Adam Pavelka--From Blue Jacket Values to Serving Nebraska Agriculture

 During National FFA Week, we sit down with Adam Pavelka to explore how “Blue Jacket values” helped shape a career dedicated to serving Nebraska agriculture. From his early days in FFA to his legal education and ultimately leading Agri-Affiliates, Adam shares how leadership, integrity, and relationships remain at the heart of his work in agricultural land sales and leasing. We discuss current trends in Nebraska ag land values, evolving lease structures, and the real pressures facing producers in today’s challenging farm economy. It’s a conversation about stewardship and how the lessons learned in FFA continue to guide agriculture today. 

Transcript

SPEAKER_00 0:02

Nebraska, it's not just a place, but a way of life. It's 93 counties that are home to innovative individuals, caring community, and a spirit that runs deeper than its hurdle soil. It's a story that should be told. Welcome to 93, the podcast.

SPEAKER_01 0:25

Welcome to 93. This is a podcast about Nebraska, its communities, its number one industry agriculture, and the people who make it happen. I'm Mark Folson, your host for this episode, brought to you by Nebraska's law firm, Rembolt Lutton. It's National FFA Week, a time to recognize an organization that has shaped generations of leaders in agriculture, business, and community life. For so many across Nebraska, FFA wasn't just about judging contests or the creed or blue jackets. It was about learning how to lead, how to communicate, and how to build relationships that last a lifetime. And when you think about it, those lessons, leadership, integrity, relationships, are the very foundation of agriculture itself. Today's guest embodies those things, those connections. He's an attorney by training and the owner of Agra Affiliates, one of Nebraska's leading farm management and ag land brokerage firms. His career sits at a unique intersection of law, land, markets, and people. We'll dig into what's happening right now in Nebraska Ag Land, recent trends in land sales and leasing, shifts in investor activity, and the very real challenges producers are facing in today's ag economy. Adam Pavelka, welcome to 93 the podcast. Give folks a little background on yourself.

SPEAKER_02 1:48

Yeah, uh grew up in South Central Nebraska, uh Webster County, uh farm and ranch raised there, grew up on a diversified uh uh row crop and uh operation. You know, growing up, we knew I knew Milo and wheat were actually the only two dryland crops that I knew. And now the farm is more uh corn soybeans, and always have had a cow calf operation and uh did a little bit of small bound, uh small amount of backgrounding uh of some calves in the winter months. So that's that's where I yeah, where I grew up. Uh graduated uh high school from uh Blue Hill in in Webster County. Uh had a great public school experience uh there. And from uh from uh Blue Hill had opportunity to go to University of Nebraska, Lincoln, where I I thought I was gonna be a uh engineer uh for a semester, uh matriculated as uh ag engineering major. And uh and uh got I I I knew after that first semester I got you know, probably one had one of the hardest earned uh V pluses I'd ever gotten in my academic career, but uh knew I knew I could cut it, but just decided uh uh uh that vocation wasn't my calling. Uh shifted focuses, switched over to agribusiness, and finished out my uh yeah, undergrad university career there at uh UNL with an agribusiness major, had some great experiences during uh during that time, got to uh intern with a company back then was called uh Novartis, now subsequently named uh Singenta, but uh had great uh sales and uh seed and chemical sales internship, had a great experience there, and graduated undergrad in uh 2002, and I was was giving a lot of thought to coming back to the to the family farm at that point. Uh you know, my my dad was farming full-time along with uh along with my grandfather, and and uh but uh I always I always tell folks corn wasn't seven dollars a bushel in 2002, it was it was closer to a dollar seventy a bushel. It was uh it was really kind of a a rough uh a rough time um economically anyway in the ag economy in Nebraska. So gave a lot of thought, got to know um some attorneys when I was an undergrad. Um John Bergmeyer uh being one, uh I'd consider a mentor of mine, learned a little bit about uh you know what what he did as an attorney and and uh yeah, considered him a you know great mentor. And and so I hadn't you know given a lot of thought about going to law school, but uh um but I had uh my uh my girlfriend at the time down my wife Ashley, her her father is an attorney in a small town Nebraska, North Bend. My father-in-law Rod Johnson, he's he's still practicing into his uh into his mid-70s, as many of them do, but uh learned a little bit just in terms of what he did in a small town practice and decided to send an application to to law school and uh he sent some scholarship opportunity my way, so I uh took him up on that. So started um um in in law school um in 2005 and had a great, yeah, great UNL law school experience there, great, you know, great faculty.

SPEAKER_01 5:12

Um you had one really good summer uh clerkship, didn't you?

SPEAKER_02 5:16

I I did. Where was that at? That was at Rumble Lefgy uh firm. Yeah. Great, great group there. And uh I clerked uh yeah with with you guys and you know uh excellent experience there. We gosh, we I got to do depositions with uh Pete Wegman and worked on labor and and uh and employment law issues with with you and and uh farm program limitation issues with Tim Clare. So had a really uh yeah great great summer experience there. And then uh also clerked uh for during during law school, clerked for John Berkmeyer and Hardigan Schultz firm there. So had uh yeah uh two two great Lincoln firms there that uh um really I you know think opens your eyes. You know, law school teaches you about the law, but I think uh a clerkship is a great experience. Also was able to uh enjoy opportunity in the civil clinic with Professor Roser there. So I think had some great kind of I'd say real-world experiences clerking and working in civil clinic and exposing myself to civil practice. And then uh had an opportunity after after law school, came back to Hastings, close to close to home, 30 miles north of the uh the home farm uh here in Hastings. Uh joined uh a busy civil practice out here. Uh Les Siler, Bob Parker were my yeah, in terms of my my first my first bosses as a as a full-time attorney, and really got to hit the ground running in terms of it was it was one of those I had you know some of my law school class classmates went to work and in Lincoln and Omaha and you know kept in good touch with them. Uh it sounded like they they spent a good more time than I did just in the background doing research and writing and and not a lot of client interaction in that you know those first few years, or just kind of in the background in some of those bigger firms. But coming out here to Hastings, it seemed like you had your, yeah, we week one, you had your first your first clients. Had had great, great supervision, great mentorship. It just seems like you got to you got to hit the ground running uh right away in uh in law practice in central Nebraska, just because the there's as as you and I know, there's just uh there's you know simply a lack of of rural attorneys in outstate Nebraska.

SPEAKER_01 7:41

Who would have thought that there'd be people would say there's not enough lawyers, right?

SPEAKER_02 7:45

Yeah, yeah. Yep. We got several of these rural counties out here that don't have any attorneys. And and Hastings, I always say, you know, even today there could be I think I think there could be five to ten attorneys could move into town tomorrow and we'd and and they'd all still be busy. So I was in law practice for roughly about 10 years, and I I felt a little bit of a little bit of a calling. I would say my my law practice was very, very office centered. I I would get to the office, a lot of times show up early just to keep ahead of the work, you know, in terms of document review and uh keep up with correspondence and everything. So I was you know in the office early. It's in you know, 8, 8:30, the clients would start calling and start coming in appointments. You have a busy day of appointments, and it seems like you were uh, you know, oftentimes working well past five as well to keep up with uh with all the work. And and I I get to the end of the day and I'd say, Well, I I haven't seen the light of day. I've been in this office since 6:30 or 7 o'clock this morning, and it's now six o'clock again, and I I literally haven't stepped outside and felt like there was something, uh yeah, something for me to do that, you know, where I got to utilize my skill set that I've developed in law practice. And I'd always thought about getting my brokerage license and getting into real estate brokerage and and farm management was was was always a calling. And I had a uh at a mutual client that I worked with. Uh, mom and sister lived here in Hastings, and their farm manager uh was Jerry Weaver, and Jerry's uh with has been his career with agri affiliates out in North Platte. Jerry managed uh the farms for this family. They had several farms in southwestern brassica and eastern Colorado, and Jerry was a uh, yeah, got to know Jerry well. We had a very, I describe him as a very um high maintenance client, is how I describe it. Very appreciative, great folks, but they just always had there were four very you know dynamic siblings and mom and and uh there was just always always something going on in terms of so I I'd meet with Jerry a couple times, yeah, a couple times a year. We would get together and he'd he'd he'd present the farm plan for the for the year, and I got to review that and I'd describe what was going on with the legal friends. Got to know Jerry very well. One thing I learned from Jerry is like this guy really knows what he's doing in terms of this, this guy, in terms of like he's he's held in very high regard uh by his clients. And I was just always impressed in terms of his command on you know the finances, the accounting that he was doing for the clients, and what he was doing in terms of to improve their farms and and and make them better and give them a you know a profitable return, but also keeping an eye on on long-term sustainability on those farms. And really impressed with Jerry and got to know over years. And I just one one day in my law office, I called Jerry up and I says, Jerry, says, You ever thought about having an office in Hastings, Nebraska? And he says, you know, Adam, you know, I think maybe if we found that right guy.

SPEAKER_01 10:56

And you said I'm the guy?

SPEAKER_02 10:58

Yeah, I said I think I might I might be that right guy. And uh I'd already gotten my broker's license and talked, you know, a few weeks with with Jerry and his fellow shareholders with agri affiliates, and it just seemed like a very, very natural fit. And uh they were very, you know, very generous in terms of we leased some office space here in Hastings. They hired, you know, got nice office equipment, hired me a full strike, full-time administrative assistant, and well, got off the ground running. And uh Jerry said, like, well, it's like Hastings is great, but so we don't have any clients, you know, around Hastings. That's just an area they had long-standing offices in Kearney and North Platte. And he says, We don't really have any clientele. I says, Well, I I think I can develop you know that that client base. I was still doing law practice to keep my keep my family, uh, keep my family fed during that time. So still doing some law practice. But about the time I transitioned uh into farm management real estate brokerage, there was a new farm bill that was passed back in 2014. And it was a pretty dramatic shift in terms of what was going on in the landscape uh with regard to uh with regard to uh you know some subs some substantial changes uh with regard to base acres relating to farms, abilities to increase um your your your PLC yields, your price uh loss coverage. That was one of the programs, and you could increase your your your uh you could change your base acres, you could increase your yields that were associated with those base acres. And then there was this big five-year decision you had to make between two very distinctly different programs. One was the, you know, and there's they're still part of the farm bill today, the ARC and PLC programs. One's more of a revenue program, one's more of a price loss program. And I just delved in, found everything that I could I could read on that topic in terms of and developed a PowerPoint uh slide deck on it. And and I went and I spoke to anybody that let me in the in the room in terms of so I spoke to attorney groups, to um bank, you know, bank groups, um, went out to I went all the way from North Platte to um I talked to some uh crop insurance clients, things that nature, just kind of any anybody that would let me just talk about this this bill that everybody's like, gosh, everybody was it was it was new and decision making was difficult, and then developed some expertise on that. And that then in turn, I think created some credibility. And then I started having my my first opportunities where people were offering, say, hey, you you've got this figured out, could you manage manage our farms? That kind of led into uh my first uh management clients, and then it seemed like not long after that, I started uh started some some opportunities to do some brokerage work in terms of listing and selling farms and and and conducting auctions for for clients. So just those kind of springboarded off one another and really found, you know, I still do farm management and uh you know love that work, but really found my my passion in the in the brokerage, uh brokerage sphere. It's just something that I found. I always I always joke with uh the attorneys that I know that and and you know, Mark, you know, you you know what the sign of a uh a good legal settlement is, don't you? What is that? Two equally dissatisfied clients, right? You you kind of you negotiate back and forth and and you and you reach this resolution, but at the end of the game, it's like you know, nobody's you know 100% happy at the end of the day. Everybody had to give up a little bit.

SPEAKER_01 14:35

That is a that actually, I mean, I agree with you. That is a good settlement, right? That that's the reality it was fair.

SPEAKER_02 14:41

Yeah. But what I what I found in a real estate transaction was that I could have two equally elated clients on both sides of the ledger, in terms you think about it. I've got a seller that you know is able to you know liquidate their farm, maybe reinvest in something else, or creating them the opportunity to explore the you know, maybe the retirement of their dreams or you know, provide opportunity to kids and grandkids. So you have this seller that's you know smiling ear to ear around the closing table, and then you have this buyer that's sitting there, it's like this this might be the farm, maybe it's a farm buyer, and then he's he's been looking at this quarter section his entire life and he's wanted an owner. He finally, finally owns it. So I I I found in terms of just a great place to be in terms of being part of real estate transactions, is that I've got two uh you know, two parties where gosh, they're both, they're both, you know, grin and ear to here, and I I got to be a part of that. So that's that's really um really where my passion is. And I I I still enjoy many parts of farm management. I've got a full-time farm manager that works with me that does uh you know, does a lot of the you know the day-to-day, and I'm still, especially this time of year, a lot of lease negotiation going on, still very involved with farm management, but really kind of found my yeah, in terms of I I think my calling in terms of uh brokering transactions, helping leading people to you know what they you know, in terms of exploring, you know, maximizing value for them, and then potentially helping them, you know, reinvest those funds in other light kind of real estate or whatever the case may be. But it's just yeah, really, really enjoyed. And that's yeah, that's what's brought me to the days.

SPEAKER_01 16:19

So Webster County growing up, what was your license plate prefix?

SPEAKER_02 16:23

45. Yeah, I'm now uh 14 county and now live in Adams County, south of Hastings. So yeah, but grew up 45, still have a lot of farm-plated vehicles in Webster County. Yeah, 45. And I always I always say one of the the only the only time I've won a radio call-in show was calling into Caribbean. Yep, in terms they they used to have, and I think we you should ask to have them bring it back, but they had one, it was called Know Your County Seat, in terms of like you'd call in and you didn't know, but they'd ask you say, Okay, this, you know, they tell you, all right, what's um, you know, in terms of Jefferson Jefferson County saying, well, and they'd say, Well, here's the here's the county, and you had to come up with county seats. So you said, you know, Fairberry, in terms of you know, that was uh that's the only radio call on show I ever remember winning.

SPEAKER_01 17:09

They still they still do monogram Monday money, so I still uh occasionally I always listen for my initials, and so far I've never heard them called, but maybe someday they'll be you know, there's the the pot's probably up to like 93 dollars or something right now. Yeah, yeah. So you we've met our quota on Blue Hill graduates. I can't tell you how many folks who graduate from Blue Hill have been on this podcast. But uh tell us a little bit about that experience at Blue Hill. Why, why, why has it produced so many really fantastic people?

SPEAKER_02 17:36

Yeah, I I think largely I I I I've looked through your interviees, and you've yeah, you've had uh a couple of my great mentors on that, Kent Zeller and and Dewey Linneman was the and Dewey was the longtime ag ed instructor, FFA advisor. And Dewey just he just had a great knack of connecting with with those students and and and and whatever their whatever their skill level was. I mean, he he seemed like he he'd connect with, you know, he had you know several state uh FFA officers, had a national FFA officer, he would connect and motivate those, but it's just he'd had a he had a great ability of of also just you know the the you know maybe the student that's you know struggling, but he's got a great knack for for for welding or livestock judging. He just had a great way of encouraging you and mentoring you and you know to to get out there and explore all the opportunities that ag ed and FFA um had to had to offer. So I I credit the guys like that, the the Dewey Linnemans, the Kent Zellers, that they were, I mean, those guys were very close. We would we would travel together to National FFA convention. We had Ravenna up the road, Kent Zeller, and they they would they would drive down roughly an hour down to Blue Hill and he'd have he'd have those students. We we'd host them kind of as a host family for a night. And then we'd then we then we'd pile in you know the 1980s, 1990s conversion bands and drive down to Kansas City to National Fake Adventure. But you know, you look back and say, well, that was kind of that was kind of silly. But like these guys really had a method to what they were doing, what they knew. And one of the most valuable lessons I I learned from Mr. Linneman, we called him L, or all people now, as you're graduate, call him Dewey, but Dewey'd always is like Adam. He says, like, you'd ask him, you know, you know, you'd ask Dewey, what do you know? He says, Adam, it's it's it's not what we know, it's who we know. He was he you know he he he taught me probably the most important lesson that I learned in junior high and high school is just it's it's it's important to study and work hard and develop all these skills, but just as importantly, if not more importantly, is to get to know these FFA members from Ravenna when you're down in Kansas City. You're not there just to learn and your skill set, but you're you're you're you're there to expand your mind and expose yourself to other people and network with these people. And and and that lesson, like I was a little skeptical, probably junior higher freshman, like, oh no, it's just you know, like I'm gonna be successful because of my hard work and my academics and things like that. But you know, you you look back decades you know beyond, you look back at those lessons, like that, those are the important lessons in terms of like that that networking. And I've got a my my oldest star, she's in FFA right now, and I I try to encourage that same thing. It's like, all right, you're going to this FFA leadership camp or you're going to uh career development events or LDEs and Aurora. It's like it's important to you know be there, work hard, but it's important to get to know those people around you because I I look at it throughout my career, it's just countless people that were that network started in FFA, that you know, and then that network expands as you went to the University of Nebraska. You already had a great network as you knew a lot of these people through FFA at the university, and even to even through even through law school, and even even clientele to this date, you know, remember you from those, you know, those FFA experiences and just that importance of networking. So I I feel like that's the important uh aspect that you know Dewey he just had an ability to to motivate students to get them to experience and and and and thrive those uh those those FFA um you know just getting you outside of your your normal wheelhouse and just getting you with a group of people that you know all of a sudden become lifelong friends.

SPEAKER_01 21:23

So these your accolades for FFA are appropriate. This episode will actually run during National FFA week. So that's awesome. Hopefully, folks didn't know anything about FFA. They now are understand just what an important organization it is.

SPEAKER_02 21:37

Yeah, I feel honored to be the FFA Week guest.

SPEAKER_01 21:42

Hey, let's segue into Nebraska Ag Land. Uh can I give folks an idea? What are you seeing out there? What's going on currently with Ag Land, values, sales, things like that?

SPEAKER_02 21:52

Yeah, I'll kind of break it down. We've got a you know, a couple you know, primary markets, you know, one of which is you know, they're obviously a A lot of grassland in Nebraska, the pasture rangeland complex. We're at some of the highest points, you know, in terms of the cattle, cattle prices are at uh at record highs. Um, and you know, grant grassland prices uh reflected. I think they almost should reflect it a little bit more, just in light of where we are economically in the cattle cycle and prices and the and the low numbers that have created these hard prices. But I think what's keeping a little bit of a lid on the high prices in grass is just the the sheer lack of numbers. You you think about it, if you're if you're uh a rancher that's having these you know record profits, and you said, hey, I'd like to maybe expand this, expand this beef herd. Um, it it is generally cheaper to lease more pasture rather than own it. And and owning pasture, you know, from a ranch, it makes the most sense for an active rancher, obviously. But in terms of with low numbers right now, we're we're seeing you know that there's still good demand for grass, but with just lower numbers, it's just almost a supply-demand um influence right there. Where in terms of you know, grass leases and prices for grass should be higher, but just due to the low numbers, you know, you got to have the cattle and the calves to field these pastures where a lot of guys are saying, well, gosh, I don't want to, you know, I can lease grass. You know, a lot of these cow calf producers are having opportunities to lease all the grass that they want without having to go to the bank and and borrow to buy the next ranch just because the numbers are low and there's opportunities, opportunities to lease. So I think that's keeping, but still a very robust market on the on the grass side. But I see it's just kind of somewhat that lack of numbers has been a double-edged sword in terms of valuation, in terms of lack of numbers, just gives more opportunities to lease, which I think some kept some pressure off of the price of grass. Turn the channel over to the row crop uh arena, and that's we're we're we're in a we're in a tough cycle right now in terms of you know, grain prices are on most of our commodity crops in Nebraska are below uh the cost of production. So you got guys looking, staring down the barrel of you know 2026, and you've got you know producers that are you know, if you're looking at it just from a a grain revenue standpoint, cost production, you know, most of these guys are are are are looking at red, you know, red numbers right now. And that's that's a tough place to uh tough place to be in terms of that. And it's it's it's started to force some liquidation. There'll there'll be more to come, unfortunately. But even in light of um$4 corn and$9,$10 soybeans, and there's and there's cash bids on corn that are sub-4 you know right now. I mean, if you're selling number two yellow corn in uh um in Hastings, Nebraska, right now, you're you're sub-4, well below the cost of production. And but as you translate that, you you think that would have more of an impact on row crop land price. But what we've seen in the last, I'd say, 12 to 18 months as this ag economy's cooled off, um, still really strong land prices in terms of you know things that have been privately transacted, things that have hit the the public uh auction block have still commanded really good prices.

SPEAKER_01 25:26

Why is that?

SPEAKER_02 25:27

I think some of it's just pent-up demand in terms of there's there's still a lot of money that was made over this this last cycle that you know, in terms of we we had the peak back in 2012 through 2013, and then there was kind of a lull cycle. And then we kind of had a surprise cycle here. I'd say 2021 through 2023, where corn prices got back up, corn and bean prices got back up to those same highs as what they were back in 2012. So we had this another another spike up. A lot of money was made in agriculture, and a lot of that money just got you know put away and reserved for the for the right time. So you've got um some well-healed uh producers that just are ready to buy that next farm that is. The opportunity just hasn't happened in the last few years. So when that farm next door, um in the same section, wherever the case may be, farmers are ready to pay up. They'll pay that, you know, in Platte Valley agriculture, you'll see the nine, 10, 11, 15,000 sales, and you've still seen some in those ranges, you know, even in the last six months, which you think, gosh, you know, corn price is terrible, bean price is terrible. You know, why are these guys still still doing that? I think that there's there's pent-up demand. Um, there's also become you know, some what I call institutional money that is, I think, ready to deploy more capital into Nebraska uh farmland in terms of that. That's why I think I keep keeps an underhand on some of these prices from going lower, is that you've got uh a pool of money that's you know ready to invest. I think they're hoping for a little bit more of a correction before they deploy more. But I think that the demand from um active farmers and ranchers, I mean, that's that's still your your number one, uh, your number one buyer comes from that, but there's there's institutional money out there. And you look, you know, it in terms of you know where a farmer is right now, it's like, okay, it doesn't look good, but the USDA steps in and and you know, a lot of times bridges the gap in terms of get these low, low prices. You look at you know the USDA recently announced this bridge program payment where most uh corn soybean farmers will be getting somewhere in the neighborhood of$30 to$43 an acre. Um, not enough to bring them in the black, but that that's great news. They'll likely get the sign-up just started uh Monday of this week on that program. So you have this bridge program that's um generally it's it's it's there designed to uh help these farmers through this tough, tough window that was created. You know, the administration's trade policies has has unfortunately had a negative, uh negative effect on uh especially exported grains. So we've got this bridge program, we've also the the uh One Big Beautiful Bill Act, uh, increase the reference prices that are in the main commodity program. I referenced those PLC ARC programs to increase the reference prices that those are based off of, that'll likely create uh a nice payment uh for these guys in terms of October of this year. Those are actually based off of last year's, but they get paid in October. And then there's been some crop insurance, uh, some help on the crop insurance front too. There's some uh a couple new programs that have gained some steam that uh if guys signed up for those for those programs last year and this year that uh help in the event of a downturn like this. So the combination of USDA and federal crop insurance program, I think keeps uh still keeps some optimism for guys. It's like, hey, we're gonna things look bleak, but there'll be some USDA help that that gets us through this storm. And you've got this group of perpetual optimists too. They're they're they're thinking long-term, they're thinking generationally. It's like, all right, this this will, this is this is a cycle, this will, this will come back. And I think that continued optimism also helps keep an upward hand. And you get into some really uh robust areas too. I'd say you go to northeast Nebraska, cattle feeding country, you know, you get to Cumming County, and there's there's been some uh uh there's a couple dryland 80s that sold the last six months up there. Dryland 80s that brought north of uh my understanding is north of$17,000.

SPEAKER_01 29:34

Oh my gosh, you're kidding me. So I mean that the I've heard the I've heard those prices in Iowa, but not Nebraska. Wow.

SPEAKER_02 29:40

Yeah, so you you get you get into some of those areas where you got just uh the the wealth density around these you know multi-generational feed yards, and they just you know that ease for sale. We've got either the capital uh in the bank or ability to borrow, like we gotta own it, we have to expand our footprint. We need ability to you know spread our manure and raise more, uh raise more feed. And it just seems like you get in some of those, and I think those areas are going to weather the the best. There have been a handful. You get into some um uh lighter traded areas, you get away from some of those, you know, ethanol plant areas, feed yard-centric areas, um, you know, seed corn production areas, also a big thing, and you know, across the Platte Valley, Nebraska. You got an area where guys are able to uh have a you know get a premium price for for raising corn, where you'd normally raise number two yellow corn, these seed corn areas are very coveted. You go to that York, Waco area where there's you know, not I'm not surprised to hear of a$13,000 to$16,000 sale in that Platte Valley seed corn production just because those those guys are just it's just such a competitive environment. But then you start to you start to get out from those areas. There have been some of these weaker farms. I always say when you start to see a correction, and I'd say we've started to see some, you've started to see some weakening. There was a there was a sale here in in our area, kind of a little bit south of the seed corn production area. There was one in Adams County, northwest of Hastings. It was a it was an online only auction, competitor had it. And there was a pivot quarter northwest part of the county, there was a pivot quarter down by Red Cloud, uh kind of a rolling farm there, and then they had a farm out by Holdridge. Holdridge is always a pretty robust area, and they had these three farms all irrigated, one by Holdridge, gravity irrigated. At the end of the auction, the sale prices were uh 10,150 an acre out by Holdridge. The one down by Red Cloud was 6,600 an acre, which was probably a little bit light. That's kind of a rolling, good, good, good groundwater area, but restricted groundwater, rolling farm, 6,600 an acre. And then there was a farm in northwest Adams County. It's kind of in a fringe area. Adams County's pretty good. We started getting some sandy spots on the north side. So this farm was kind of transitional, had a good south 80, north 80 was uh starting to get a little bit sandy. And at the end of the sale, that that farm it got one bid at 5,000 an acre. And you're thinking, gosh, you know what, what happened? Um, there was some negotiation that took place after the sale. My understanding, they all went under contract with one one seller, three different buyers, but the one at Holdridge stayed at 10,150, the one at uh um the one down by Red Cloud, they got up to 7,500 an acre up there, which is probably close to that, that localized market there. And then the one at Adams Countyville only got to 5,400 an acre. And you're thinking, gosh, is that is that light, or is that the telling signs of things are starting to come down a little bit? On your that wasn't an A plus farm up there, that was probably a B minus to you know C minus range farm. You're you you start to see when you get in a tough rag economy, the good, high-quality class one, class two soils with great groundwater are still bringing really great prices. But when things start to contract, buyers get more pickies, like I'm not gonna, you know, I'm not gonna spend that money on that marginal farm. You start to see those slip a little bit. And I'm starting to see that in some of those uh you know less robust areas in Nebraska where I think there there are going to be some buying uh opportunities and some some retreating. But as a general rule, though, the land market's still really good.

SPEAKER_01 33:12

How are how are farm leases evolving? You know, most folks either you know, cash rent or some type of crop share. Is there anything innovative or new going on in the in the lease space?

SPEAKER_02 33:23

Yeah, I would say the the biggest trend in terms of you know, and we see a lot of this in the farm management space is you know, in used to see a lot more sharecrop leases in terms of I I love sharecrop leases, they can be fair and in both good and and and tough economies. But as the competition for you know farm ground has increased, the you know, cash rent offers are uh you know becoming hard, you know, hard hard to ignore. And as a farm manager, I need to evaluate all these different types of lease options. And so, you know, cash rent uh has become more and more predominant in leasing ground. And it it's it but cash leasing has become a lot of people ask me, it's like Adam, what should cash rent be? And I always say, like, that's a complicated question. You know, like what's what's your farm, what's its production capabilities, what are its advantages? Is it near a feed yard where we can get access to uh to nutrient? Is it you know, what's your groundwater situation, what's your cost of pumping? You know, there's a lot of things that go into that loaded question. And uh in a cash rent lease is I always think is some of the most difficult negotiating that we do, especially in this tougher economy, because our pie has gotten smaller and we're we're we're trying to you know be an advocate for a client, a landowner, but you need to be empathetic. You want these tenants to take care of your farm. So you're looking at this revenue pool, which is becoming in 2026, there's gonna be a substantial amount of USDA money uh that's gonna be part of that you know, revenue pool for that particular uh that particular farm, and some from potentially crop insurance as well. So we look at look at how do we carve that up. So the I would say the trend has been have gone from in and it's tough to fix a cash, especially for a multi-year situation. There used to be a lot more three to five year leases. Now, with just the volatility that we've seen starting since about 2006, 7 through now, you've just seen you know, corn's you know bounced here in Adams County from$3.50 a bushel to$8 a bushel. And it's just, you know, how do you set a cash rent during those volatile times? So what we've gone to a lot is the term of a flex lease has become pretty pretty common where you set a reasonable base, kind of a guaranteed base that's your your cash rent base, and uh you set that base, you negotiate that, but then you create some sort of generally a formula that's a function of price, yield on that form, or a combination thereof that creates, and there's numerous pre permutation. I mean, we've got several in this office. We try to keep it simple, but it seems like they all take on their own flavor. But your your general design is to have a fair base, but then if the economy does turn around, if you've got great yields and if prices improve, or a combination of those two things, it equates to a factor that allows for a payment of a fair bonus to your to your landowner client. So I would say that's that's been the you know the predominant trend and understanding um you know what that um what that should be. And that I feel like that's the art of what we do as as farm managers is understanding the economy. Okay, what can this farm raise? What is our what is our local basis opportunities? What are we going to market this crop for? What are our cost of production for that farmer? Because that's that's one thing that's the unfortunate part is like our prices have gone down, but our cost of production have remained stubbornly high. You know, a bag, I remember I bought my my first bag of seed corn on my family's farm, probably in the late 90s. I think I spent$85 a unit. I think my average cost on my family's farm for a unit of seed corn is$328 a unit. So, like, you know, the the the the cost of in and the the scale of what it's taken in input prices, nitrogen, phosphorus, and the you know, the cost of everything is just remained high. So it's created this really, really, you know, difficult situation in which to negotiate. But these flux leases can help create some some breathing room for these tenants, but then also helps create you know some opportunity for some upside. So you see uh you know, you see a lot more flex leases. But uh yeah, because that cash rent, yeah, some some of these leases that have already been executed will probably be too high for 2026. It just, you know, there's there's still some rents that are just probably still um still too still too aggressive because there's you know the the appetite is is is still there. Still guys, well, at least we get you know, it seems like several calls a month saying, hey, if you got a farm that comes for lease, you know, come talk to us, come talk to us, these tenants that reach out to us. There's still a lot of demand, but long-term sustainable profitability is important for both sides. And sometimes for us as farm managers, it's it's educating our own clients about the economics and saying, like, I realize like we can get you this number, this you know, you know, four or five hundred, you know, like some of these high-end cash rate numbers. Like that's if if that's what you want to do, but a lot of times it's I find it rewarding to educate that landowner client about you know the economy that we're in in terms of where where the revenue is, what their farm can produce, here's their cost production. And let's let's find that because most most of my clients find out like, hey, they like these tenants, they want to see them succeed, they don't want to see them you know in the red here in 2026. And these flex leases, those, those, those clients that want to do uh flex leases kind of create some opportunities for that. Share crop's another good way. And share crop, a lot of folks, a lot of clientele don't like with sharecrop looks like well. It's like I, you know, I don't want to market bushels, I don't want to do those things. That's where we can step in as far managers, like, hey, we can get you a great return year in, year out on the share crop model. We'll take care of all your crop insurance, we we market your grain, we do all your accounting. So you get that upside on the um on the when when when yields and prices connect, you you you get that upside, but we we kind of take all the hassle out of it in terms of taking care of all those things for those those clients. But yeah, I'd say being able to shift a crop share and having creative and innovative uh flex leases, I think, is a way that we navigate through these tougher, tougher areas.

SPEAKER_01 39:29

Adam, uh a few years ago, uh carbon capture contracts or carbon contracts are starting to become uh a big thing, but then no one really saw them. Are you seeing any of that out there, that activity right now in Nebraska?

SPEAKER_02 39:42

Uh I am. I would say especially in uh in ranch country, uh seeing uh seeing uh seeing that uh you know the the ranch country, seeing more carbon captured you know contracts, and it seems like that seems to be a focus here. Seeing it also in row crop. I actually just uh read an ad yesterday, I believe it was Bayer coming out with a carbon capture in the row crop sphere. You know, I think they're advertising payments up to$20 an acre, which you know, in a low margin environment,$20 does make a difference. But I've seen it um probably more robustly in in ranch land across Nebraska. Because I think it grips those that want to buy, you know, offset their carbon inputs. I think ranches give them a better opportunity to do it on a larger scale, because you can go up to you know Brown County or Rock County or Cherry County and Sydney's counties and and do a carbon capture lease on 6,000, 12,000, 20,000 on any of these bigger, bigger ranch spreads. And that ranch land, I think, gives those captures a better uh opportunity to sequester carbon. You've got you've got a landscape that's in permanent stands of grass generally, has more opportunities for carbon sequestering. So I think it's really you know taken off in the ranch context. I think you you you saw some on the rope.

SPEAKER_01 41:07

Yeah, correct. Uh but but it the it that kind of went away, right? It was kind of a hot thing, at least down in eastern Nebraska for a while, and then suddenly you weren't hearing anything.

SPEAKER_02 41:18

Yeah, yeah. But I I'd say it's it's it's starting to I I just just uh your timing of your question. I I just saw you know Bayer, you know, the largest uh seed and chemical companies in the United States. I mean Germany, uh you know, German-owned, but like big footprint in the United States, like they're they seem to be getting back into it. Yeah, just in and that was just in the last day, I think I I saw that. I I kind of thought it was fading away on the row crop side, but it it seems like they're uh they're they're at least making another push on the row crop. But I'm seeing it in the rain. Like I'm went to I went to a real estate seminar down in uh down in Tucson uh just about a year ago and got to visit with some folks up um uh she was from the University of Wyoming, and she's become a bit of a specialist. She's a PhD candidate student there, and and she spoke just for a whole hour on carbon sequestration, what she's seeing, and those types of those types of contracts. And and she and she would say, yeah, I would say in the bigger ranch circles, there's still I'd say a push from what she's seeing. And it was it was great, you know, great seminar to to learn. Because I I think that there uh I think there's gonna be opportunities ahead for producers to be part of that carbon capture and be able to capitalize that on their on their farmer ranch.

SPEAKER_01 42:34

Adam, if folks want to learn more about you and agri affiliates, where should they go?

SPEAKER_02 42:38

agriaffiliates.com or any of the socials too, yeah, Instagram, uh, X, uh, Facebook. Yeah.

SPEAKER_01 42:47

So something we ask all of our guests, you get one word. Adam, what is the one word that to you best describes the state in which you were born and raised, attended the University of Nebraska in Lincoln, both undergraduate and law school, practice law in Hastings, and now own and run agra affiliates. What's your one word for Nebraska?

SPEAKER_02 43:05

I'm gonna say fertile. I'm gonna use an agonalogy of just you know, I just think about all the opportunities you know, through you know, Blue Hill, University of Nebraska, and clerking with Rembrandt and Harding and Schultz and Lincoln, all these, yeah, all these opportunities. We just have a great and fertile landscape to develop young people and uh into long-term professionals.

SPEAKER_01 43:26

Adam, thanks for joining us. Yeah, thanks, Mark. Folks, if you enjoyed this episode, consider subscribing on Spotify, Apple, or your favorite podcast app. Give us as many likes as you can and share it with someone who might find it of interest. And please keep on listening as we release additional episodes on Nebraska, its great communities, Nebraska's number one industry agriculture, and the folks who make it happen.

SPEAKER_00 43:51

Thanks. This has been 93, the podcast, sponsored by Nebraska's law firm, Rembolt Ludke.