October 26, 2016
Guy Mills Jr.'s great-grandpa used to have a saying: "Never underestimate a young man with his back against the wall."
"When a young man gets his back against a wall, it makes him think," explains Guy. "How are you going to survive this? You've got to think your way out of this."
Of course, he's talking about the tough economic situation the ag sector is in right now. Times may be tough, but Mills, who farms near Ansley in Custer County, sees down economic times as an opportunity.
"Volatility equals opportunity," he says. "The real money will always be made during the tough times."
BEHAVIORAL SCIENCE: Guy Mills Jr. harvests corn, while his son, Gary, pulls the grain cart on their farm near Ansley in October. Mills balances his operation on three pillars — production, marketing and finance, and sets specific goals for each.
The question is: What do you do differently in a tough economic year? The challenge, Mills says, is to think about the big picture — in other words, think about the ag economy in the long term and not waiting for tough times to happen to prepare.
For Mills, the planning process starts with a simple question: What are your goals?
He balances his operation on three different pillars — production, marketing and finance — and sets specific goals for each. Sometimes a grower's goal fits squarely in the finance pillar, such as improving profit margins. This might also take some adjusting on the marketing and production side. So, the goals of each side have to be congruent. "It's a behavioral science," Mills says. "You really define yourself by what you want to accomplish."
In order to do that, you've got to know where you are, and that's where data comes in to help keep track of all expenses and incomes. "How do you get past pure emotion? Keep track of everything, analyze everything. You cannot improve yourself until you measure yourself," he says. "The whole reason we collect data is to turn it into knowledge. That's what we need to do with this whole process is turn it into knowledge, and you're able to get past your emotions."
Mills' short-term goals include increase average corn yields by 20 bushels by 2020. His long-term goals include getting into the top 20% of farmers nationwide in terms of cost of production. This means balancing all three pillars — production, marketing and finance.
However, one of his biggest long-term goals is ensuring the operation is economically viable for his three sons, the next generation — Brian, a PhD student at Oklahoma State University; James, an undergraduate student at Chadron State University; and Gary, who farms with him in Nebraska. And that means surviving the tough economic times.
"America was built on capitalism," Mills says. "Capitalism can justly favor some, can unjustly favor some. It can justly disfavor some, and unjustly disfavor some. If you're determined about what you do, it can most definitely favor you."
This is the first in a series of articles featuring Guy Mills on managing in times of tight margins.
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