Over the past few years in agriculture, farms dealt with an operating environment including many pressures: tight operating margins, ongoing low grain prices, and years that just plain didn’t pencil out.

For many farms that situation flipped in the past year as grain prices rose and margins improved. Farm profitability suddenly became a possibility – and in many cases, a reality, in 2020.

But, as Farm Futures editor Mike Wilson points out in his recent column – it tends to be during the tough years when farm leaders really develop the skills and practices of great financial managers.

They must. It’s sink or swim. The farmers who make it through a prolonged tough time in ag might naturally carry that lean and savvy mentality with them for a bit, but it takes a focused effort to maintain good management practice for the long haul.

Build it in

There will always be good times in agriculture and there will always be leaner times in terms of margins and profitability – anyone who has farmed for a period of time knows that. Great managers on the farm build their “best practices” for financial management into the processes and strategy of their operations – and use them regardless of whether they’re in a good or tough cycle.

I’m sure you will be able to think of the practices that you have implemented in your management strategy within the past few years. Take a few minutes to make a list of what you have changed or done differently due to the low margin environment of recent years.

Sometimes the practices and processes farms develop during tough times seem to go by the wayside once prices and margins take a turn higher. What are you going to do to maintain management practices that helped your operation survive the downturn?

Three thoughts

Here are a few ideas on how to keep strong management practices at the forefront.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.