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What It Takes to Make It to the Top

February 7, 2012
By: Ed Clark, Top Producer Business and Issues Editor
 
 

There is no ideal farm background, but some skill sets are crucial

Is there an ideal background for farming? The short answer is no. Business, agronomy, animal science, even engineering serve producers equally well. While most farmers grow up on farms and hone skills and knowledge from family members, even familial farm upbringing is not a necessity, given the will, desire and love of farming.

To become a highly successful producer and maintain that trajectory requires top production and business skills. Top Producer interviewed farmers, economists and farm consultants about their thoughts on the ideal background for a top farmer. You might be surprised at some of the experience they suggest is invaluable to success in farming.


Steve Henry

Nevada, Iowa

The farmers who Steve Henry looks up to the most are good stewards, good with people and good with handling money and they have a handle on how to use technology. "We have to have the ability to adjust to technological change," says the Nevada, Iowa, crop producer. "We always have to be learning, whether it is through university or Extension programs or part of a farmer network," he adds. Producers today are working with more people, which puts a premium on developing labor management skills. "We also have to make decisions faster, like other businesses, and we have to adjust to change," he says.
 

Gary Schnitkey

University of Illinois

The ability to "sell yourself" is as valuable as any learned skill set, says Gary Schnitkey, University of Illinois economist. For example, farmers who get the rental agreement need more than cash, which other farmers have—they must convince landlords that they will do the best job, which gets down to old-fashioned salesmanship, he says. Selling yourself is not just useful for landlords, it’s important for bankers, suppliers and others. Selling is natural for some farmers, but for those for whom is not, Schnitkey recommends marketing sales courses at colleges or special programs devoted to the topic.

Schnitkey also says it’s important to have or develop the ability to be comfortable with groups of people, so you can represent yourself and your farm in a good manner.

He recommends farmers obtain an MBA to further develop their finance, marketing and business organization skills.

Following college, Schnitkey recommends several years of working off the farm at another business, regardless of whether it is ag or not, to learn how other organizations work and function. It’s particularly valuable to learn good employee management skills.

Lastly, he thinks it’s important for farmers to study abroad and look at agriculture in other areas. "We compete in a worldwide market," he says.
 

Matt Stockton

University of Nebraska

Farmers today especially need a background that allows them to be competent and comfortable handling large sums of money, says Matt Stockton, an ag economist at the University of Nebraska. While it’s important to have business and production expertise, producers also can use a variety of consultants to boost areas where they have less knowledge or desire. There is no one path or
college major that’s right for everyone, Stockton says. In the future, he says, "agriculture will become more complex, require more skills." That means that producers will have to be lifelong students. "Not everything will need to be learned in the classroom," he says.
 

Marvion Reichert

Elm Creek, Neb.

One of the most important experiences for becoming a successful farmer is to take on a mentor to aid in the learning process, says Nebraska producer Marvin Reichert. Equally important is to have in your background the will to farm and the love to farm, or you won’t be successful. "I love farming—not every day, but by and large, I do. It’s not a vocation, but like being on vacation."

While Reichert has a college degree, he does not believe one is necessarily required to be a successful farmer, noting that he knows a number of successful farmers who do not have one. Some type of education in marketing and finance is important to succeed, though, he says.

He adds that today, farmers need expertise in business and the technical aspect of farming. Reichert believes it’s important for farmers to have a personality and the internal desire that will drive them to constantly upgrade their skill set by attending agricultural programs and seminars.

"You need some technical experience. You can either learn that in college or somewhere else. I have a business major, but I also took courses in chemicals and seed," he says.
 

Daren Englund

Holdrege, Neb.

One invaluable background experience that foreshadowed success for Daren Englund was the five years he spent following college working for Midwest Agri-Planners in Kearney, Neb. During this time, he constructed cash flows and financial statements for other farmers. "I not only learned how to do that, which benefits my own crop operation, but it gave me a lot of insight into farming," says Englund, who operates an irrigated corn and soybean farm in Holdrege, Neb. He grew up on a farm, but did not begin farming for himself until 2002. Today, he continues to do cash-flow and financial statement work for a couple of clients during the winter months.

While Englund believes having a business background is important in the high-finance environment of 2012 (he earned a business degree at the University of Nebraska), he does not believe there is any one top college major, or any path, for that matter, that leads to success.

"The most important thing I got from college is how to study, how to research things, and that has helped me solve problems on the farm," he says.

Englund adds that for a crop producer, either a major in the sciences or a major in business could accomplish that goal. That said, he believes that a business degree gives him an edge in some areas, like understanding global factors that cause markets to react.

He does not neglect the production arena, having taken courses in ag sciences such as agronomy. Englund continues to expose himself to production issues. Before making the switch to no-till, he attended conferences that gave him access to the knowledge of national experts and no-till producers themselves. "It was a very valuable tool for me to learn what other people had done," he says.

On the business side, Englund is part of the Nebraska LEAD Program, a leadership and education effort that tours colleges and universities, exposing participants to a variety of experts; organizes a trip to Washington, D.C., to visit with congressional representatives and the Environmental Protection Agency; visits the Chicago Board of Trade; and holds a two-week international trip to meet with farmers and others involved with agriculture in other countries. "We deal a lot with external issues that affect us," he says.

Continuing education is particularly important in agriculture because even from the technical side alone, the industry is changing so fast, Englund says. "Keeping on top of that is a full-time job."
 

Bob Aukes

Farm Business Consultant

Several decades ago, the ideal background for crop and livestock producers would have been a production degree, but that’s not so today, says Bob Aukes, a national farm business consultant based in Des Moines, Iowa. Today, business and financial skills share the stage with production skills as important elements for success, he says. Aukes agrees that experiences outside of agriculture can be beneficial to long-term farm success, such as positions in banking, even manufacturing.

He puts people management at the top of his list of skills that are important for success. "Deal with people and get good at it," he says. Other important skills are business management, technology, finance, budgeting and forecasting. In addition, it’s important to be able to figure out the most economical information package that fits your business, he says. "One individual is not expected to possess all these skills—build your team!"

Aukes says that for farmers who grew up on a family operation, as most do, it’s important to be able to step back and observe the good things that are taught, as well as the bad things, and discard the latter. "Figure out a way to step back and analyze yourself," he says. He also suggests getting involved with peer groups to have more exposure with people.
 

Jeff and Christy Hibbs

Albion, Iowa

To be a successful farmer, you must be honest about what you don’t know and surround yourself with people smarter than you, say Iowa producers Jeff and Christy Hibbs. They upgraded their skills by hiring a financial consultant who advises on finances but also teaches business principles.

The Hibbs honed their skills even more at the TEPAP management program in Austin, Texas, offered through Texas A&M University, which exposed them to world-class speakers and producers nationwide. "You have to have reliable and trustworthy sources of information," Jeff says. "You also have to consult with peers about what works and what doesn’t."

"You need people who can look at your numbers and offer constructive criticism," Cindy adds. Agriculture changes constantly, and we must to be able to change with it.
 

Mike Duffy

Iowa State University

Today, producers need to be well-rounded in a variety of areas from technology to business and surround themselves with the appropriate experts, says Mike Duffy, an ag economist at Iowa State University.

Regardless of their major, students need to expose themselves to ag business, more than at any time in the past, he says. Farmers need to understand accounting and finance, even if it isn’t what many farmers enjoy. "Either you do it, or hire someone to do it," Duffy says. "You don’t need to be the jack of all trades, master of none, but you do need higher education."

Furthermore, it’s important to have the kind of background that allows you to generate a network of peers for the future.
 

Mike Boehlje

Purdue University

Farming today is more complicated than it has ever been because it requires both technical and business management skills and capabilities, says Purdue University ag economist Mike Boehlje. It’s more than that, however. For instance, today’s top producer needs to be able to develop relationships with suppliers, which is crucial for success. It’s important not to cut such a great deal with equipment suppliers that they are reluctant to provide the excellent service required. In other words, understand that it’s a two-way street, he says. "You want an equipment dealer who’s willing to service your equipment if it’s over the weekend. Getting the absolute best trade-in may not be in the best interest of accomplishing that."

Furthermore, today’s farmer needs to develop experience in a broad number of areas: financial management, marketing, long-term planning and technical experience. Obviously, farmers can’t know everything, "so they have to think like a CEO to be successful," Boehlje says.

He says that while farmers need the understanding of basic science, the technological side of the business is changing so fast that farmers should expect to take workshops to stay on top of the latest technological developments. As for leadership and management skills, farmers should expect to spend at least some time taking courses at a community college or a four-year institution. "But be careful what you spend your time on. It doesn’t make sense to study today’s herbicides, since they are changing so fast," he says. He suggests spending less time studying technology, although doing so is important, and devoting more time to studying management.

One option to further skills when on the job is web- based learning, plus industry workshops, sponsored both by the private sector, such as seed, herbicide and media companies, and the public sector, he says. Regarding the latter, universities are increasingly sponsoring two- and three-day meetings on various forms of ag leadership, Boehlje says.

However, Boehlje says it’s also important for farmers to incorporate into their background a knowledge of business outside of agriculture. Thus, he advises reading broadly in the business press to understand how leaders in other businesses solve problems. In that regard, he advises producers to become involved in a variety of local business organizations, not necessarily just agricultural ones.

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FEATURED IN: Top Producer - February 2012

 
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