EconSouth (Third Quarter 2007)

Q & A

'It's Got Everybody Nervous'

An Interview With Lester Killebrew, Chairman of SunSouth LLC

Photo of Lester Killebrew
LESTER KILLEBREW
Title Chairman
Organization SunSouth LLC
Function SunSouth LLC owns and operates 14 John Deere dealerships across the Southeast.
Web Site http://jddealer.deere.com/sunsouth/
Other In 1983 Killebrew acquired a ValCom franchise, one of the region's oldest and largest computer dealerships. His firm is one of the region's largest installers of computer networks, and in 2002 ValCom Wireless began distribution of wireless telecommunication equipment.

Lester Killebrew has been involved in agriculture for four decades as a farmer, retailer, and business executive. After graduating from Auburn University, he established Henry Farm Center Inc., a full-service John Deere dealership, in 1969, in Abbeville, Ala. Since then, the business has grown. Through SunSouth LLC, Killebrew owns 14 John Deere dealerships across the Southeast while also operating other, nonagricultural business interests. Killebrew also serves on the Sixth Federal Reserve District's Small Business, Agriculture, and Labor Advisory Council.

EconSouth: How does the drought of 2007 compare with the other droughts in your four decades of experience?

Lester Killebrew: We have finally started getting a little rain, but up until mid-July it was the toughest I've ever seen. I have heard a lot of the old-timers talk about 1953 or 1954 being the worst other than this one. The corn crop is just a total disaster. A lot of people had started planting more corn because the price was better. Now they're going to lose a lot of money because the costs of the inputs have gone up so much. The cost of fertilizer and nitrogen is just out of sight. The cotton crop does not look good either. I don't know what percent loss we'll see; it's hard to tell at this point. But a lot of our cotton, peanuts, and, of course, corn was just plowed up because it rained very little.

ES: What effect does this drought have on your farm equipment customer base?

Killebrew: We're going to lose more of our farmers because of it. So many of them were just holding on as it was. This drought has been going for several years. And the cost of farmers' inputs has just gone really high while the price they're getting for their crops has not increased overall. We've seen increases in the price for corn. Of course, we weren't able to grow any corn. They're getting much less for peanuts than they did before this last farm bill. Cotton's price has not increased either.

ES: What about the effect on the local economy?

Killebrew: The drought is felt throughout the towns and communities in Alabama too. We use five as a multiplier effect. Money generated by agriculture turns five times through the economies of all these small towns and communities.

ES: Could irrigation have mitigated the effects of this drought?

Killebrew: California grows most of the fruits and vegetables that you find in this country. There would not be a plant grown in California without irrigation because it doesn't have the rainfall you need to grow a crop. Farmers in this area have not spent the money and put the things in place to enable them to irrigate here in the South. We could be the breadbasket for the country as far as vegetables if we had irrigation. But we don't have that much irrigation in Alabama or northwest Florida. We do have more in south Georgia.

photo of corn field
With the absence of extensive irrigation on Southeastern farms, this summer's drought has hit the region's agricultural industry particularly hard.

ES: Why don't we see more irrigation in the region?

Killebrew: You see a lot of irrigation in south Georgia because of the aquifer there. You can drill down about 100 feet and have all the water in the world. Of course, they're beginning to regulate it because of the usage. But in Alabama you've got to drill about 800 feet, and the cost is just unreal. Also, you really have to plan ahead to put in a large irrigation system. These systems cover a lot of acres. You can't just go in there and install one like you can in a home. You have to drill wells or lay pipe in the ground.

ES: Should there be a more aggressive pursuit of irrigation?

Killebrew: If we're going to continue farming in Alabama, we've got to have irrigation. To help farmers build holding ponds for irrigation, Congressman Terry Everett [R-Ala.] has gotten legislation into the farm bill, HR 2419, that the House passed. These ponds would fill up when we have rainfall. Or you could drill a small well that didn't have to pump so much. A normal irrigation well has to pump 700 to 1,000 gallons per minute to operate a pivot system, but a small well or pump could run day and night and you wouldn't run the pivot quite that much. That type of irrigation could really be a good thing for us. Of course, it was in the mix before the drought. I think the drought is really helping to get the issue through Congress.

ES: Historically, weather goes through cycles, alternating between very wet and very dry. With all the talk of global warming, what seems to be the consensus over whether the recent drought is part of a cycle or part of a trend?

Killebrew: Just talking with everybody and observing, it kind of looks like it's been a trend the last eight to 10 years. We just have not had great rainfall through here the last six or so years. We were short going into this year, and I think we're still probably 12 inches behind for the year. Hopefully, it may turn around and we may have six good years of rainfall. It's got everybody nervous. I know that.

This interview was conducted by Ed English, a staff writer for EconSouth.