Efficiency critical in high risk farming

Kendall Hill is a third generation sweet potato farmer in Kinston, N.C. Never before in the history of Tull Hill Farms has efficiency been so critical to survival, he says.

Hill’s father farmed on shares, starting in 1938. He kept the sweet potatoes and the landowner kept the corn grown on the farm. By the 1950s the farm had expanded to include cotton, tobacco and various vegetable crops, though the staple has remained sweet potatoes.

“My father was way ahead of his time in terms of organization and efficiency,” Kendall Hill recalls. “In the 1950s he farmed 100 acres of tobacco, which was a lot for one person at that time.

“In 1956 he bought six new tobacco harvesters, which was unusual. He used the harvesters to prime tobacco and carry it directly to the barn to hang it. He had a crew that all they did was hang tobacco — it was a streamlined operation at that time,” Hill says.

Though the farm has grown to over 4,000 acres, including over 2,000 acres of cotton, tobacco remains one of the staple crops. “It varies from year to year between tobacco and sweet potatoes,” Hill says. They grow about 650 acres of sweet potatoes and about the same acreage of tobacco.

While cotton and soybeans make up more than half the total farm acreage, Hill says the current high prices are not necessarily good in the long-run. Input costs are driven by these high prices for grain, Only farmers who have really high yields will make money, despite the high prices, he contends.

For example, Hill says, cotton that sells for 80 cents a pound is no bargain, if the grower only makes the state average yield. In 2008, a cotton grower will have $550 or so invested in an acre of cotton. If he produces at the state average of 600 pounds per acre and gets 80 cents a pound, it’s a losing proposition, the North Carolina grower adds.

In the spring of 2008 he bought on-farm diesel for $3 a gallon, compared to $2 a gallon in 2007. Now, even on-farm diesel is pushing $4 a gallon. “That kind of increase will kill a farmer who is not efficient and who cannot produce high yields per acre,” Hill says.

“We grow about a hundred acres of cabbage. We sell our cabbage for six cents a pound — a ridiculously low price. To make any money growing cabbage, we have to have very high yields, and we have to keep a close watch on input costs.”

Like many growers in eastern North Carolina, Hill uses H2 labor from Mexico. It costs him $1,000 per person just for transportation costs of getting a worker from Mexico to work on the farm.

“If a grower has a tobacco crop and he only uses that laborer for 500 hours a year, that one cost is going to cost him $2 per hour. We are diversified enough and have our work schedules organized so we can work that same person 2,000 hours a year, our transportation cost is 50 cents an hour for the same laborer.

“Most of our labor comes in February, when we start planting. We are planting up until May when we start harvesting vegetables. We don’t finish harvesting until we dig sweet potatoes in November.

“Our H2 workers get plenty of hours, and that’s what they come here to do. Being diversified helps us provide work nearly year-round. Spreading housing, transportation, etc., expenses out over a longer period of time makes your per pound or per unit cost lower,” the North Carolina grower says.

“We use an antiquated, but highly efficient system of hand harvesting tobacco. If we had an automated system, it would leave over a month of down time for our labor. By keeping labor working from the time they get here until the time they leave, it makes our hand harvesting system efficient for our operation,” Hill adds.

The same level of efficiency is needed throughout the tobacco operation, he says. For example a tobacco barn with a 7.5 horsepower motor, which is common for older rack barns, uses the same amount of electricity used in a modern barn that holds 1,500 more pounds of tobacco. The cost per pound of tobacco, just in electricity costs, is significantly lower in a more efficient tobacco house.

“The labor cost has risen from $3.35 per hour when we started using H2 workers. In 2008, we are paying $8.80 per hour, plus housing, transportation and other costs. We are paying taxes, the laborers are paying taxes. We are working hard, they are working hard, but we are both happy with the outcome so far,” Hill says.

Two of the key cost inputs for farming, labor and energy, are being managed closely by the Hills. Careful management, Hill says is not necessarily an indication of high yields. Applying good management and efficiency to production are critical to high yields and to survival with such high input costs, he contends.

Oftentimes efficiency, high yields and high quality go hand in hand. For example, their hand harvesting system for tobacco saves labor and fuel costs, but also increases the quality of their tobacco.

“We are doing it (harvesting) by hand in the field, so the first advantage is that tobacco is laid in the box straight, giving us more pounds per box. And, we don’t bruise the tobacco, giving us a 3-4 cents per pound increase in price,” Hill says.

Even little things, like row patterns are critical to efficiency at Tull Hill farms. They plant cabbage in a diamond shaped pattern to improve airflow, reducing risk of disease, without significantly reducing total number of plants per acre. The diamond shaped planting pattern provides efficiency, quality and high yields.

Hill started his college studies in agricultural engineering, before earning a degree in horticulture from North Carolina State University. He hasn’t lost his interest in, nor his efficiency in tinkering with equipment. For example, changing to a diamond shaped planting for lettuce required some innovative, but simple for him, changes in the planter.

The penchant for efficiency has passed from generation to generation at Tull Hill Farms and as Kendall Hill’s son, Rob and his nephew Michael continue the farming operations, one thing is fairly certain — they will carry on the family tradition of excellence.

e-mail: [email protected]

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