. He also serves as a board member of the DuPont Global Agricultural Advisory Board and John Deere’s Global Advisory Board. He is a graduate of Texas A&M and has an executive MBA from the Harvard Business School.
Presentation Summary
Tom Farms has invested in agriculture since 1837 when our Scottish ancestors first settled in Indiana. I am the 6th generation of Toms to farm the ancestral land and these days, many more acres. We have a passion for sustainably producing food and fiber for a growing world population. I am humbled to speak to the Philadelphia Society for Promoting Agriculture. You have a rich legacy and a long list of accomplishments.
We are a family farm operation and we want to make sure we protect our farming resources and pass them on in good shape to future generations. We farm 18,000 acres in Indiana and 4,000 acres in Argentina. When I was born dad farmed about 250 acres and had cattle, chickens, pigs and a big garden out back of the house. I have three children and a sister in the business and my parents are still involved. My oldest son runs the crop production side of the business. My other son is our information officer and handles administrative work. My daughter is the office manager, working with my sister.
Today we produce seed for Monsanto in the U.S. and for DuPont in Argentina. One of our primary concerns is succession planning so we can make sure the business stays in the family. The challenge we have as farmers is that we face a future in which we have to do more with less. By 2050 the world population is expected to exceed nine billion people. That means a doubling of demand for food over that period as diets improve. We will have to do more with less because we are not going to have more land or more water. We have fertilizer resources that are starting to diminish. The consequences of not being able to produce more with less and falling short of world food demand are not pretty. Global food security is a central issue that concerns many nations. I have witnessed problems with food security firsthand in Iraq, Afghanistan, Uruguay and other countries.
Future population growth will primarily occur in Africa and Asia. One projection estimates a tripling of the population by 2075 in Africa alone. Already, Africa cannot provide sufficient food for its people. Imagine cooking in your kitchen while the crowd continues to grow but you only have so much food on hand. This is a huge challenge.
Between now and 2030, demand for soybeans is projected to increase 125 percent. For cotton, it’s 102 percent, for poultry, 98 percent and for corn, 76 percent. China is talking about doubling its herd of hogs in the next 10 years. It will take a lot of corn and soybeans to produce that protein to put on that plate in China.
A gap currently exists between the growth in farm productivity and the growth in productivity needed to meet growing demand. Productivity is growing at 1.4 percent per year and it needs to grow at a rate of 1.75 percent to meet demand. The projections are that in 2050 the world will need 100 percent more food — and 70 percent of increased productivity to meet that demand must come from efficiency-improving technology. When I look at those numbers I am fearful that government policies could have an adverse impact on our ability to improve productivity.
Currently, three billion people around the world live on less than $2 a day. In Afghanistan the average household income is $800 a year. Yet most households there need about $1,200 per year to sustain their needs. Given this fact, it is little wonder that the people grow high value crops like poppies for opium or sell their children off to the slave trade. Afghan households spend about 70 percent of their income on food. Here in the U.S. it used to be up around 30 percent of household income for food but these days it is closer to 10 percent.
Innovation has kept food prices low in this country. In 2009, the cost of crude oil was 337 percent, in adjusted dollars, of what it was in 1960. Corn cost was 54 percent of what it was in 1960 and wheat cost 47 percent of its 1960 level. Rice comes in at 15 percent of 1960 cost and milk 63 percent.
We need to put technology into play to continue reaping the rewards of productivity generated through innovation. The popular notion is that we are getting this productivity through greatly increased use of chemicals and genetically modified seed. This is only partly true. Yes, we use chemicals but we do so in a much smarter way than we did in the past. And genetically modified seed, while a major innovation in its own right, is only part of the story.
On our farms, we go through our fields using global positioning systems (GPS) to take soil samples from every 2.5 acres. We send it to a lab and from the results derive a prescription for fertilizer needed for each 2.5 acre grid that comprises our 18,000 acres in Indiana. The result is that we don’t use any more resources than we have to. As a result, we are achieving higher yields while using less fertilizer and other resources per acre than we did in the past. When our GPS-equipped fertilizer applicator goes across a field it varies the rate applied according to the prescription we developed through soil sampling so it is constantly kicking on and off as it moves over the land. This saves many, many tons of fertilizer. We apply supplemental nitrogen in much the same way. Our nitrogen applicator reads the greenness of the corn as it moves over the crop and applies more nitrogen when plans are yellower and less when they are deep green.
The same principle applies to planting. We use several overlays of data that include soil type, fertility, moisture and other characteristics and vary the seeds planted per acre every ten square meters in a field. As a result, one 160-acre field will have hundreds of plant populations that leverage the resources of each one of those grids differently. This maximizes yields and saves precious resources in the process. At harvest time, our GPS-equipped combines measure the yield on the same grid basis as they move across the land, collecting critical data for the next crop so that we can make better decisions the next year.
It is this kind of technology-based decision-making that increases yields while at the same time saving resources and lowering the carbon footprint per acre. When I graduated from high school in 1973, the national average corn yield was about 70 bushels per acre. Today it is close to 150 bushels. The goal is by 2030 to have a national average corn yield of 300 bushels per acre. At Tom Farms we have already had fields that averaged more than 300 bushels per acre.
The growth in productivity will continue through advances in these and other areas such as seed engineered to incorporate a variety of traits. And there are a number of aspects of management that can continue to improve. For instance, this spring, corn just harvested in Hawaii was flown to Chicago O’Hare, sent to a seed cleaning facility and planted on our acreage in Indiana within days of it coming out of the field in the Aloha State. This kind of information-intense and logistics-intense system enables us to continue to harness the latest genetics for greater productivity without wasting resources. For instance, it used to be a rule of thumb that we needed 1.3 lbs. of nitrogen for every bushel of corn. Today, we use .7 lbs. per bushel of corn. As a result of all of the above, our carbon footprint from things like energy use, net carbon emissions and irrigation water use has decreased considerably and our goal is to decrease considerably in the future from where we are today.
Another aspect of efficiency is labor productivity. At Tom Farms, we do what we do with 15 people on staff and 3 to 4 people in the office. This is due to technology gains. In 1978 were planted with 4-row planters and today we use 54-row planters. When we spray fields we can do 180 acres an hour with rigs that have 120-foot booms. When you look at what we do these days, the word farmer doesn’t quite describe it. What we really are is biological manufacturers. Of course, the management aspects of all this are considerable. Each year we trade between three and three and a half million bushels of crops in markets that are much more volatile than in the past. And input purchases are bigger. For instance, we buy about 8,000 tons of fertilize per year.
The last thing I want to address is the culture war over food. I believe that each model in agriculture needs to exist and evolve — organic and natural foods production as well as conventional commercial production such as we do at Tom Farms. But to make sure we continue to feed our growing population, we need to avoid government policies that have the potential to limit one model or the other. Advocates for alternative agriculture have a very different view of what a farm should look like as opposed to practitioners of conventional agriculture. There is also disagreement about who should make decisions about policies for agriculture. Conventional farmers believe governments, technical experts and the markets should contribute to those decisions. Advocates for alternative agriculture don’t trust the technical experts, governments or the markets and instead defer to environmental advocates, social justice advocates and anti-corporate advocates.
Throughout history, farmers have never been asked to do more with less. We have to face that challenge. Norman Borlaug said it best: World peace will not and cannot be built on empty stomachs.
In an effort to provide wide-ranging views and perspectives regarding the practice of and issues surrounding agriculture, the Philadelphia Society for Promoting Agriculture (PSPA) seeks speakers representing a variety of perspectives. The statements and opinions they present are strictly their own and do not necessarily represent the views of PSPA.