If you’ve been involved in agriculture for a while, the current downturn we are experiencing may draw comparisons of other times when the industry has experienced low prices, high land costs and tightening margins. However, for those who are newer to agriculture, these current conditions are a first.
Despite today’s circumstances, when young or beginning farmers look toward the future of agriculture, what do they see? Having the opportunity to work with these farmers on a daily basis, I’m often met with a great passion, determination and optimism for the future of our industry.
On a general basis, the young and beginning farmers I work with tend to be more open to trying new practices or adopting the latest technology if it means greater efficiencies or a higher-quality product. It shouldn’t be a surprise that many in the industry are branching out and diversifying their operations to benefit from additional revenue opportunities. Some examples that come to mind are participating in local farmers markets, selling freezer beef directly to the consumer, getting involved in contract barns and renting out hunting land. Continually looking outward to gauge other and keeping an open mind will allow you to be more proactive in taking advantage of new ideas that come your way.
Often times,farming isn’t a business which can be done alone. It is imperative young or beginning farmers are proactive in finding resources and industry partners. These professionals can lend their expertise to assist in a land purchase, gain access to equipment and build good financial habits.
As we look to the future, the amount of information and skills a producer is expected to have will only continue to grow. Seeking out partnerships to your operation will help bring balance, clarity and different viewpoints. These professionals can assist you in understanding the latest trends and farming innovations, market conditions and impacts of global events on the local farming economy. Building a team of trusted industry advisors or partners will also aid in keeping you and your operation more agile.
When seeking out partners, make sure they are a good fit for you and your operation. Don’t build a team that is too like-minded. This makes it easier to find new or different solutions. Look for partners who complement and balance out your skills and areas of expertise.
A few examples of partnerships you might want on your bench include a lender, grain marketer, agronomist, seed sales representative, crop insurance agent, veterinarian and an accountant. Building out your team of partners will help get you and your operation to the next level as you navigate challenges together and lean on their expertise and insights.
It is important to continually educate yourself and seek out opportunities to better understand changes with evolving technology and changing consumer habits. If you are looking to diversify, challenge yourself to learn about a specific technique or process. Use your network of partnerships to find ways to build that knowledge. Whether it is by attending tradeshows, industry events, conferences, online webinars or learning one-on-one with a trusted advisor, become a better manager for your operation. Your partners might also be able to connect you with mentors who can share their experiences and advice.
It’s understandable that young or beginning farmers want to hit the ground running, but it’s critical to be aware of the risk factors when making decisions. You want to grow your portfolio, but you want to do it in a way that makes sense for your individual situation. In some cases, the only opportunity for growing a land base is by getting involved in a high-cash rent deal. It’s paramount to evaluate those decisions carefully. You don’t want to have to turn down future opportunities because you took advantage of a wrong one.
Patience also comes into play when working across generations. Perhaps things aren’t progressing at the rate you want them to — either as a young farmer looking to get more involved or as a more experienced farmer looking for the next generation to start taking over. Work on building your team and take time to communicate plans for the future with them.
Often, it isn’t feasible for the younger generation to fully buy out the generation currently in control, but putting a plan in place is a great first step. Be proactive about succession planning and communicating about the future — especially knowing that the changes won’t happen overnight. Take full advantage of the time you have working alongside fellow generations to share knowledge, teach and discuss goals for the future. Have patience in taking care of those around you, and the land you run, to sustain the farm today and create a multitude of opportunities for the future and for future generations.
Jacob Chapman is a Financial Officer with Compeer Financial. For additional insights from Chapman and the rest of the Compeer team, visit Compeer.com