One of the highlights of traveling is engaging with people at conferences, workshops, and seminars. When traveling is like the old movie Planes, Trains, and Automobiles starring the famous actor John Candy, it is rewarding to hear the stories of how agriculture producers have made positive adjustments in their business, family, or personal lives.
At a recent event in the Midwest, a young producer under 40 years of age indicated that he had taken my advice during the good times in the agriculture economy from 2007 to 2012. At the time, he was concerned about financial liquidity in his business as a result of rapid expansion and growth. In this case, he sold farm land at $13,000 per acre to replenish his working capital. This decision allowed him to take cash discounts and provided more flexibility in both his grain and livestock marketing programs. By using these strategies, he was more profitable during the economic reset. However, the big payoff was his ability to purchase the same acreage at $7,000 per acre when a producer became financially distressed and in need of cash. The young producer admitted that giving up the land initially at a high price was tough on his ego, but crunching the numbers and asking for a fresh perspective paid dividends.
Next on the trail is a comment from a producer who now employs a marketing service. This producer felt that his marketing skills were deficient, and that finance and production were his expertise. The marketing service provides him with coaching and the information needed to execute a marketing plan. The investment in marketing assistance is a winning combination that has paid off. The producer commented that farming is fun when it is profitable and generates positive cash flow.
Another producer indicated that he reluctantly took my advice to develop a projected cash flow. He stated that the first year was the most difficult. He discovered the benefits of analyzing the cash flow projections on a monthly basis so that adjustments could be made before the year ended.
Another group of producers comprising three families has created a formal strategic alliance to build off their strengths. The alliance was created after an in-depth analysis of the group’s resources and talents were combined with a written business plan and legal agreements. The group has been very profitable and the alliance relationship has contributed to more work-life balance for its members. Initially, the older generations were against the formulation of the alliance. Years later, they now are touting how effective the alliance is and have even stated that it was their idea!
These are a few fresh perspectives from producers with a positive mindset that I have interacted with during my travels on the road. When traveling becomes difficult, I am reminded of how rewarding it is to interact with innovative producers making forward progress in their farm operations.
The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.