Gut-Check

January 31, 2017

 

 

As 2017 begins to take its final shape, I think this season is going to be a big “gut-check” year for a lot of farmers, and that’s not a bad thing! In order to make this year a success, we all need to be focused on improving as farmers, and not get stuck in the ditches of lower commodity prices and negativity.

 

Experienced farmers have made it through some tough times, and the younger ones have not; but there is one thing that everyone is thinking about a lot more this year, and that’s cash flow. In many operations; Partners, Creditors, Landlords and others are pushing producers to fine tune their budget more than they have since the early 2000’s. We can’t ignore the financial pressure out there, but I want to make sure we don’t lose focus on improving as farmers!

 

Some farms will make changes this year based on the economic environment, and that’s ok. Everyone still needs to remember, however, that every action has a reaction. Recently, we put together a presentation for some of our clients that showed random and anonymous operations, within our business, and compared how each individual farmer compared his or her yield to a trend line. Some of these growers share fencerows, yet their operational yield stacked up very differently from one another.

  • Farmer John used profits from the last few years to rent more ground and update machinery.

  • Farmer Bob used profits from last year to build fertility on all his farms to very high levels.

  • Farmer Steve has a huge dairy operation that keeps his focus a majority of the time.

  • Farmer Bill has had land in his family for years and has tile and terraces.

  • Farmer Tim just rented 1,000 acres from a new landlord with poor fertility.

Do you think these guys have different challenges? I would say so! Each one of these guys is going to make about 100 different decisions throughout the year, and very few of them will be the same. That’s why some achieve higher yields than others… and it happens every year. By the way, I promise that it’s not always the guy with the best fertility or better ground that has the best yield! Any one of these imaginary farmers above has the opportunity to be the guy that makes the best decisions and comes through this thing on top!

 

As we go forward, we need to individualize each approach for each operation in order to make the best decisions throughout the next growing season. There will be retailers, neighbors, family members, lenders, and other farmers in your community who will be in a very “money saver” position this year (and that will rub off on others). While saving money is certainly not a bad thing, it doesn’t help us continue to improve as farmers.

A lot of farm businesses feel like they are preparing for a fight this year, and they are. They need to make sure that they have the right people in their corner with the right plan when that bell rings!

 

“What can I change?” … “How much can I change it?” … “What can I not afford to change?”

 

Make sure you can answer questions like these today. If you think you could use more guidance, we want to encourage you to ask your AgVenture Yield Specialist (AYS) for his or her perspective. With a large network of experience, Agronomy expertise, and proven dedication to their clients, the AgVenture network and every AYS has a box full of tools that can help address some of these challenges.

 

Winston Churchill once said “You will never reach your destination if you stop and throw stones at every dog that barks.” In today’s agriculture, there are a lot of barking dogs. However, those producers who are committed to their goals and continue to improve as farmers will be successful long-term. Stay focused, and we’ll see you in the field!

 

Tyler Rees, CCA, Legacy Ag Solutions.

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