The old saying “a good tide raises all boats” may have been inspired by mariners, but it could easily apply to agriculture as well. As most ag retailers will attest to, the past few years have been exceptional in terms of grower spending as commodity prices have put a good amount of extra cash in all of the hands that make a living from agriculture.
And it looks as if the never-ending quest for new energy sources will provide even more good tides for growers. For many years, many growers have received some income from power companies by hosting wind turbines on their land. Now, an oil boom is aiding growers in states such as Kansas.
For example, one Anthony, KS-based wheat grower named John Walker recently received $1.5 million from an oil company for leasing out mineral rights on 2,000 acres of land. He will also get royalty payments of 20% from any oil produced on this land.
But instead of merely sitting on this money, “Walker went straight to the John Deere store and swapped some of his old farming equipment for two tractors, a baler, a swather and two pick-up trucks.” And I’m betting some of this extra money will end up with Walker’s local ag retailer in the form of fertilizer, crop protection products, seed, custom application or all of the above.
Of course, this all calls to mind another popular saying: Location, location, location. As the nation’s appetite for energy increases, power companies will ultimately come calling on those individuals that own the land – and many of these folks are growers. And this raising tide of good fortunes should mean good things for all of ag for years to come.