The Wall Street Journals Agriculture Department is Officially Ass Backwards.
By Jim Mundorf
One of the first articles that caught my eye after starting this website was by Jason Bunge of the Wall Street Journal. I wrote about it here Wall Street Journal Paints a Narrative, Misses the Real Story. The article focused on a farmer in Kansas, Lon Frahm. Lon was successful and from the details in the article, seemed to do everything the right way. A lot of the land he owned had been in the family for a long time. He helps fund the local community college and hospital. From the article it seemed that Mr. Frahm ran a very tight ship. An accomplished businessman constantly analyzing every move and detail of his operation. But for some reason, the article seemed to blame Mr. Frahm for expanding his farm. They used words like, “gobbling,” and “swallowing” to describe the way Mr. Frahm bought land. Then after reading a more recent article I went back and reread the story about Lon Frahm and I realized the article didn't really say those things the headline did.
The article that made me realize this is written by Jesse Newman and is titled Two Brothers, Tied to the land, Face Wrath of America's Farm Bust. Its another riveting tale about a farmer. The difference is this guy seemed to do everything the wrong way. It tells the story of Ron McMartin Jr. of St. Thomas North Dakota. It is a of a story of colossal stupidity.
I lost count of the times I shook my head and said, “WHAT?” while reading this article. It tells of Ron and his brother Larry and their typical upbringing on a North Dakota farm. They both become farmers. Larry goes broke in the 90's and around the same time Ron decides to be a big wheel and rent 10,000 acres. “You’ve got nothing to lose and everything to gain,” Ron recalls thinking.’ WHAT? Ron's brother just went broke and he remembers thinking that, "he has nothing to lose?" In the world of farming, or the world of business, or any world you find yourself in, it is my opinion that if you operate as if you have nothing to lose, it’s no longer a question of if you’ll go broke, it’s simply a matter of when.
So the boom in grain prices came and Ron kept the pedal to the metal and his farm, the McM, was soon farming 50,000 acres. There was just one small problem, “All but about 160 acres of McM’s land was rented, and his credit needs grew to $25 million or more.” WHAT? How does that happen? How does a farmer with land that can’t be valued much over $1.5 million (that’s being generous) end up with a credit line of $25 million? Apparently there was no need to worry though, because as Ron’s operating costs went up, “Ron was reassured somewhat when over the next two years BMO Harris increased his line of credit to $36 million and raised the amount he used to hedge crop prices to $4 million.” WHAT? Ron describes his feeling of having his credit increased with one of the dumbest statements I have ever read, “That’s the highest high you can ever get.” WHAT? That’s right being 40 million dollars in debt is the, “highest high you can ever get” says the man who thinks he’s, “got nothing to lose and everything to gain.”
Then crop prices did what they do. They went down, and Ron quickly realized he had a lot to lose. Once again the geniuses at his bank had some solid advice for him, “By the summer of 2016, funds for day-to-day operations were gone. BMO told Ron to hire a consultant to help stem losses or they wouldn’t keep funding the farm.” WHAT? I can hear the phone call now, “Hey Ron, we heard you’re broke, time to go out and hire a consultant to help you with that. We know you can afford it. We just gave you 40 million dollars.” If I had an account at BMO, I’m not sure what I would do after reading this. I would either go in there and withdraw all my money to get it out of their hands, or I would go ask them for a 25 million dollar loan and head for the casino.
Well Ron went bankrupt and owes creditors 64 million dollars. He has borrowed money from his parents to live off of, but don’t worry because, “As often as he can, he escapes to his lake house in Minnesota.” WHAT? Yeah, that little nugget of info, like all the other confounding information in the article is never really explained.
Both of these articles are good reads full of valuable information. Great examples of how a farm should operate and how it shouldn’t operate. The problem is you have to read between the lines to get that figured out and the McMartin article almost raises just as many questions as it answers. After studying over both articles I realized what causes this problem, it’s the headlines. The headlines set the tone for the articles. The first headline,
Supersized Family Farms Are Gobbling Up American Agriculture, U.S. growers are swallowing up acreage to survive a harsh agricultural downturn, squeezing smaller operations and transforming America’s rural economy.
Before you even start reading you’d think family farmers are going around putting the squeeze on their neighbors. If you read the article with a critical eye you can see that, that is not the case.
The second articles headline
Two Brothers, Tied to the Land, Face Wrath of America’s Farm Bust, Ron McMartin wanted to be a farm magnate while his brother, Larry, just wanted to be a farmer.
Poor old Ron McMartin just another victim of the, “Farm Bust.” Again if you read the article looking for the truth, you’ll quickly realize that Ron was an idiot. From his quotes it seems obvious he would’ve went broke no matter what line of business he was in. The reason he didn’t go broke sooner was because he had another idiot at the bank that was shoveling money at him.
So why use misleading headlines? Truth is most writers don’t write headlines, editors do. So after the writer spends countless hours studying, interviewing and editing, they hand the article off to the copy editor who comes up with the most sensationalized headline they can think of in order to get people to click on it. They used to say that they had to do this so that the article would fit on the page right, but now I'm pretty sure its done to make sure its as click-baity as it can be. The problem is that the headline is the first impression. It totally influences the way you read the article, and it jacks up the stories that these writers are trying to tell. But editors don’t care they aren’t selling the truth, they are selling clicks. Those greedy bastards! It must work for them cause they all do it. I don’t know, maybe someday I’ll try it too ;)
Update: After posting this on Twitter someone told me to Google Ron McMartin lake house. What I found gave me a whole new perspective on the WSJ and this story. Here it is: UPDATE: HAND UP- I WAS WRONG ABOUT THE WALL STREET JOURNAL (THEY ARE LIARS