Using a Custom Harvester - Factors to Consider January 30, 2005

1. Using a Custom Harvester - Factors to ConsiderJanuary 30, 2005 Brian Holmes Extension Agricultural Engineer Biological Systems Engineering Department University of Wisconsin - Madison

2. Why do dairymen hire Custom Operators ?Milk production suffers during harvest time.Crops suffer due to lack of time to manage them.Current equipment line is not up-to-date. Want to spend more time with cows.Want to spend more time with family.Willing to give up control of cropping. Compliments of Chuck Grimes

3. Benefits of a Custom Operator Rapid Harvest -Fill storage quickly -Might beat the weather -Keeps hay at same stage of maturity -More uniformity of forage quality -More uniformity of forage moisture (continued)

4. (continued) Benefits of a Custom Operator Reduced Capital Investment, Borrowing, Leasing Lower Cost of Production No Hired Labor Custom Operator’s Labor Is Well Trained and Works Hard Less Oversight and Scheduling Variety of Services Available Higher Milk Production per Ton or Acre

5. Limitations of a Custom Operator Some Existing Equipment Will Not Be Used - ”If it doesn’t fit you must acquit” - Cutting in 4 days and chopping in 1 day doesn’t work Rapid Harvest - Need to be prepared to fill/pack storage - Need to be prepared to cover storage (continued)

6. (continued) Limitations of a Custom Operator Producer Must Give up Some Control - Scheduling start date - Plans for harvest decided early - Producer’s equipment and labor comes under the control of custom operator - Independence can be a handicap to the system

7. (continued) Limitations of a Custom Operator Communications Must Increase - Specify feeding needs - Specify feed preservation - Status of crop maturity - Services required Quality Control Determination - Moisture content - Particle size determination - Corn processing - Inventory identification - etc.

8. Degree of Trust vs Time Together Distrust Custom Operator Full Trust Time Customer Distrust Communications not established Unreliable/unpredictable performance Parties behave more independently Issues can be external forces or because of internal behaviors No loyalty established Good Communications Consistent performance Teamwork to resolve issue Most Issues caused by external forces Loyalty to each other Mutual benefits

9. Building Confidence Producer Custom Operator Letter of credit References Personal References Insurance certificate Pay on time Perform service adequately and in timely manner Communicate needs How break downs/employee no shows are handled Deliver on promises Obtain help from competitors - don’t jump the gun or lease equipment to get the job done (continued) (continued)

10. (continued) Building Confidence Producer Custom Operator Be flexible Be flexible Have labor and Equipment Reliability equipment ready to go - New Equipment - Parts Inventory/access Commit to agreement - Preventive maintenance early (winter) Seriously consider advice Give good advice Plant different maturity corn to open harvest window Avoid surprises – Avoid surprises – communicate early communicate early

11. Contract = meeting of the minds = mutual agreement 1. Offer 2. Acceptance 3. Consideration Written vs Verbal - Written is more defensible in court - “People remember things differently” Protects all parties

12. Written Contract Identifies the parties What each party will do What each party will not do Service cost rates Penalties Conflict resolution Warranties Limitations on damages Have attorney read Signed by all parties

13. Communications Producer Custom Operator Talk Not Listening Talk Not Listening Talk Not Listening . . . . . .

14. Communications Producer Custom Operator Not Listening Talk Not Listening Talk Not Listening Talk . . . . . .

15. Communications Producer Custom Operator Listening Talk Talk Listening Read Written Materials Written Materials Read

16. Its all about TEAM WORK! Compliments of Chuck Grimes

17. Feed Production Team Dairyman Crop Producer Harvester Storage Filler Agronomist Nutritionist Feeder Lender Others?

18. Goal Produce high quality and high quantity feed with minimal losses in quantity and quality at a reasonable cost Objectives: Select correct varieties Plant on time Fertilize properly Harvest at correct time Avoid harvest losses Store properly – avoid storage losses Feed properly - Proper feed-out - Feeding frequency

19. Communications Coach - Communicates Goals and Objectives to the Team Members - Assures Team Members Are Listening - Assures Team Members Are Communicating with Each Other - Assures Team Members Are Performing Up to Capabilities

20. Teamwork Team has overall Goals and Objectives - Tasks directed toward meeting Goals and Objectives Each team member has Goals,Objectives and Tasks Coach focuses team members on overall Goals and Objectives Who is your coach?

21. Communications On-Farm Visit - View feed storage - View traffic routes Provide field maps - Acreage per field - Access - Landmarks - Field names - Special features

22. Communications Record keeping - Forms to use - Crop yield information - Equipment hour meter readings - Equipment settings Complaints - Directly to custom operator not others - Explain what you want to make it right - Complain early - Complain calmly

23. Producer Can Reduce Harvest Time and Cost Fields close together Fields close to farmstead Large fields of regular shape Smooth fields Remove stones and other obstructions - Mark obstructions Wide gates and drives Farm roads are smooth Maneuvering room at storage Maintain communications - Work through custom operator - Don’t micro-manage custom operator’s employees

24. Comparing Custom Operators’ Services What services are available Charge rates – per hour, per acre, per ton etc. Reliability - References - Past performance for you - How breakdowns are handled - How much reserve capacity *extra equipment * extra labor * how tightly scheduled (continued)

25. (continued) Comparing Custom Operators’ Services Insurance - Liability (on/off farm) – certificate - Workers compensation Written vs Verbal Contract Payment Schedule - Pre-Pay - Before leaving the farm - Soon after work is done - Monthly payment plan - Discounts for early/prompt payment - Late payment penalties

26. Questions?