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Episode 10 All Things Ag with Lee Hood

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Listen to Lee as she discusses the inflation, supply vs demand and what advice she has for today's youth. Lee is the co-owner of Blandford Feed, CFO of Clements Ag Supply and a Director of the Ag Credit board.

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Speaker 5  (00:01)

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of AG and into the real life stories, conversations and events taking place in our community. Who we are and what we do is beyond agriculture.

 

Patrick Durham  (00:21)

Welcome to Beyond Agriculture. My name is Patrick Durham. I'm here with John and Saravard from the Stanford office. We're here today with Lee Hood. First off, I'd like to start by just checking in and seeing anybody got any rain lately?

 

SaraVard Von Gruenigen (00:38)

We were talking about this before the podcast and I was nervous to say what kind of rain I've gotten because I don't want to hex on me.

 

Patrick Durham  (00:44)

Yeah. So I assume, John, you've had some rain yourself.

 

John Peek (00:49)

This is Lincoln County Fair week, so we're almost guaranteed rain during the fair. We've got a little rain at home this week, so it's been good.

 

SaraVard Von Gruenigen (00:56)

That's good. I hope everybody is getting some rain across the state and in our area. We're here today with Lee Hood, CFO. Clements AG Supply and owner of Blandford Feed in Springfield, Kentucky. Lee is also a Central Kentucky Ag Credit board of director. Afternoon, Lee. We're glad to have you here today. Lee, do you mind telling us a little bit about yourself?

 

Lee Hood (01:19)

Sure. Thank you, Patrick. I was born and raised in Springfield and had the fortune of growing up on a 2000 acre farm that my dad managed full time. We raised cattle, hay and row crops, and my brother and sister and I showed cattle through 4-H and FFA. I graduated from UK in 2004 with a bachelor's degree in accounting. Fast forward several years and now my fiance, JP Blandford and I together have six kids and one granddaughter. We own and lease a total of 650 acres where we run about 160 mama cows and background 300 feeders every summer. I started working for Clement's Ag Supply about 17 years ago. I love my job there because I get to do the accounting work that I enjoy while being a part of all of our customers farming operations. In 2021, Mr. Clements was gracious enough to let JP And I purchase a portion of Clemens AG Supply, which we now operate on our own as Blandford meals in conjunction with Clements Ag.

 

SaraVard Von Gruenigen (02:29)

And you all sell feed, seed and a little bit of everything like a regular farm supply store would, correct?

 

Lee Hood (02:35)

 . Between the two businesses, we could pretty much cover anything you need, anything for animals, crops.

 

SaraVard Von Gruenigen (02:41)

And both of you work there together and get along?

 

Lee Hood (02:44)

We do.

 

SaraVard Von Gruenigen (02:46)

Good.

 

Lee Hood (02:47)

We do.

 

SaraVard Von Gruenigen (02:47)

Yeah.

 

Lee Hood (02:48)

We work together during the day and.

 

SaraVard Von Gruenigen (02:49)

At home, both of you, for a long time through my time with the Springfield stockyards and great people and they do a great job there.

 

Lee Hood (02:58)

Thank you, Patrick.

 

SaraVard Von Gruenigen (02:59)

Lee, can you tell us more about Blanford Feed for us folks that are in the Springfield region? Tell us about what supplies and offers and the products that you all have.

 

Lee Hood (03:10)

Sure. So we bought out the portion of Clements AG supply. That pretty much anything that would deal with taking care of an animal. So we sell a lot of bulk feed bag feed, fence, other farm supplies. We have the gooseneck trailer part of the business. Mineral for, cattle, sheep, goats, everything. Pretty much anything that your animals may need, we would have that for you.

 

SaraVard Von Gruenigen (03:37)

What do you think is your most peculiar or different farmer that you have encountered in your feed business?

 

Lee Hood (03:44)

We're seeing a lot more sheep in our mix. It used to be pretty much everybody had cattle and that was it. But now we're seeing a lot more sheep. We haul a sheep feed from Campbellsville all the way to Shelbyville.

 

SaraVard Von Gruenigen (03:58)

I've noticed that even with our customer base, it's not like a predominant part of their livelihood. But I've seen a lot of my cattle farmers like oh, yeah, I got about 40 of them. Hair sheep. They call them Hair sheep?

 

Lee Hood (04:09)

Yes.

 

SaraVard Von Gruenigen (04:10)

I don't how you pronounce katan. Is that catan?

 

Lee Hood (04:13)

I'm not sure.

 

SaraVard Von Gruenigen (04:14)

Yeah. But yeah, it's pretty common in our area, too. It's getting to be more prevalent.

 

Lee Hood (04:18)

Right.

 

John Peek (04:19)

Well, I'm just really interested, Lee. I met you a few times, but I don't really know you that well, so I'm excited to hear. So you grew up in Springfield? In Lincoln County. I didn't realize that. That bigger farm and operations. Really? Where I'm at over in Lincoln County, mostly smaller type operations, but that's pretty big. What would you say that's done for you? I mean, give you different perspective than some people around here?

 

Lee Hood (04:49)

I think it's given me a broad perspective. I felt like I was lucky that I was exposed to cattle and row crop. The owner also had horses, so I was around that a little bit. I got to run all different kinds of equipment. Rolling hay, running combine. So I felt like it gave me a pretty broad experience.

 

John Peek (05:11)

Absolutely.

 

Lee Hood (05:12)

Rather than just a small farm.

 

 (05:13)

Yeah.

 

Patrick Durham  (05:14)

At one point, I can't remember how long ago it was, he even had a horse that ran into Derby. Correct?

 

Lee Hood (05:20)

He did, yeah. I forget the year, too. It was probably maybe ten or 15 years ago.

 

Patrick Durham  (05:26)

But yes, remember the whole town really got behind it.

 

Lee Hood (05:30)

Yes. The horse's name was actually Where is Springfield? Because so many people have not heard of the small town in Springfield.

 

Patrick Durham  (05:39)

Lee, just a few questions along the way. Your position and the things that you've done in your career with agriculture. In the times that we're in with inflation, it's a common topic these days. It's kind of like covid and stuff. We kind of like to get away from it, but it seems to be here and having to deal with it. From your position, what do you see as being some of the key problems causing increased input costs today? With the inflation and stuff that we're.

 

Lee Hood (06:07)

Seeing, I think a lot of it simply boils down to supply and demand at a recent meeting we heard an economist speak on that very topic in the current conditions in the world and when he explained this to me, it kind of all made sense. He said that prior to the pandemic, most people spent about 70% of their disposable income on services and 30% on goods. Then during the pandemic there were all these non essential business shutdowns which were a lot of the service oriented businesses. So people kind of reverse that and they spent 30% on services and 70% on goods. Then you add in the fact that they had extra money from government stimulus and things like that, that there were just so many goods being purchased so fast that inventories were depleted, then production facilities were slowing down because of social distancing and it's just created this huge backlog. And any time that happens when supplies are low and demand is high, then the only way to correct that is prices to go up.

 

SaraVard Von Gruenigen (07:18)

I know when I was in college I didn't like my economics class too much, just wasn't my thing. But I remember I had an economic teacher and he always talked about the law of supply and demand and he would draw these graphs and he would say, one's gun and one is butter. Every time I hear people talk about supply and demand, I think guns and butter.

 

Patrick Durham  (07:44)

What's some of the ways in the Ag business that you've seen through your all store that people are dealing with that cutbacks or are they paying more attention to other inputs or what are some of those trends that you're seeing?

 

Lee Hood (08:00)

Definitely people are cutting back but not completely cutting things out, which is good. A lot of people are being just more mindful of each of those inputs. We found that a lot of people soil tested this year that maybe normally wouldn't have just to give them that extra information and know what they're purchasing is going to do them some good. And even if they didn't, they would ask the question, what does my hay field really need? Rather than just well, this is what I do every year, you know that people were thinking and asking questions and market prices have increased, which helps. But I think still just being mindful of each of those inputs and learning what input gives you the greatest return is probably the best solution.

 

John Peek (08:49)

I think going back to the supply and demand thing and we've seen it in every facete, toilet paper I think was the big thing. But people going out and stocking facetup on stuff and that's no different in agricultural supplies and the supply and demand, the supply chain was stressed anyway. But when you go and people are stocking up on that stuff and it causes huge demand and then a big price swing because people can get what they want to out of it, it really puts a strain on the economy and causes these price swings and it's increased prices. It's not just a swing, it's a swing up. And it's probably never going to swing back to where it was before.

 

SaraVard Von Gruenigen (09:29)

I think that's the worst part. Whenever we see input prices increase, the farmer's fears always, I don't think this is ever going to go back the way it was.

 

Lee Hood (09:38)

Right.

 

SaraVard Von Gruenigen (09:38)

And when are my prices that I get when I sell my goods, when is that going to go up to meet that? Remember when we had the big cattle price increase back when was that, '14 somewhere? I remember that was the big thing. It was like, finally we're getting caught up. But then it seemed like all the.

 

Lee Hood (09:58)

It wasn't very long.

 

Patrick Durham  (10:00)

Yes, that's a good lead in. Lee, in your position, say you did have the magic mirror to look into. Where do you see prices going from here? And what do you think the next couple of year outlook is as far as prices and inputs and stuff?

 

Lee Hood (10:19)

Well, I certainly wish that they would just drop as fast as they came up, but unfortunately I don't think that will happen. From what we're seeing right now, things are leveling off. So that is some relief. I think that will give a chance for some supply chains to catch back up. I know that for example, we're a Gooseneck dealer and we have some trailers on order, but if I ordered a brand new one today, it's at least a year before I can get it. So if you think about that, it not only stinks that you can't get what you want in a timely manner, but they've already got that price set for the next year and they already have those supplies bought for the next year at this current price. So it's not going to go down right away, but hopefully in time it will. We have been through periods where maybe fertilizer wasn't as high as it was this year, but I remember one year there was a big spike and everybody got scared. But in a couple of years it did come back down to a more reasonable thing. So I think we're just kind of in a cycle right now and hopefully within a year or two things will start to normalize somewhat.

 

Patrick Durham  (11:35)

I hope so. We've got several years ahead of us that it's going to be some trying times in the Ag business, and I think so too. And hopefully one thing comes out of this. People will start paying a little bit more attention to their inputs and different things and do a little bit better job of managing. That's something definitely we see from our end, for sure, from the lending side. Lee, you've been successful as a business owner. What would be a good piece of advice you give to young people starting to get into the agricultural field?

 

Lee Hood (12:14)

I would say to expose yourself to as many things, agriculture as possible. It's always amazed me how every part of agriculture every subsection of agriculture intersects together. So no matter where you work, just work anywhere, whether it's a farm, a greenhouse, a farm supply store like ours, the stockyards, anywhere, you're going to be exposed to ag in some degree. And then what you learn there will build onto something else. And then later when you kind of get to the agriculture field that you want to I feel like with anybody in agriculture, when they're hiring someone, they want to know what your ag background is, and they want to know that you can connect to that ag job that you're going to be doing. So any of those previous jobs you did in agriculture are going to help you somewhere. You will learn something from them and use them and whatever you're going to do.

 

SaraVard Von Gruenigen (13:19)

I'm a testament to what you're talking about because my family has a farm. My family is generational farmers, but due to family circumstances, I didn't really have much farm background as a kid growing up, like most farm kids have. But whenever I wanted to get in farming and so I did just what you said. I got involved in agriculture through my husband. I helped him with his stuff, and then I got jobs in agriculture. I did co-op type jobs during college. And even though I didn't grow up farming, now I've got the knowledge to come to an employer, like you said, and be able to give what I know.

 

Lee Hood (13:56)

Right? Yeah. You saw the exposure.

 

SaraVard Von Gruenigen (13:58)

Exactly. And it's amazing. The stuff that I learned just through I worked with the Kentucky Beef Council, and the stuff that I learned through that program was just amazing. And of course, the hands on experience on the farm too, that later on got right.

 

Lee Hood (14:11)

Even my hands on experience growing up on the farm was great. But then when I came to work at Clements Ag Supply, I learned so much more from a different perspective. Yes. So to expose yourself to as many things as you can, I think is the key.

 

SaraVard Von Gruenigen (14:26)

Good advice, I think.

 

John Peek (14:27)

And I just like to add that too. I just came back from a vacation trip out west and even expose yourself to different areas.

 

Lee Hood (14:36)

Sure.

 

John Peek (14:36)

Because I saw so much stuff out there that we just don't deal with here. There are advantages out there. There are advantages here. Every place has its own issues that they deal with. And it was really eye opening to me to be out there and see how they did things versus how we do things. It's just a vast agricultural community in the nation and how that all goes together. I don't think we can ever stop learning. So I think that's great.

 

SaraVard Von Gruenigen (15:04)

We just got John back at the Stanford office and we've been dogging him about questions. So can you explain a little bit more about where you all visited while you were out west?

 

John Peek (15:13)

So we actually flew into Denver and then we made a big circle. We went southwest and into Utah and up through Salt Lake and over to Yellowstone and then back east. We went up into Montana and back down to Denver. But the agriculture out there, there's a lot more challenges, a lot drier out there, so there's a lot of irrigation. I don't see any irrigation around here. That was fascinating to me. I was visiting with a friend out there and he was telling me about the water rights out there and how that all works. Of course, I'm a cattle farmer, so then I got to go out and look at cattle with him. And it was 96 deg out there, and I wasn't sweating and the cattle were happy and they weren't standing in a pond and they weren't panting and there weren't flies all over them. There weren't tree in sight, but they were really happy. And my cows at home at 85, they're looking for shader standing upon, and I don't think we realize what fescue does to our cattle, and that's something they don't deal with out there. So it was just very eye opening to me, the differences and the different challenges people have.

 

John Peek (16:26)

And I'd say I probably wouldn't want to go out there in the wintertime and spend much time with him. That'd probably be a big challenge for them out there.

 

Patrick Durham  (16:34)

Along with that. Lee your brother lives in Iowa. What's some of the challenges I'm sure you all talk quite often what's some of the challenges he sees there versus what he's used to here in Kentucky, right?

 

Lee Hood (16:47)

Yeah, that's right. Patrick he moved to Iowa to farm about four years ago, so he spent 30 years farming in Kentucky and then had to learn how to farm in Iowa. One of his biggest challenges is the winter, and he is not at all happy about that because they have snow from, I think from October through March or even April. So he's also a cattle farmer, so dealing with that in that kind of weather is certainly a challenge for him. But then in some ways, he has the hot summers like Kentucky, too, but they have a lot more row crop ground, so they will graze corn stocks in the winter after harvest, and they kind of have more capacity to do some cover crops than even they graze. It's just unique.

 

SaraVard Von Gruenigen (17:35)

You are talking about those Midwest winters. It made me think about a story that one of my college professors told me. He was from the Dakotas and he had a real dry sense of humor, and he would say, talk about the snow that they got and all this kind of stuff. And he said, well, basically, you just go out to the barn, you tie rope to yourself and wade out in the snow, and if the rope quit jingling, you better get the pulling. I remember we always had the funniest stories from them about their winters out there.

 

Patrick Durham  (18:01)

And I think, too, with your story, John, traveling out west and telling about your brother's experiences in Iowa. I think it's a big plus for young people, whether they attend college, trade school or anything. Don't close your mind to just an idea. Open your mind up and do different experiences, and later on you can tie those experiences all together into a career path. Experience everything you can learn what you can, and then put a plan together. Because my career path has been a little bit everywhere eventually. I've always been around agriculture, though, so that's the one thing that kept me on the forward path. Lee being the CFO with Clements Ag Supply, you obviously have an extensive finance background in agriculture. What's some of the ways you see the farmers being able to utilize what Ag Credit has to offer to help them through the ever increasing rise in operational cost inputs and the market volatility that we're dealing with in today's times.

 

Lee Hood (19:13)

I think that probably the thing that will help anyone the most through these challenging times is to be financially strong. And that's not something that happens overnight. It takes a while to develop that and to get to that point. So I would first advise people to listen to their loan officer, to listen to you guys, because not only do you have ag backgrounds and you farm too, but you're in the finance industry. So as a borrower, as a farmer, if you would engage your loan officer, talk to them, share ideas, share your plans and your thoughts, then together the two of you can make the right decisions for your operation to help you become more financially stable. And that will help you whether any storm, whether it's market volatilities or droughts or anything. The other part to that, I think, is good record keeping. With my accounting degree, I feel like I keep records on everything and I write everything down. But we were talking about inputs and learning what input is the most valuable, what gives you the most bang for your buck. The only way you can really know that is if you keep records every year.

 

Lee Hood (20:32)

And then you can see when you make those changes, what effects they have, whether it's increased yields or increased calving rates, conception rates, things like that. That's the only way you can truly know what's working for you, is if you have good records.

 

John Peek (20:48)

Right? I'd just like to add to what you said there. I really wish people would spend more time with us, talking to us about what they're thinking about and what they're planning to do at Ag Credit or any lending institution. We're in the business of making loans, so the fact that you come in there and pitch us an idea and we say no to it, the reason why we would say no would be because we think it's too risky. Sometimes people come in and they don't know whether an idea is a good idea or not. And that's good to come and run it by us. But if we say no to that, we're not saying no to you as a person. We're not saying we don't want a relationship with you. We're not saying we won't lend you money in the future. We're just saying right now we think that's probably not the best move. At the end of the day, it's not our operation, but we want to be a partner with borrowers. I just think people sometimes take it hard if we don't go along with an idea they've got. But it's not necessarily that we think it's a bad idea, but it may not be right for you right now.

 

Lee Hood (21:51)

Right.

 

John Peek (21:51)

And if you'll talk to us more about it and we can analyze it and look at it any which way you want to, maybe it's something that we can work into in the future. You just have to take a little time. But I appreciate you saying that.

 

Lee Hood (22:05)

Thank you.

 

SaraVard Von Gruenigen (22:05)

I also want to kind of go over when you were talking about record keeping. A lot of farmers, that tends to be not their strong point. One, they want to be out there doing things. And then also, two, farmers have a strong conflict with Uncle Sam. It's kind of a battle that we often see where they don't have records, but what we have our tax returns. And so then we're battling the tax repair versus what we need to do. And so I agree with you wholeheartedly. When I have a borrower come in with good records, it's just like a breath of fresh air, and it helps them get accomplished what they need to accomplish. Because your operation may be meeting these certain goals, but those tax records that were handed to your taxpayer in a shoe box that they had to muddle through may not represent that. And so it's very important. So I'm glad you mentioned that.

 

Lee Hood (22:58)

Oh, thank you. And that kind of goes along with it's a whole picture thing, I think, because just like, if they had the good records, then when they pitched the idea, like John was talking about, yes, it can help you put all of it together and piece by piece get to where they want to go.

 

John Peek (23:14)

That's right.

 

Patrick Durham  (23:15)

And I've often heard the added tools and the tool belt. And John, you brought up a good point with the relationship. We are a relationship lender. Farmers look at us need to look at us more as a tool in their tool belt. We have lots of tools, Lee. You have lots of tools. You're professional in your field. We're professionals in our field. So it's a joint effort if you come in to us to see us, ask questions. We're here to work with you, build that relationship and help everybody out. That way we can build a lifetime of relationships there and do future business together and everybody be successful. Lee, being one of the younger members of the Ag Credit Board, how do you see the future of agriculture changing and how do you see Ag Credit changing with it?

 

Lee Hood (24:14)

Patrick that's a good question, and I think it really ties into what we were just talking about. And even though we've talked a lot about cost and inflation and economics and everything going on today, it's all very important. But that's not everything. A lot of farmers today are young. Maybe they're just starting out. They have families. A lot of them have full time jobs in addition to their farming operations. So their lives are hectic with those jobs with kids sports, kids FFA activities. So I think that they are looking for more than just a loan with a good interest rate. I think they are looking for someone to help them out, someone to have that relationship with, who will provide them great service, who will help them with their operations and offer them the sound advice like we were just talking about. I think they're looking for more of a whole package, not just get a loan and be done. And I think that's what Ag Credit offers, that's what Ag Credit was built on. In addition to that, I think they're looking for conveniences with technology and things like that, which Ag Credit, is adding those things into the mix all the time.

 

Lee Hood (25:31)

So I think today's atmosphere, along with what Ag Credit has to offer is really just perfect for what the farmers are looking for.

 

SaraVard Von Gruenigen (25:40)

We actually just recently added for some loan products where we can find digitally now.

 

Lee Hood (25:45)

Yes, we've talked about that at the board meetings.

 

SaraVard Von Gruenigen (25:47)

It is amazing how much we have used that product, because, like you said, and just like my husband and myself, we farm pretty good size, but we also have these W-2 jobs where we have to be at work the same time. Ag Credit is open, so it's been super handy for those folks that are coming to work and they don't have to take a couple of hours off work for some loan products. We can now do that online and digitally. It's great.

 

John Peek (26:12)

That is good, and I'm really excited. Agriculture is challenging right now, but if you look back through the history of America and agriculture, good managers are successful. And I think that kind of goes back to what you were talking about, keeping good records. And I've always heard you can't manage what you don't measure, so you have to keep good records and you have to know whether you're making money. And like I said, we want to be a partner in that. But I'm excited because agriculture is challenging, but there are people out there doing very well, and will continue to do so. Yeah, I'm excited about what's coming up.

 

Patrick Durham  (26:51)

In closing, Lee, we've had obviously a lot of great conversation today and a lot of topics I think a lot of people will get a lot of useful information and a little inside look on what some of the things you do on a daily basis. In closing, what would be a good piece of advice that you could give any young farmer right now? What would that be?

 

Lee Hood (27:16)

Probably, first of all, work hard. Nothing worth having comes easy. And that's especially true of farming. And the hard work never goes away, as we all know. But second, find a mentor. Maybe it's a family member. If your dad farms, if your grandparents farm, maybe it's your loan officer, just like we were talking about having that relationship with them, or the person you buy your supplies from. I know a lot of people seek advice from JP and from Pat, depending on what they want to know about. But no matter what, there will always be challenges to farming, and there will always be something to learn, which we've mentioned, too. But having that person that you can trust, that you can confide in, that you know is an expert in their field, they can help you through those challenges and help you to learn. And that will make you more successful.

 

Patrick Durham  (28:14)

Absolutely. And that's one thing I think is very important for younger people and even older people like ourselves. We're never going to stop learning. We're always going to learn something different. And there's always going to be somebody that's experienced what you're trying to learn. So find those people, search them out and ask questions. There's never a dumb question, right? Maybe every once in a while. But reach out to those people. Ask the questions, like you said. Find somebody to be a mentor and pick their brain. In the long run, I think both of you will learn a lot. They can learn something from you as well. It goes both ways.

 

Lee Hood (28:58)

Yeah, that's what I was just thinking. Even as the mentor, once you reach the where you've experienced enough that you can mentor someone else, you still find that you learn from that other person.

 

Patrick Durham  (29:09)

And hard work, like you said, that's a big thing, raising two teenage boys. Sometimes I wonder if maybe that's lost, but you know youfive-acre need a five-acre tobacco patch or something to let them experience what hard work really is. But I'm not sure dad wants to go back down that route. But Lee, thank you for being here with us today. We appreciate you taking the time out of your busy schedule and being here with us, and look forward to visiting with you down the road.

 

Speaker 5 (29:47)

This episode of Beyond Agriculture is brought to you by Central Kentucky Aggregate. Thanks for listening to the podcast. Be sure to visit Agreditonline Combeyondagriculture, access the show notes, and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.

 

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