Wall Street Executive Invests in Iowa Farmland

Photo: Bill Dunn and Joanne Kennedy

After 30 years with The Wall Street Journal, William Dunn knew about investments. However, his colleagues were more comfortable with stocks and bonds or commercial real estate. It actually took a conversation over a pork chop dinner back in his home state to start Dunn’s investment in Iowa farmland. 

Shortly after Dunn retired as executive vice president of The Wall Street Journal, then Iowa governor Terry Branstad organized a “Hawkeye Weekend”, encouraging ex-Iowans to come back to their home state and invest in Iowa. At that dinner, Dunn, who grew up on a farm near Dexter, Iowa, was conversing with a retired Cedar Rapids bank president who talked about investing in Iowa farmland and said if Dunn was interested, he should give Hertz Farm Management a call.

The timing could not have been better. Dunn called Loyd Brown at Hertz and bought his first farm in 1986 - 396 acres for $1,100 per acre.

Over the years, through multiple purchases and some exchanges, Dunn now owns five farms totaling 1,200 acres in central Iowa, producing corn, seed corn and soybeans. Bill Holstine was assigned to be his farm manager and has been until recently. Today Joel Waskow, from the Nevada office of Hertz, manages Dunn’s farms.

Improving the Farm

Acting on recommendations from Holstine, Dunn has been very active in improving his farms. He installed tile on all his farms and believes in ongoing improvements to maximize the productivity of the farms. In fact, one substantial result of tiling allowed Dunn to secure a seed corn contract which greatly improves his financial return. “Drainage tile has  been the single most beneficial  investment we’ve made on our  farms,” said Dunn.

They have also removed some old buildings, taken out some fences, added 10 to 15 acres of filter strips, and shaped waterways. Leaving the farm better than when he found it is important to Dunn. “Hertz has helped all of our farms go from ‘good’ to ‘excellent,’” Dunn noted.

They’ve also added grain bins, bringing flexibility to their grain marketing and opening up additional marketing opportunities.

More than Technical Knowledge

Besides Hertz Farm Management’s  technical knowledge on improving  soils, Dunn has appreciated their  ability to negotiate and work with  the other farm owners in a drainage district. There was some resistance to how Dunn’s tiled fields were going to drain and Hertz worked with the neighboring farm owners to find alternatives to help the water flow from the property. “I really appreciated Hertz taking care of all the details and negotiations with the adjacent farm owners,” said Dunn.

The former newspaper executive also appreciates Hertz’s relationship with local farm operators. “We’ve kept the same operators on all farms. I believe it is very important to keep those relationships,” Dunn said. “I’ve trusted Hertz to negotiate leases with the farm operators over the years.” Dunn’s return has evolved into more risk/reward farm operating arrangements.

Photo: Kevin Gerlach, farm custom operator, Joel Waskow, Hertz manager, Bill Dunn and Joanne Kennedy discuss the progress of their seed corn crop.

In another investment opportunity, Dunn’s farm manager made him aware of the Lincolnway Energy ethanol plant that was built in Nevada, Iowa in 2006. Dunn was an early investor in that project. “I do have some ethanol market concerns right now, especially if the policy makers in Washington decide to remove the renewable fuels mandate,” Dunn said. But he thinks that even if that happened, it would only be a short-term hit to the market. He doesn’t believe in market “bubbles” that don’t recover.

Legacy for the Grandchildren

Dunn has strong ties to Iowa and  farming. In 8th grade, he moved with his family to Dexter onto an 80-acre farm his stepfather inherited from his parents, where he lived until he finished school. And while his four children in their 40s and 50s have no farm or close Iowa connections, Dunn isn’t overly concerned about their having a more direct link to his roots in middle America and the values he cherishes. He is more mindful of the legacy he can pass on to his four grandchildren.

He is planning on leaving them the farms, with the hope they will grow to appreciate the land. “I want them to have roots in America and appreciate the values of growing up on the farm,” noted Dunn. He has set up a trust for his grandchildren to own the land with Hertz continuing to manage the farms. “Even today, the people at Hertz carry on the traditional company values that founder Carl Hertz started – stewardship, trusted advisors and Midwestern values,” Dunn said.

Coming Home

Dunn comes back every year to tour his farms. Ever the smart businessman, Dunn’s primary motive for owning farmland is for its return on investment. But, his investment in farmland is also driven by his ties to the land from those early years of growing up on the farm. “Returning to Iowa always feels like home, even after 50 years,” Dunn stated.

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