40 Chances

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by Howard G. Buffett


  And yet I consider myself first and foremost a farmer. I am never happier than when I’m sitting in a tractor or a combine during planting or harvest season.

  When I graduated from high school at age eighteen, I wasn’t ready to jump on the college track. I had excelled in high school. I got good grades. I starred on the debate team. I became a black belt in Taekwondo. But I started college with no real sense of what I wanted to do. I first attended a small, private college in South Dakota because two of my friends went there. One year was enough of that. I then decided that I wanted to go to Japan and learn a form of karate called Shotokan to complement my Taekwondo training, but the look on my dad’s face pretty much ended that plan.

  I was restless and curious, and then I heard about the World Campus Afloat run out of Chapman College in California. Now called Semester at Sea, the program offers students the chance to steam around the world on a cruise ship, taking classes but also visiting ports of call in countries such as Morocco, South Africa, India, and Taiwan. That experience affected me in many ways that would inform my later travels and interests, but when I got back, I still didn’t know what I wanted to do. I went to Chapman College itself for a while and then I came back home. I was not interested in learning finance or investing. Near as I can remember, what set me on my course in life was watching a guy in Omaha operate a big front loader doing construction work. I thought, “Now, that is something I would love to learn to do, and maybe somebody will pay me to do it. ”

  When my curiosity is engaged, I am a man possessed. I knew a businessman named Fred Hawkins, who owned a large construction company in Omaha. I called Mr. Hawkins and asked if I could come talk to him. He was a gruff, self-made man who had built an impressive company. I walked in, introduced myself, and said that I wanted to learn to operate bulldozers and other big equipment. He looked me square in the eye and said, “Kid, you were born with a silver spoon in your mouth. You wouldn’t last five minutes with my union guys. Get the hell out of my office.” The Buffett name got me in the door, and then it got me tossed right back out again.

  I don’t think he meant any offense. Over time, as the child of someone like my dad, you just get used to people reacting in pointed ways to the idea of who you are, rather than figuring out who you really are. I guess children of famous Wall Street financial executives and Hollywood actors can find plenty of company among other kids going through similar experiences, but being Warren Buffett’s son in Omaha—not so much. Omaha is full of great people, but it’s a place where you figure out what people think or expect of you. Sometimes it’s fair, and sometimes it’s not. A little needling is an irritation that pales compared to the struggles and challenges that billions of people on the planet contend with, but it can frustrate you when you’re young and would like to be considered on your own merits.

  I left Fred’s office with an “I’ll show you” chip on my shoulder. I went to see another construction guy I heard about from a friend. He was named Frank Tietz, and this time I said, “Look, I want to learn to drive a track loader.” He replied that he could not hire me because I did not have any experience. I asked, “How can I get any experience if no one will hire me?” That wasn’t his problem.

  “Okay, I’ll work for free for a month,” I suggested. After that, he could decide if it was worth it to pay me. I thought I had a surefire plan.

  “Nah, can’t do that,” Frank replied. “My guys wouldn’t like that.”

  “Why would they care?” I asked.

  “Well, they’ll see you working for free on jobs they would have made money doing. That won’t work.”

  I hadn’t thought of that, so I was frustrated leaving his place too. Then I called a friend of mine named Bill Roberts, who owned an excavating company. I asked him, “If I buy my own equipment, will you let me work on jobs you don’t want?”

  Bill said yes.

  My half-baked adventure gained speed: I scoured the paper and found a CAT 955K front-end track loader for $16,500. I thought that sounded cheap compared to other Caterpillars advertised. (It won’t surprise you that there was a reason for that!) I talked a bank into giving me a loan for $20,000, because I knew my dad would never loan me the money.

  Bill Roberts helped me out again by hauling the CAT to my first job site: a lot where a friend needed a basement dug. I figured that was a good place to start. Within a day, I was sitting in a hole in the ground with slanted walls and a ramp so steep, I was lucky I didn’t pitch the CAT over forward. I stopped working. I knew where Bill was digging a basement, and went and studied him for several hours. I then came back and, through trial and error, figured out how to get the walls straight. Thank goodness I was pretty good at getting the floor level.

  Bill was a true friend, passing on small jobs to me and hauling my CAT to the site on his trailer. Next, I figured that I wanted my own trailer so I could haul the CAT myself. I visited a guy named Harry Sorensen, who also operated heavy construction equipment and had drilled for oil in Texas. “Can you build me a trailer?” I asked him.

  “Yes. Can you give me a down payment of $3,500?” I had made some money by then, so I gave it to him.

  Six months later Bill was still hauling me around, and I kept going back to Harry, who would say, “Not done yet; come back in a couple of weeks.” Finally, I said, “Okay, Harry, I need my thirty-five hundred back.” He replied, “Well, I don’t have it.”

  “What do you mean you don’t have it?”

  “Well, I got something else for you that will help you out. I got this tractor you can sell, or you can use it yourself grading or doing other jobs.” It turned out to be a 1958 Minneapolis-Moline 5-Star tractor. Even I knew that it was not remotely worth $3,500, but what was I going to do? He had spent my money, and I was not going to get my trailer, so taking that tractor was the only way I could salvage anything. Bill just laughed when he learned I now had two pieces of equipment and still no trailer.

  I started using the tractor for a few jobs, and the transmission went out. I went to a distributor for the parts to fix it and found out they’d cost $3,500. Spending $7,000 on a tractor worth $1,500 tops was nuts.

  I started asking around and ended up meeting a genius at equipment repair named Otto Wenz. I told him, “I’ve got this tractor with a blown transmission, and I can’t spend a lot of money.” Well, he fixed it, and fast. He wouldn’t take any money, so I asked what I could do to help him. He said he needed some cornfields disked. Disking, or disk harrowing, means pulling a tool with concave blades on it that chops up the crop residue and the soil. Many farmers do it before planting to loosen up the clods of dirt and bury weeds. I’d never done any farming, but I was grateful to Otto, so I showed up on his farm. His son Wayne was there, and we hooked up a disk to his old John Deere 6030 tractor. I was out in the sun driving that big tractor, and I was enjoying learning from Wayne about all the different steps of farming. Best of all, I was not in a hole in the ground trying to make dirt walls straight. It hit me: “This is more fun than digging basements.”

  In 1976, I bought a trailer I could pull behind my dump truck to haul my CAT as I expanded my business. Photo: Unknown source

  Farming took hold of me. Later that week, I was the last one in the fields, and it was getting dark. Otto’s old tractor had no cab and crummy lights. We’d been working on some land with terraces. When I finished the one I was doing, it was dark, but I thought, “Okay, just one left, and I’ve got time; I might as well finish that one too.” I was about five minutes into working on it when I saw a pickup truck speeding at me with its headlights flashing madly. I stopped, and Wayne jumped out and ran over. “Stop! You’re disking a field where my dad’s already planted corn! I’ll go grab the planter and replant, and maybe he won’t figure it out.”

  It’s funny how often the path to where you need to be in life can be littered with foul-ups, setbacks, and mistakes, but anything worth doing or learning involves those elements. Otto, Harry, Wayne, a farmer named Francis Kleinschmit
, and another group of guys I would meet a few years later all stand out as characters who one way or another nudged me down the road to becoming a real farmer. If Harry had built me that trailer, I might have become the bulldozer king of Omaha and never gone near farming. If the tractor hadn’t broken down, I wouldn’t have met Otto or had a patient guy like Francis to show me the fundamentals.

  In talking to people all around the world, it is striking how many successful people admit that they just jumped right into whatever they decided to do. They never let fear of making a mistake paralyze them. They even may have tried several careers before they landed in the one best suited to them. To make the most of your forty chances, from time to time you’ve got to do things you don’t necessarily know how to do, make some mistakes, call an audible, and try again. It’s a simple concept, but so many people are afraid of change. (Farmers, in fact, tend to be among the folks most resistant to change.) When you feel yourself drawn to do or try something, don’t overthink it.

  After this introduction to farming, I moved away from Omaha for a few years, but I thought about these experiences a lot. By the time I moved back, in 1982, I had a wife and four stepdaughters to support, and the first thing I did was find some land to rent so that I could farm it. I am never so happy as when I’m on a farm, and I’ve talked to thousands of farmers on every continent except Antarctica.

  When HWB was very young, he would come in the cab with me with a pillow. I’d put the soundtrack of his favorite Disney movie on the tape player, and we’d spend hours together. I’d let him steer, and I’d point out to him animals or features about the fields. Today he is farming the Omaha acreage my dad still owns. HWB doesn’t love the big motors and the dirt as much as I do, but he is a whiz with the onboard computers and GPS systems that increasingly enable most large-scale farming today. He’s got the high-tech gear so dialed in that he once, while on a flight from Washington to Omaha, sent me an email saying that he had just turned on his irrigation pivots from thirty-five thousand feet using his BlackBerry and the plane’s onboard Wi-Fi! I was the kid in the sandbox with the trucks; HWB was that kid you count on to reprogram the VCR after a power outage.

  FARMERS ARE MORE DIVERSE THAN THEY MAY APPEAR

  Obviously, my personal path to farming was not typical. My son enjoys it for different reasons than I do. But I’m not sure that most people in the United States—or even in governments and organizations trying to set agricultural policy or work on global hunger issues—understand just how diverse the farming experience is for hundreds of millions of farmers around the world. I have rarely seen a farmer who is a great economist, an outstanding academic, or a successful politician, but the inverse is also true—not that it seems to stop some of those folks from popping off about agricultural production in a particular geographic area or circumstance, often without a clue about what it means to farm there or how farmers think.

  American farmers are unique in the world for several reasons. They have access to vast, flat regions of our country with good soils within what I call the “fertility belt,” or the region in the Northern Hemisphere between the 30th and 45th parallels. That region comprises most of the lower forty-eight states, and it holds the most temperate climate, the best soils, and the most productive agricultural lands in the world.I But we are blessed not just geographically. US agriculture also benefits from incredibly solid infrastructure, waterways, and access to vast information resources and research data.

  As a country, we began investing in our agricultural infrastructure in the 1700s, when 90 percent of the population depended on agriculture to make a living. Our early presidents, including George Washington, were farmers, always interested in improving their yields and supportive of farmers’ concerns. Early on, the US established a land tenure system that connected individual farmers to their land in a reliable and stable way, inspiring them to invest and develop it, allowing them to use their land to obtain credit. The US Department of Agriculture (USDA) was established in 1862, the same year that the Morrill Act created land-grant agricultural colleges. By the 1960s, decades of investment by the government in these programs—plus wide-scale research and other key infrastructure elements such as rural electricity, roads, and railroads—created the conditions that propelled an almost tripling of productivity over the next four decades.1

  Ongoing research and technology development now allow farmers to produce on a scale unimaginable even a few decades ago. Satellites steer tractors, and combines and fertilizer applicators can vary the amount released in one-square-foot patches based on taking an automatic assessment in real time of what the plants within that square foot require. In 1926 every American farmer was feeding 26 people; today every US farmer feeds 155.2

  These farmers have the expertise and resources to use the most sophisticated and complex technologies and inputs—and we must support that. The food ecosystem is complex and multifaceted; a disappointing US corn crop one year may exacerbate starvation globally by driving up worldwide corn prices, while surpluses another year might enable us to quickly and efficiently ship lifesaving aid after an earthquake. As the world’s population grows, so must our productivity. US farmers already produce about one-fifth of the world’s grain for consumption. What is not so clearly understood is that when the United States maximizes the productivity of its farm acreage, it saves fragile ecosystems elsewhere.

  Even in my hometown of Decatur, a Midwestern city surrounded by lush farmland, people don’t realize how much farming here has changed in the last thirty years. We have hundreds of thousands of acres of corn and soybeans, yet I still meet people around here who think of farming as a little-red-barn enterprise. Several decades ago, the area had lots of medium-sized farms of maybe a few hundred acres, each employing a farmer, his family, and maybe a few others. Now these parcels are thousands of acres in size, but they are farmed by fewer and fewer owners, who employ a handful of workers and rely on larger and more sophisticated machines. Drive by agricultural land, and you’ll see tall poles holding GPS receivers. Those enable farmers to operate their equipment hands free, their coordinates beaming to and from space. They may pick up some extra hands at planting or harvest, but the level of automation and mechanization is significant.

  That’s one extreme in the United States. At the other end of the spectrum are the growing ranks of small-production organic farmers who are using various lower-impact, green techniques and fueling the organic and “buy local” movements. There is a lot of important research and technology developed in that area. I’m all for it. I believe we need diversity in every sector, at every scale. One of the most impressive demonstration farms I’ve seen is the Rodale Institute in Pennsylvania, where for decades scientists have been testing and developing higher-yield organic methods that protect and enhance soil quality.

  I am a relentless advocate of better soil management, and we’ll get into more detail about that later. I will speak a sometimes unpopular opinion, however: with hunger afflicting nearly a billion people every single day, I do not believe we can feed the world with organic farming. The overall challenge is too big and the conditions in the areas hardest hit are too extreme to rely solely on these methods, which require considerable training, restricted use of fertilizer and seed, and intense management. I agree with the sentiment that attention to soil quality everywhere is essential—from the largest US commercial corn farms to the smallest patch of land around a poor farmer in Guatemala or Ghana. That effort involves the use of cover crops, crop rotations, and reduced tillage techniques that I do believe can be implemented by any size farmer almost anywhere. But in the end, improving food security for almost one billion people will require the use of the best practices at many different scales, tuned to local conditions, to achieve success.

  THE PYRAMID OF SMALLHOLDER FARMERS

  When it comes to global hunger, every farmer has a role to play. The commercial farmer’s role is different from a smallholder’s role, obviously, but the worldwide food ecosystem n
eeds good, smart actors at every level, in every region. The farmers I am most focused on are ones I feel have been misunderstood and underserved by a lot of well-intentioned efforts to address global hunger: subsistence farmers.

  In 2008 I met a woman in southern Ethiopia, a country racked by drought and famine.3 Her name was Adanech Seifa. As always, I carried my camera, and the photograph I took of her sitting on the ground with her twelve-year-old son, Negese, at the Misrak Badawacho distribution site remains a haunting reminder of the people we must figure out how to help in a long-term, sustainable way. In the photograph I took, her eyes are hollow and tortured. Her son’s chest is concave. Narrow ridges of skin hang off his ribs. His legs are so thin that his knees look like oversized knobs.

  Adanech told me she had 1.25 acres that had not produced enough to feed the eleven members of her family for two seasons. She was there to try to get food assistance. She once had chickens, but they died from disease and probably the drought. She had no way to store her crops, and, when I met her, she had already sold her last goat and sheep to buy food. But due to the ongoing drought there, local food prices were high, so that food was gone too.

  I knew food aid could get her through the next week, maybe the next month. Food aid is essential to keep people alive in extreme circumstances like these. But everyone knows that food aid is not a long-term solution. The question is, how do we create long-term solutions? How can we help farmers like Adanech create a sustainable food source and income?

  I felt unsettled when I photographed Adanech and her son. As she spoke and I photographed, I realized her child was dying. Photo: Howard G. Buffett

  There are hundreds of millions of people like Adanech on the African continent and elsewhere in the world who do not have an even remotely funny or unlikely story about how they “chose farming.” Those farmers, perhaps half a billion according to the FAO, provide 80 percent of the food consumed in the developing world using rain-fed systems. They couldn’t possibly relate to the nostalgia of the little red barn. Most will never drive a tractor or a combine, and they don’t think of themselves in romantic or noble terms as stewards of the earth. They barely grow enough food to survive, and a drought or infestation of pests or a virus can mean the death of one or more of their children. They farm in conditions inhospitable and extreme, with the most rudimentary of tools and inferior seeds. They have no other option.

 

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