Letting Go the Rope
Years ago, when I still considered myself athletic, some boating friends helped me learn to water-ski. After a few spectacular wipeouts, my buddy driving the boat pointed out that when I fell, the first thing to do was let go the rope. My instinctive reaction was just the opposite. When things started going sideways, my grip tightened.
I believe a similar situation is developing in farm country and some farmers may be tipping toward a spill. Indeed, the splashes of dairy, hog and other livestock operators going down have been around us for more than a year. With much of the 2009 crop going into the ground at margin or below, and the prospect of producing well below cost of production for 2010, I can't help but wonder if grains are next.
Reasons We Hang On. There are various reasons people hang on too long: Specialization has narrowed the farmer's skill set and put all our income eggs in one basket. Worse, in our mental ranking of occupations, anything other than farming is a step down.
There are also physiological and psychological reasons for why we maintain our death grip on the rope. Chronic stress not only affects how we view the future, it also physically rewires the brain to new neural pathways that make having novel thoughts more difficult. In short, under intense threat, we tend to favor habit over logic, and since habit is the problem, a down-spiraling feedback loop develops. We simply cannot imagine taking a new action such as quitting.
Nor do we hear advice urging us to find another way. No adviser wants to look foolish if a freak economic event suddenly rains profits, or to demoralize already troubled producers with naysaying. Finally, our culture disdains "quitters," equating them with "losers."
With no powerful voices outside us to urge us to let go the rope, and an inability to reason rationally with our brains swimming in adrenaline, we keep on keepin' on—at least, until intervention by lenders, suppliers, etc., takes control of our future.
How could this be made to change? With great difficulty, I think. First, agriculture needs to understand what the new level of volatility really means. We look at price charts and ponder insurance or other strategies to help mitigate the swings, but that just demonstrates how inadequate our steady-state brains are for operating in such a minefield.
We need to update a culture that equates quitting with surrender. When you're trapped between a brain that is struggling to shake off familiar behavior patterns and an environment that frowns upon the reasonable solution, it could be that quitting farming is an amazing act of courage, not capitulation.
The Right Choice. Many grain farmers are already suspecting a major sea change, and fingers are tightening on the rope. But those who drop it now could avoid a devastating experience. While many of us are committed long-term, those with different planning horizons—such as newer entrants with marketable skills or those with no successor who look forward to second careers—should keep "leaving the kitchen while it's still cool" as a rational option.
Of course, each situation is different and it's a decision you have to make for yourself, based on your goals and finances. But when you wait until you are forced to let go, it is often too late for a good outcome.
Having watched my father reluctantly retire in 1979 to make room for me, I have seen the other side of "bailing out": It brought a surprising sense of relief from anxiety, not to mention the avoidance of the equity annihilation that many of his peers suffered.
- OCTOBER 2009