Recently, I delivered an economic outlook for the agricultural industry at an organization’s combined board and staff planning conference. After my presentation, a participant asked, “Is it good to be a farmer?” Well, as the economic reset sets in for most commodities, I believe it is important to examine the elements of the answer to this question.
Immediately, my first response is yes. The agriculture industry is strong and opportunistic, particularly, farming. According to farm record summaries, the top 20 percent of managers consistently earn a 6 percent rate of return above long-term rate of inflation and above long-term rates of borrowed capital. Granted, these are above-average managers who maintain good financials and management practices, and are prudent in investments, living withdrawals, and farm costs. These managers do not handle the largest operations but manage within the realm of their resources. Therefore, if profits are a priority in measuring long-term success, analysis finds opportunities abound.
Next, farming, like any business, allows you to be entrepreneurial. Farming rewards creativity and innovation in several areas including production and marketing. Additionally, every farm operation is structured differently offering flexibility in the alignment of the many, moving pieces. In farming, there is no formula or magic strategy that guarantees success. Instead, success can be created in numerous ways. n the future, growth may be in local, natural or organic products, or perhaps, in traditional farm operations, or maybe in larger, more complex, extended family corporations. Farming is a widely varied profession and depending on your goal, there is a type of farming to get you to there.
Finally, family comes first. I often hear in informal conversation with producers that raising a family on the farm is priceless. Growing up on a working farm affords children a unique perspective as less than 2 percent of our country’s population is directly involved in production agriculture. Additionally, farm life allows children to gain emotional intelligence. Whether or not they ever learn to drive a tractor, children growing up on a farm absorb a heightened sense responsibility, teambuilding, life-and-death as well as the seasonal nature of the industry. This type of intelligence is a life-building, rare skill. Benefits such as farm life do not always have a dollar amount assigned.
Regardless of the economic outlook, the cycle, or even where we are in the cycle, it is still good to be a farmer. The agriculture industry is integral to global economics, continuing innovation, and generations of sustainability. Farming requires strength of body, mind and heart. It is meaningful and fulfilling work that provides the food, feed, fiber and fuel upon which life is sustained. That is honorable and good.