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Agricultural Economics in Today’s Market

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Many operations are subconsciously using the economy as an excuse for not advancing. It’s time to battle that behavior.

Like many of you, I have found myself caught up with the impact $7.00 corn had on many operations. The conversations I have with many farm operators inevitably turn to the markets, and the effect of $7.00 corn. This comes out in many forms. There are individuals who were conservative and built their working capital because they saw too many spending money on new work vehicles or buildings that don’t necessarily bring back a return to the operation. Then there are those who worked to grow their farms. Finally, of course, there are many of the younger generations coming back to the farm, with a hope of living the life they love without the financial struggles experienced by other previous generations.

A Deeper Look into Agricultural Economics

The success you achieve will have very little to do with the markets, or which of those categories described above you fit in. Success is the culmination of decisions, timing, people and skill, but many of those methods, practices, and policies affect our agriculture – which is what is referred to as agricultural economics. Asking yourself these questions, regardless of a downturn economy, will help you determine the health of your business and it’s progression in the next few years:

How’s Your Story Affecting Decisions?

What’s your story? The way you were raised can dictate the choices you make. Your values will influence your decisions about the direction you will take with your farm, family, and staff. Most of us have adopted the views of our parents. Sometimes their values may have also caused you to make decisions that hold your farm operation back (both in positive and negative ways).

Don’t get me wrong; your parent’s values are what built the farm you’re a part of today. With the changes in technology, capital restrictions, economic outlook, and a variety of farming practices your circumstances are much different from theirs. Look at your decisions and be sure you are not making them based on information that is 50 years old. If you’re conservative, then understand what it looks like to be conservative in today’s environment and ensure that you’re not being so conservative that it’s holding your ag-business back. If you’re a risk taker, understand what risks you can take in today’s environment without putting your business in jeopardy. Use training, education, and self-development to ground your choices and protect your farm legacy for future generations.

Am I Prepared for This Path?

Any path you take requires preparation. An operation’s financial health is the lifeblood that keeps it alive. Knowing how to use money for a healthy operation, and finding a balance are key to weathering the economic storms we will face. Start by maintaining accurate records in a financial system that goes beyond cash accounting. If the accuracy of information is there, then you have the foundation built to start interpreting and applying information that paints a true picture of your farm. Looking at the reality of how your farm is positioned will take you well beyond any general advice found in farm magazines or generalized consulting services.

What Can I Do to Seek and Apply Knowledge?

Today, when we want to know anything, we pick up our phone or tablet and Google it. There is no shortage of knowledge out there. Most of us don’t even have the time to absorb and apply all the knowledge found at our fingertips. Due to time constraints, many farm operators are not adapting their business at the speed they must in order to remain competitive. Most operators know they need to change and develop aspects of their business, but the ability to articulate and act on what they know eludes them. Frustrated (and probably a little defensive), they go back to what they know, the familiar, because they just don’t know where to start to get new ideas implemented.

These feelings of frustration create an unnecessary internal struggle. Why is it unnecessary? Because there are solutions out there, valuable expertise that will promote both business and personal development around processes, accountability, coaching, knowledge, experience, resources, and systems. This is where FamilyFarms Group’s agricultural economics expertise can really help your ag-business thrive.

How Am I Hiring?

Raise your hand if you struggle to find qualified employees who want to come work on the farm. There is a significant number of opportunities out there. Regardless of education or past experience, those who are willing to learn and apply themselves can make a decent living. In order to attract this kind of quality employee, you’ve got to be willing to provide on-going opportunities through wages, benefits, and continuing education.

Take Charge of Your Business Now

Are you an owner who has wasted time worrying about the effects of the market and climate, instead of focusing on the areas you can manage? Many farmers find themselves stuck on the areas of life that are powerless to manage. But they have to remind themselves to re-focus and commit to looking at the areas where improvements can be made. Allowing the highs and lows of the market to become a roadblock is not the answer. Focused attention and efforts in areas that impact the future success of your ag-business is the key. Training and education, maintaining your finger on the pulse of your operation’s finances, using the expertise available to you and hiring the right people are just a few of the things you can do to positively impact key areas of your operation. Other farm owners are out there doing it for their businesses and, with the right help, you can too.

If you need help determining the health of your farm or the right way to deal with agricultural economics for a brighter future, contact the professionals at FamilyFarms Group. We are here to help you outline your specific challenges and top level goals. Also, don’t forget to take advantage of our Free Resources to gain more insider knowledge for improving your farm in every area:

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Written By

Chris Whited

Chris Whited

North American New Business Consultant | | 618-372-4048

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