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Serving: Central

Next farmers – business skills

The next generation of farmers will foremost have to be good businessmen — “just being a good producer won’t be enough,” says Jeremy Jack.

“When my father was my age, he was able to shell 300 bushels of corn in a good day,” the Belzoni, Miss., producer said at the annual meeting of the Mississippi Agricultural Economics Association. “Today, we can harvest 40,000 bushels in a day. Who knows how things will have changed when my son is my age?”

Jack, who earned a master’s degree in agricultural economics at Mississippi State University, says the next generation of producers “will no longer be farmers just growing grain and taking it to the elevator — they’ll be biological manufacturers of products for specific end users.

“The knowledge tools they will need will include human resources, financial management, ability to delegate, public relations, strategic planning and positioning, macroeconomics, and good channels of information, including legislation pertinent to their business.”

Farms of the future will be of four types, Jack says:

1. Large commodity farms, producing as much as possible on as many acres as possible with as little equipment and labor as possible — “very aggressive producers, running farms with a manufacturing mentality, built around science and technological systems.

“There are already a lot of 20,000-acre farms in the Mid-South; there are going to be more.”

2. Niche markets, focusing more on quality than quantity, producing high value specialty crops (such as vegetables) on relatively small acreages.

3. Weekend farmers/gardeners, who sell what they produce locally at farmer markets or perhaps through you-pick operations

4. Those on their way out — “people stuck in the status quo, who do things ‘because we’ve always done it this way’ and can’t adapt to the changes required to grow and be more efficient.

“In times of change,” Jack says, “the learners inherit the earth. The future belongs to those who see possibilities before they become obvious.”

Today’s producers, and those of the future, must utilize the same management and business principles as major corporations, he says. They include:

Human relations: recruiting, interviewing, and keeping good employees.

“To get high-quality workers, you must treat them as high-quality workers, with good wages and benefits,” Jack says. “Be sure to have detailed job descriptions, so each employee will know exactly what he’s expected to do, and conduct thorough evaluations of employees.

“Consider attaching goals to year-end bonuses — if an avoidable accident results in a bonus reduction, it’s amazing how that will make an employee more safety-conscious. If you can provide health insurance, that’s a plus. We’re now looking at college plans for our employees’ children.”

Getting good labor was a major problem for their operation, Jack says. “We had good-paying jobs, but we just couldn’t find reliable people locally who wanted to work. If you’re confronted with an obstacle, you find a way to go around it. For us, that was the government H2A program, which allows us to use foreigners, who really want to work, and come here as temporary workers.

Budgets: “Do them again and again, and include worst-case scenarios — what will happen if everything goes wrong, as it has this year with all the rain and weather problems.

“Try to have monthly meetings with your banker so you’ll each know where things stand throughout the year. If you see things are starting to go wrong, you can stop the bleeding before it gets too bad. Use accrual accounting to know where your business stands at all times.”

Delegate responsibilities: You can’t do everything on a farm every day — but you have to know how it should be done in case someone doesn’t show up,” Jack says.

“Make sure you have the correct people doing the correct job. If you don’t have needed skills or knowledge yourself, outsource those tasks where you can, whether it be office work, field work, or marketing.

“Good consultants don’t cost money. I look at our fields every day, but we also want the crops checked by other sets of eyes that may spot things we miss. Consultants also have the advantage of knowing what’s going on with other farms in the area — information that may be helpful to you.”

Public relations: With fewer and bigger farms, “everyone in an area knows who’s doing what,” Jack says. “You should make people aware of your business — how many jobs you provide, and the impact of your operation on the local economy.

“You should have a plan for every disaster that might occur and how you would deal with neighbors, the press, your landlords, and public officials. Do things right, and let people know you’re doing things right. Don’t take a chance on bad publicity ruining your business.”

Strategic planning and positioning: Have a plan and constantly evaluate it, Jack says. “Challenge your standard operating procedures; continually ask, Is this the right way to do this? Can I do it better, more efficiently?

“Challenge everything you do; never be ashamed to admit you were wrong. Watch what your competitors are doing and learn from them. Always have an eye to the next generation when making infrastructure decisions.

“The main difference between being in the top 10 percent and the top 25 percent is timing,” Jack says. “Are you moving forward as fast as your leading-edge competitors who make up the top 10 percent? Don’t accept limitations — find a way to go around them, as we did with the H2A program to solve our labor problem.”

Macroeconomics: Have a briefing book of information that is important to your business and update it daily.

“Oil, fertilizer, seed, chemical, and commodity prices; inflation; land values; interest rates; dollar value; freight rates; basis prices; government policies — we input all this daily into an Excel spreadsheet so we can see where stand relative to all these factors,” Jack says.

“Develop good information channels rather than listening to coffee shop talk, much of which likely isn’t reliable. Start a peer group of fellow producers to share information. I participate regularly in a group of six producers around the country to share ideas and insight.

“Participate in management development programs to broaden your knowledge and skills — instead of November to February being deer camp months, use that time for continuing education and executive training seminars.

“Keep informed about legislation on local, state, and federal levels, including tax and environmental policies, trade, energy, finance, transportation, and other issues that affect agriculture. You have to be able to factor all these into your decisions.”


TAGS: Equipment
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