The New American Farmer

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productivity."

In the past five years Pat has been expanding, and trying to beat the wild fluctuations in crop prices, in another way: bringing to the farm lands the concept known in industry as vertical integration. Like other growers, he resented having to take his beets for milling to the nearby American Crystal Sugar Co. plant. One reason: the company's officers, then based in Denver, insisted on shutting down the mills on weekends, even during harvest time when beets must be ground up quickly before they rot. Recalls Pat: "We were at the mercy of people a thousand miles away who just were not concerned with our needs." So Benedict, as a director of the Red River Valley Sugarbeet Growers Association, organized 1,600 farmers to put up $20 million in cash, borrow another $47 million and buy out the company. Now they run the mills, sell sugar directly to industrial users and have access to a company computer that provides each farmer-investor with a detailed analysis of his beet fields for the past three years.

In 1975, Pat extended vertical integration to wheat. He was miffed because the operators of a country elevator refused to buy part of his crop when he judged the price to be right, but told him to wait several weeks while they worked out storage and transport snarls. Benedict got nine other growers together to put up $1.5 million, buy an elevator and incorporate it as Northern Grain Co.

While these investments have made him a genuine corporate executive, Benedict looks on them merely as extensions of his farm. Says he: "I just wanted to sell grain and beets exactly when it best suited my own operation. The market is so crazy these days that if you can't get access to the price you want the moment it is offered, you might as well give up. Eliminate uncertainties, that's the golden rule. You eliminate uncertainties in production through technology and very careful management. You eliminate uncertainties in price by controlling the marketing as much as you can. That leaves demand and the weather as the big question marks, and you don't worry about them unless you want stomach pains."

He does not get pains, but Benedict admits to some anxiety about taking over failed farms: "Any farm closing is traumatic. You worry that the fellow who sells out knows something you don't because he's shutting down and you're taking on debts to expand." But in his view expansion is the only way to make money: "Each acre produces so little profit that all you can do is go for bigger acres and make sure that each acre produces more crop." So, besides buying land, he has purchased so much machinery that it requires a football-field-sized yard just to park it. A partial inventory: four 15-ton trucks, three pickup trucks, seven tractors, three center-pivot irrigators and three wheat combines that cost $30,000 each, yet are used only about two weeks a year.

Benedict estimates that it costs $300 an acre to raise sugar beets. At an average yield of 15 tons an acre, and a depressed price this year of around $21 a ton, the typical beet grower will receive $315 an acre, producing a thin profit in view of the heavy investment required. But Benedict's mechanization and tight management enable him to grow 20 tons an acre, worth $420, enough to promise a worthwhile return.

In wheat, his size and