Producers wear many hats, but not all hats fit or make the most financial sense. Examine your operation and determine if outside help is needed.
Determine which parts of your operation are best done by others
When Steve Copenhaver started farming in eastern Iowa, he didn’t own a combine. For seven years, he hired a neighbor to harvest his corn.
Copenhaver says this arrangement allowed his operation to grow in size and diversify. "I think that was one of the best decisions I’ve made. As much as I wanted to harvest my own crop, I wasn’t set up financially to do so."
When the time was right, he bought his own combine. Yet, Copenhaver learned a valuable lesson early in his career. Sometimes, the people you hire can do a job better than you.
A farmer wears many hats. The fact that you can perform every element of your operation doesn’t mean it makes financial sense.
Identifying Strengths. Moe Russell, Farm Journal columnist and risk management consultant, says the duties of a farmer fall into four categories: marketing, finances, agronomy and human resources. "In very few cases are people really good at all four," Russell says. He advises farmers to determine what they like doing and are good at, and, at the same time, which areas they don’t enjoy and aren’t as efficient in.
As farming becomes more complex and technical, Russell says, bringing in someone with a specific expertise, such as precision technology, trading or machinery maintenance, can really pay off. "Know what you don’t know and hire it done," he says.
Often, he says, by expanding your knowledge base through additional resources, you can move the needle in a specific area of your operation, whether that is agronomy, marketing or human resources.
Copenhaver is a sole proprietor, but says he considers the employees at his local co-op as his hired hands. When he doesn’t have time to spray his crops, a quick call to the co-op means his fields will have what they need in a timely fashion. "You have a small window to spray, so the $6 application fee is insignificant compared to the timeliness," he says.
In addition to row crops, he raises hogs. A task he always hires out is pumping manure pits. "In 10 hours, a crew can pump my pits and fertilize my fields. It would take months for me to do what they did in 10 hours."
When it comes to marketing, Copenhaver used a marketing and brokerage firm for several years.
Through his subscription, he receives trade recommendations, sell signals and daily newsletters with helpful information. He says this relationship helps him stay up-to-date on what’s moving the markets and navigate the volatile ag economy.
Of course, there can be a downside to hiring out jobs. Copenhaver says you definitely lose control and working knowledge of your operation. Also, you might not be satisfied with the quality of work. But, he says, if that’s the case, you should look for other opportunities. "Find someone you trust who can do the job right."
- Mid-November 2012