AgWest Commodities

AgWest Commodities 

HOLDREGE — AgWest Commodities has grown over the past 20 years from a space in owner-Chief Executive Officer Steve Knuth’s house to a new headquarters in Holdrege in 2006 to a regional business with offices in five states.

A new service launched last fall is AgWest Land Brokers overseen by land broker Jeff Moon.

“Last winter, we got to thinking about the age of farmers out here and knew there would be a lot of land for sale in the next two decades,” Knuth said about the decision to expand.

AgWest Commodities already helps more than 2,000 producers to develop and execute marketing plans suited to their individual needs. Knuth said his company has many more contacts, including more than 1,000 ag lenders in the five core states and others who get AgWest publications and/or attend company-hosted market outlook meetings.

“We have all that branding and exposure out there,” he said.

It’s Moon’s job to develop the “infrastructure” for the land brokerage business in Nebraska, Colorado, Kansas, Iowa and South Dakota where there already are AgWest Commodities offices.

“We listed our first property in Kearney County about a week ago (mid-January) and have some other deals,” said Moon, who previously was an associate broker and land manager with Farmers National Co.

The partner in AgWest Land Brokers is George Clift, an accredited land consultant and land broker based in Amarillo, Texas, who specializes in farm and ranch real estate.

In an AgWest press release, Clift said, “All of our agents have land and cattle interests, so they are fully tuned into what it takes to make things work ... AgWest Land Brokers allows our brokerage entities to represent properties from Texas and New Mexico to South Dakota and Iowa and beyond.”

Knuth said he has known Clift for many years and pitched the idea of working together.

The partnership may allow Clift to expand his land brokerage services into states served by AgWest Commodities and AgWest to extend commodity brokerage services to new states — Texas, Oklahoma, New Mexico — where Clift’s business already is established.

Knuth originally was a partner with his brother in a fertilizer business. Seeing how drought in parts of farm country sent corn and soybean prices to record highs in 1988 sparked his interest in commodity markets.

“I was just totally immersed in this thing,” Knuth said.

He also realized that many farmers needed help to market their crops, so he started as a part-time broker working with approximately 30 fertilizer business customers.

The fertilizer business was sold in 1997. “So I took a step to doing what I really loved,” Knuth said. “... It started in my house about 15 miles south (of Holdrege) — 10 or 11 people in my house.”

AgWest now has 45 employees at offices in Holdrege, Imperial, Sutton, Gretna and Beatrice, plus Yuma, Colo.; Paola, Kan.; Humboldt and Adel, Iowa; and Beresford, S.D.

When asked why farmers seek marketing advice, Knuth said, “By and large, we become more of an accountability factor to help keep the emotions out and stick to a plan.”

He talked about a “structured approach to marketing” that requires a skill set most producers don’t have time to develop on their own.

The advice is even more important now. The combination of more acres being planted to grain crops world wide and new technologies that improve production is “just burying us in grain,” Knuth said.

Periodic weather events in major crop-growing areas, such as ones in 1988, 1996 and 2012, boost markets. However, Knuth said they don’t happen often and because of new plant genetics, terrible weather is required to have a great impact on overall production and prices.

Moon said that despite the current low commodity prices, there still is demand for ag land.

“The good quality ground is holding steady, but the marginal land is off 10 percent to 30 percent,” he said, describing the good land as having good soil and irrigation.

Moon expects that AgWest Land Brokers will do a lot of business on ag land sales tied to generational transfers and estate settlements. “It’s easier to split up cash than split up ground,” he said.

Another factor influencing people looking at farmland simply as an investment is the current return on investment generated by stock markets. “I’m surprised at how many people still are looking (to buy ag land), investors and farmers,” Moon added.

He’s not sure if a land broker will be placed in every AgWest office, but he is certain about AgWest Land Brokers’ mission.

“We help put buyers and sellers together. We pride ourselves on good customer service and providing value to sellers and buyers,” Moon said.