Business Profile: Strong roots on the Palouse

Art Schultheis’ old-school upbringing with six siblings near Colton developed his affinity for farming.

The children and their parents lived on a farm that the family homesteaded in 1874. The family’s lifestyle, Schultheis said in an email, was structured and frugal.

“Breakfast was required attendance at 6:30 a.m. every day and you had to have your chores done before eating,” he said. “With nine people around the table, it was usually chaos. A gallon of milk and a loaf of bread was needed at every meal. Hamburger was packaged in five-pound packages.”

The family had an abundance of homegrown food prepared by his mom who was a “great cook,” Schultheis said.

The family’s discipline paid big dividends.

“Our parents somehow found a way to put all of us through college,” he said.

Schultheis earned an associate degree in agriculture from Walla Walla Community College. That education, paired with what he learned on the farm as well as through constant research about innovations in agriculture, has enabled Schultheis to earn a stable income from raising crops in an era when farms are getting larger and larger.

The Washington Grain Commission recently appointed Schultheis to represent Barley District 6. His district includes Whitman, Asotin, Garfield, Benton, Columbia, Klickitat, Walla Walla and Yakima counties.

I communicated with Schultheis by email because he spent the first part of this month in Washington, D.C. The edited highlights of our conversation are as follows:

Elaine Williams: Let’s get right to something newsy. The four lower Snake River dams have been in the news lately. What impact would breaching the four lower Snake River dams have on your farm?

Art Schultheis: About 85% of the wheat raised on the Palouse is transported to export markets on the coast via the river barge system. The thought of them being removed is just senseless. The road-and-rail infrastructure we have now are in no way capable of replacing the river barge system. It costs us almost $1 per bushel to transport our wheat from our farm to Portland, Ore., using trucks to the river and the barge to Portland. I have not done the math, but losing the river barge system would have to be close to double the cost of what we have now.

EW: Let’s switch gears and talk about your farm. How did you decide to be part of your family’s farm?

AS: I did not want to work inside all day. I enjoyed working with my hands and watching crops grow. Our farm was not very big. I was lucky enough to be the one to keep up the family tradition. When I finished college, Dad was looking for more help. My three older brothers already had established careers. I worked several off-the-farm jobs, helping Dad the first five years after I came home to supplement our income.

EW: What is your role in the farm?

AS: We are in a transition/succession phase on our farm. My son, Kyle, is taking on more of a role all the time. My role at this point is to mentor the next generation into the management role. My dad passed away six years ago. He was our main parts runner. I have taken over that job, usually going to town a couple days a week for parts.

I am usually in my home office at 4 a.m., starting the day reading the Lewiston Tribune on my computer. I do all the financial record keeping and bill paying. I also file the required U.S. Department of Agriculture paperwork for farm programs and crop insurance policies.

During the winter I go to the farm shop at about 8 a.m. During spring and summer, it’s between 6:30 a.m. and 7 a.m. Kyle and I start the day with a meeting, usually 10 to 15 minutes, sometimes longer. We go over the expectations for the day and any marketing plans we might have. This time of year, we are working on equipment in the shop and shipping grain. Right now, we have a combine and a truck that we are working on. I run into town a couple days a week to get parts.

We have one full-time employee, Chris, who is our main truck driver. When he isn’t hauling grain or fertilizer, he works in the shop with us. Once spring hits, I do 95% of the spraying and Kyle does 95% of the seeding. Chris hauls fertilizer and seed to keep our tractors moving. During harvest, I am the combine operator, and Kyle oversees the harvest crew, trucking logistics and binning of the crops. We harvest with our neighbor to be more efficient with our shared labor and equipment. We home store and identity preserve about 80% of our crops in our 13 grain bins.

EW: What role do other family members play in your farm?

AS: When we first started out farming, Sue was a stay-at-home mom and drove combine and truck until Kyle got older. Then she started school bus driving for the school district, which she still does. Kyle came back home to farm in 2018 after teaching high school math for eight years. He brought some great skills in managing employees and the use of spreadsheets for analysis. He oversees the repairs to equipment in the shop and planting planning. He has found some niche markets to replace some of our lost Shepherd’s Grain sales. His wife, Stacie, teaches remotely from home, so she is available in the afternoons for parts running and flagging machinery moves. Their children, Bria and Colin, are just getting to the age where they are starting to help around the farm. My two oldest brothers are retired. Each of them return to the farm for about 10 days at different times during harvest to run truck or bankout wagon.

EW: What’s your highest volume crop?

AS: Wheat, mostly soft white winter, but we also raise some hard, red winter wheat and soft, white spring wheat as well as dark, northern spring wheat and hard white spring wheat when market conditions are right. We also raise malt and food barley, lentils, peas, garbanzo beans, oats, canola and Kentucky bluegrass seed in our crop rotation.

EW: How large is your farm?

AS: It’s 1,150 acres, family owned through several different entities. We also have 950 acres rented from four landlords.

EW: What is a successful innovation that you have introduced on the farm?

AS: The introduction of technology to our spraying, fertilizer and seeding systems has been a game changer. We started years ago with basic flowmeters to adjust spray rates based on our ground speed. Now we are using GPS technology for auto-steer and individual nozzle control that gets our overlap down to 1% to 2%. Twenty years ago, we had 15% to 20% overruns. We are now also using satellite images to map the different yield zones of our fields with prescription maps that change the rate of fertilizers applied based on yield goals in each zone as we travel across the fields.

EW: You use a direct seed system. What’s the significance of that?

AS: Direct seeding is a one-pass operation that fertilizes and plants the crop at the same time into the residue of the previous crop. It helps hold the soil in place. Conventional tillage destroys the soil structure and reduces the amount of residue available, leaving bare soil that can easily erode during heavy rain events. We cannot allow precious topsoil to erode down the rivers to the ocean.

My late dad was a conservationist. Like the family now, he strove to leave our land in better shape than when we started farming it. My dad always farmed on the contour on our hills, but did conventional tillage during much of his career. This required several tillage passes before ever seeding the crop.

He direct-seeded his first field in 1977. It has been a slow process of learning. We only get one shot per year to learn what works and the weather doesn’t always cooperate. Dad bought his first no-till drill in 1980. It was a Comfort King that was only 12-feet wide. We started on small acreages. As we learned what worked, we expanded to more acres. I purchased a John Deere 750 drill in the early 1990s and used it until we built our latest drill, an AgPro in 2013. We still had to do some limited tillage with the John Deere drill to make it through our high residue levels. With the AgPro drill equipped with hoe openers, we can eliminate almost any other tillage.

EW: You’re an owner/producer in Shepherd’s Grain, which describes itself as a 100% farmer-owned company that procures wheat from third-party certified sustainable farmers. What impact does being a part of Shepherd’s Grain have on your farm?

AS: The wheat we raise for Shepherd’s Grain is stored separately and its identity is maintained throughout the shipping, milling and packaging process. When a customer buys a bag of Shepherd’s Grain flour, there is a code on the bag that they can go to our website and find out which farmer provided the wheat that was milled in that bag. Some bakeries and restaurants will highlight a grower’s profile when they know where their flour comes from. All growers for Shepherd’s Grain must use a direct-seed system and are third-party certified by the Food Alliance and/or Salmon-Safe organizations.

EW: How does Shepherd’s Grain benefit your farm?

AS: Our Shepherd’s Grain pricing model is based on the cost of production with a profit added. The company sets the price once a year, giving a stable price to our buyers and ensuring a profit for our growers. We have a spreadsheet we compiled in conjunction with Washington State University economists that every producer fills out to establish our cost of production. The wheat we sell through Shepherd’s Grain is always above the cost of production.

EW: What percentage of your crop goes to Shepherd’s Grain?

AS: Five years ago, 60% to 65% of the wheat we raised was shipped and sold through Shepherd’s Grain. That all changed in August 2022. The Grain Craft flour mill in Pendleton, Ore., burned to the ground. This is where all our Shepherd’s Grain wheat was milled. Grain Craft switched our Shepherd’s Grain milling to its facility in Blackfoot, Idaho, and has decided not to rebuild the flour mill in Pendleton. Instead of transporting our grain three hours to Pendleton, we have to go nine hours to Blackfoot. That isn’t sustainable at today’s freight costs. We have less than 5% of our production going to Shepherd’s Grain. We are exploring other options to hopefully regain some production here in the Palouse region. The loss of the Shepherd’s Grain market has drastically changed the way we market our wheat.

EW: What other concerns do you have moving forward?

AS: Our machinery costs continue to increase. Machinery manufacturers do not make equipment for our size farm anymore. They cater to the large operations that need more productivity with less labor. The costs of new machinery do not pencil on a 2,000-acre farm. A new combine is approaching $1 million. We are running 20- to 25-year-old tractors with about 10,000 hours on them. Our plan to update them will be to look for 10-year-old tractors with half of that in hours. Repair costs of our older equipment have also increased as parts prices have more than doubled in the past five years. With crop prices where they are, something is going to have to change to make this sustainable. We will either expand our acres to spread out the costs or partner with a neighbor or an out-of-the-area farmer in sharing ownership of the larger equipment.

EW: What is your plan for your farm moving into the future?

AS: We are halfway through our succession plan to pass the farm to our sixth generation son, Kyle. He and his wife, Stacie, now own 30% of Diamond-S Farms Inc., our farm operating entity. Each year, they will acquire more shares. When I retire on Feb. 1, 2030, they will fully own Diamond-S Farms Inc. Sue and I will still be landlords through several limited liability companies that own land that is leased to Diamond-S Farms Inc. Crop production will continue to be successful. When I started farming, our 10-year farm yield average was 72 bushels per acre for winter wheat. Our 10-year average now is just over 100 bushels per acre. I think our next frontier will be the use of biological stimulants that make our fertilizers more efficient, resulting in higher yields with less nitrogen use. Crop breeding advances will make more bushels on less water. Kyle is exploring other opportunities to generate revenue for the farm.

Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.

Art Schultheis

Owner/Operator – Diamond-S Farms, Inc.

Age: 62

Education: Graduated from Colton High School, 1980; associate degree in agriculture mechanics from Walla Walla Community College, 1982; attended Spokane Community College in 1983.

Career: Returned to the farm in the spring of 1983. Worked for his parents, Carroll and Edna Mae Schultheis until 1987. Farmed in partnership with his parents 1987-94 under Four-S Farms until his dad retired. Farmed one year as a sole proprietor, then formed Diamond-S Farms Inc. in 1996. He is a fifth-generation farmer on land homesteaded in 1874 by his great-great-grandfather.

Family: Married to Sue Schultheis since November 1984. They have one son, Kyle, 37, who is married to Stacie. Kyle and Stacie live on the farm with their children, Bria, 11, and Colin, 9. Their daughter, Kelsey, 35, is married to Kevin Oswalt. The Oswalts live in Durham, N.C., with their children, Max, 5 and Tony, 1½.

Civic involvement: Member of St. Gall Catholic Church and Colton Knights of Columbus; first responder for Whitman County Fire District No. 14; District 6, barley representative to Washington Grain Commission. Bookkeeper for St. Gall and St. Boniface Catholic parishes. Former board of directors member for Shepherd’s Grain, Uniontown Cooperative Association, Washington-Idaho Pulse Growers Association and Washington Turfgrass Seed Commission.