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Hedging his bets on global ag
Jeffrey Rechkemmer, 59, has a penchant for plain talk and cigars. Born in Oelwein, Iowa, he grew up in Texas. Today, he directs farm operations at FarmGate in Ukraine’s uber-fertile corn belt.
Rechkemmer made his first visit to Ukraine in 1994, while working as a John Deere service consultant. A growing interest in Ukraine kept him returning for more. In 2003, he started farming with 1,000 hectares (2,500 acres), backed by investments made by five American farmers.
Today, FarmGate is a multinational owned by investors from the Netherlands, Ukraine, and the U.S. Located in the Khmelnytkyi Oblast region of Ukraine, its rich Chernozem (literally, black earth) soil is precious – and productive.
“Most of the investment money is from Holland, but I’d say 15% comes in from Ukraine and America,” Rechkemmer says. The executive office is based in Kiev, Ukraine’s capital.
He oversees 17,500 acres of corn, soybeans, winter wheat, barley, molting barley, and rapeseed (used for fuel or canola oil, depending upon its purity). FarmGate is in the process of acquiring another 15,000 acres.
“We’re a small agri-holding,” Rechkemmer says. “There are probably 20 groups around us farming 250,000 acres, as well as around 200 with 50,000 acres.
“Our area has gone from wheat and sunflowers to corn and beans in the last five years because there’s more profit,” he adds. “Corn and bean acres are exploding.”
U. S. equipment drives production
Equipment is run 24 hours a day, seven days a week, from July 1 through December 15.
“It stays in the field, and workers guard it due to rampant theft,” he says. FarmGate favors John Deere products because of the service level, but it recently purchased a Horsch planter.
FarmGate has a Sukup dryer. “We’ve got a double-capacity dryer, so we’ve stacked two together,” Rechkemmer says. “We can dry 400 metric tons, or 14,000 to 15,000 bushels a day.”
Natural resources are plentiful. “We get about 30 inches of rain a year. That’s better than Russia, but Russia has great soil,” he says. “We’ve got the rain, the soil, now we’ve got the management. You can’t buy artistry. Farming is artistry – knowing what to do. They’re a bit short of it in Ukraine.”
Rechkemmer follows global issues closely. He thinks the EU will make GMO concessions during the USA-EU free-trade agreement talks. Known as the Transatlantic Trade and Investment Partnership, it accounts for one third of global trade.
“There are some GMOs in Ukrainian soybeans,” he says. “GMOs are not illegal here. You have to report it, produce samples, and tell buyers. Our company doesn’t grow GMOs.”
Rechkemmer is candid about growing global competition. “If U.S. farmers are going to be top exporters in the world, they’ll have to continue to be the low-cost producers, and that will be hard,” he says. “I can make money on $4 corn; Americans can’t. It’s a problem.”
However, he says Ukraine has its challenges. “When I buy gas in Ukraine, 12¢ a liter goes to road tax,” he says. “The country has improved the roads since I’ve been here, but it has a long way to go.”
Ukraine also is shackled by its land-ownership system. “It’s an opportunity for people like me,” he says. “For those with 2 or 3 acres or for small villagers given land, they’re not allowed to sell land shares. I’m required to rent it from them for about 1 ton of wheat. The federal government must figure it out.”
Known as a mentor to area farmers, Rechkemmer isn’t slowing down. “I plan on being in Ukraine for four or five years,” he says. “I’m buying land in Texas as an investment now.”