Farmers and ranchers around the country went about their business with spring and summer plans that included planting, calving, daily milking, and grain hauling. These are the activities that farm operations have done for decades and completed this year, in spite of a pandemic and any potential associated risks. Farming has a cyclical rhythm that requires specific activities during specific times of the year.
Security in the Known
The seasonal requirements of every farm and ranch are on a timeline and are so ingrained in each farmer and rancher that external issues to the farm are placed aside as there is focus on what needs to get done. There is also security in repeating a process that has occurred for farming generations. Planting, spraying, and spring calving confirm for each farmer that a new year has begun, full of optimism and excitement. It’s part of the farm DNA.
Don’t Delay Decisions
The business side of farming has been challenging (to be kind) for the last few years. I have written in the past about Tight Cash Flow for farmers as working capital has been decreasing for farm operations. Farmers and farmland owners must not allow current challenges to delay changes in their business. These changes differ from the annual normal farm pattern, as it is a change to that pattern. It takes focus to see through the pressures of farming to determine if these changes need to be made. Not making a decision is in fact, making a decision.
Sometimes the changes are small and sometimes they can be significant:
A shift to organic
Cover crops
No-till
Grass fed beef
Drip irrigation
Selling / Buying farmland
or it could be:
Implementing detailed financials
Evolving to agronomic technology
Integrating production and financial information
These are just a few of the business decisions farmers are reviewing/making to reshape their future. Delaying a decision once you have all of the information, can be costly to your farm.
The Fear Factor
A powerful response to this type of change can be fear. Fear of doing something new can exist in everyone, not just you. Tim Ferriss, author of The 4 Hour Work Week has said, “Many a false step was made by standing still.” Fear of change can freeze us in our current situation, even when we know better. There is another Tim Ferriss quote, “Being able to quit things that don’t work is integral to being a winner.”
Study, learn, prepare, and adapt to the new business direction. When you are able to clearly state the next step/direction it will provide the courage for you to make it happen. Get your team together, develop the plan and then execute.
The Financial Details
At this point you may be thinking that it is okay to make a change on a leap of faith. Nothing could be further from the truth. It will take work, planning and consultation to formulate the plan, but it will take courage to make it happen. Take the time to 1) sweat the financial details, 2) make sure you have looked at all of the alternatives and 3) developed your course of action.
Preserving the value of your farm is the credo for Farmers First Trust. Our MDPT approach opens increased value for each of your transactions that sell farm or ranch land, grain, livestock, or any farm product. Take the time to study the MDPT approach and don’t make a mistake by standing still, because there is a lot to be accomplished.
Michael L Gustafson is a Principal with Farmers First Trust helping farmers preserve the value of their farm. Send your thoughts to Mike at mgustafson@farmersfirsttrust.com.