Beginning Farmers Remain Optimistic Through Challenges Date: 3/20/2018 1:27:27 PM Author: Mike Patterson Educational Opportunities: Articles Interests: Grain, Young, Beginning Farmers Home > Education & Events > March 2018 > Beginning Farmers Remain Optimistic Through Challenges Share: Optimism… As I spoke with some young, beginning and small farmers at a recent conference, this theme kept coming up. Now I realize that you may be questioning my sanity when I say there is optimism in agriculture today, but it is out there if you’re willing to step aside from some of the coffee shop talk. We talked a lot about how to make their operations successful long term, reducing costs, taking advantage of marketing opportunities, and planning for the future. We learned about finding our competitive advantage, and igniting our passion to fuel success. Along the way we also had a little fun, getting to know some new people and network with other producers. It’s always great to hear things from another perspective and talk about what’s been working, what’s not working and gain new ideas and insights. “Best in Class” Dr. Michael Bohlje, Senior Associate at Centrec Consulting and professor at Purdue University shared a message entitled “The Farm Economy: How Do You Win in Tough Times?” The piece of his program that seemed to resonate the most with farmers I spoke with was around how to be “Best in Class.” In order to be successful in 2018 and beyond, producers need to have “Intense Cost Control.” This isn’t just about being cheap; it is about being efficient and productive. You need to analyze each input and determine if spending that additional money will not just improve your yield but improve your yield enough to cover the marginal cost of the product. Another key to being “Best in Class” is knowing your cost on a per unit basis. You might say that you don’t know what your cost per unit is because you don’t know the yield you will get. That is true, however, you do have an APH from your crop insurance, or a DHIA report that shows your herd averages, don’t you? Use an average or expected production level to determine your cost per unit. The best producers I work with can tell me their cost of production for 2018 in less than 10 seconds. Do you know yours? If not, be sure to check out our Grain Margin Manager tool. Finding your competitive advantage is another key to winning in tough times. What do you do better than anyone else? Focus on and intensify these things to do them even better. These aren’t new concepts, but more of a 'back to basics' approach that will help you be successful. Marketing Marketing is a topic for discussion at just about every farm meeting ever held. If every producer did it well, we wouldn’t be talking about it so much. However, it grain marketing isn't rocket science. Ed Usset, from the University of Minnesota’s Center for Farm Financial Management, talked about some of the common grain marketing mistakes and how to avoid them. Marketing has been a tough discussion item for a while, but there seems to be some life in commodity markets recently. Many young producers really know their stuff on marketing, and are waiting to take advantage of pricing opportunities. They have learned to be ready to act quickly as prime marketing windows have been short lived in past years. If you don't know where to start on your grain marketing plan, be sure to learn what a powerful marketing plan should look like. Retirement and Succession Planning Another topic that is near and dear to the hearts of many farmers is retirement and succession planning. This is always a little bit of a difficult topic to handle in a large group since every situation is different. However, there are always some keys to making this process of transition of ownership work. In talking with this group, I kept hearing that communication is key to this process working well. Also, working with good professionals such as a consultant, attorney, and accountant are keys to success. If you or your operation are in need of assistance, reach out to the professionals you are already working with to help steer you in the right direction. Remember, putting together a good plan can take some time and effort, but a successful transition is worth it in the end. Make sure to read our Guide to Farm Succession Planning for more answers to your questions. It Starts with You Many times when we go to conferences, we just sit with the same people and talk to our same group of friends. Try searching out others who you don’t know as well to build your personal network. If you make a good connection, keep in touch to bounce ideas back and forth for your operations. Overall, I would say our future is in great hands. The young, beginning and small farmers I talk with are very optimistic for their future. The long term view for agriculture is positive, as every day there are more mouths to feed in this world. Many of those mouths are in developing countries that are growing their wealth. As they grow that wealth they will want to eat better, and that means increased demand for our agricultural products. American agriculture has shown time and time again that we are up to the challenge of feeding a hungry world. These young producers are up to the challenge. They have passion, resiliency, and determination to be some of the best agricultural producers in the world; and they will be. Starting a career in farming comes with its own unique challenges. You need a financial lender that goes beyond the basic operating or equipment loan. Compeer Financial's program for young and beginning farmers is designed specifically for those who are ages 35 or younger, or have been farming for 10 years or less. We offer a veriety of beginning farmer loans and workshops for understanding finances. Comments There are no comments. Leave comment Name: Email: Comments: Enter security code: Mike Patterson - Financial Officer Articles The Ag Industry is Feeling the Pressure Videos Commodity Production: the Low Cost Producer Always Wins Articles Maintaining Working Capital for Your Farm Operation Articles Is a Hedge Loan a Good Idea for Your Operation?