A conversation with Tom Leffler
04/01/2012 8:54 AM
08/08/2014 10:09 AM
Tom Leffler is a news junkie by profession, but not always by choice.
A broker and adviser for agricultural futures and options with Leffler Commodities, he works out of an office that looks a bit like the command station for a missile silo, with three computer screens in front of him and an array at another desk. Across them come constantly changing prices and news updates.
He works during the day in the basement office in his Augusta home, taking calls from clients, conducting research and filling out paperwork.
He is married to Patty and they have two grown children and several grandchildren. A third child, their son Cory, died of a ruptured aorta about a year ago while cutting wood.
Are you always this busy?
“It varies. You can hit a stretch where you won’t hear the phone ring, but I need that because I’ve got things I’ve got to do. I’ve got to put out a newsletter every afternoon, paperwork that you wouldn’t believe. You’ve always got something going haywire. It’s not like I’ve got time to put my feet on my desk and watch the news. There are times when I want to see anything but the news. I get tired of the news.”
What is the business, exactly?
“We have two businesses. We’ve got the futures and options side. That’s where we do nothing but brokerage, the buying and selling of futures and options for customers. We give them a little help for doing the trade, but that’s not much money. The other side of the business is ag consulting, where we work with farmers and livestock producers, helping them market their production, help them protect their livelihood with price support in the marketplace.”
Has it gotten more complicated in recent years?
“It’s a world market now. You have to be more attentive than just what’s going on in your backyard. One thing that farmers are kind of guilty of is not seeing past their own problems or prosperity. It’s a lot bigger picture than that. When you’re raising corn one year … but production is up in the Corn Belt, you got to pay attention to that. You have to pay attention to who’s buying right now. Is China in the market? How is the crop coming in Brazil and Argentina because they are in the process of harvesting?”
How did you get started?
“By doing the marketing on my own farming operation in Americus, which is 10 miles northwest of Emporia, and got interested in futures and options. I left our family farming and cattle operation in September of 1989 and started doing this in the spring of ’91. My brother is running the farm. My dad is still involved and 81 years old. My brother and I are the third generation on that farm. My main involvement is helping with marketing.”
Is there too much speculation in the market?
“You got to have speculators because if the price of corn is $8, which is one heck of a high price, and you want to sell, who is going to take the other side? When the farmer is selling the market, he’s passing his risk on to the speculator. But there are a lot more than what there used to be and they’re a lot different than they used to be in their trading methods and size.”
What do your clients want to know?
“How high is it going to go and how low is it going to go? I mean, seriously, that’s all they want to know. When should I sell? The bottom line is, if I’m working with an actual hedger and we’re trying to protect their livelihood, that’s really only part of the equation. Where do we need to be? Where are you profitable?”
How did the MF Global bankruptcy in October affect you?
“MF Global cleared our trades … they held the money of our clients, which has always been sacred. The bankruptcy wasn’t the big problem. It’s the fraud that took place, with somewhere around $1.6 billion of the customers’ money that is missing … 72 percent has been returned to the clients. Now they have filed claims in bankruptcy court for the remainder.”
Was that tough to deal with?
“I had not been feeling well and came in at 6 in the morning and was going to hand it off to the brokerage in Memphis when the news broke. I sat here until 6 or 7 o’clock that night taking phone calls, sicker than a dog. It’s bad enough that you’re sick physically, but you’re sick mentally because you know this is not good for your clients or your business. So that was a hell of a day.”
You had a crisis when your son died a year ago. Why did you stay in the business?
“I took a week off. … I really struggled with whether I wanted to stay in this business. It was something that made you stop and think.”
Why did you stay?
“I don’t know. I’ve got a good relationship with clients and felt that would let them down if I walked away. They depended on me to help them through this MF Global thing. The response I got from clients after Cory’s death just astonished me. I had an ex-client in the northeast part of the state who called me, shoot, I don’t know how many weeks after Cory died, and said, ‘Tom, if I’m bringing up something you don’t want to talk about, just tell me,’ but he said he had heard about it and just wanted to call. I appreciated the hell out of that.”