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December 2012 Archive for Leave a Legacy

RSS By: Kevin Spafford, Legacy Project

Kevin Spafford is Farm Journal’s succession planning expert for the Farm Journal Legacy Project.  He hosts the nationally-televised ‘Leave a Legacy’ TV, facilitates an ongoing series of workshops for farm families across the U.S., and is the author of Legacy by Design: Succession Planning for Agribusiness Owners.

Merry Christmas, and a Strong Start to 2013

Dec 27, 2012

Nevada   NRCSFrom Legacy Moment (12/21/2012).
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delivered via email each Friday.


 Christmas is upon us. A fervent wish might be peace on earth, good health and a vibrant economy. In agriculture, we should be thankful for growing opportunities. In fact, as an industry there is a demand for new farmers. USDA and a number of concerned organizations are spreading the word that there's help wanted on the farm.   

 
• Replace retiring farmers
• Feed a hungry world
• Develop new agronomic efficiencies
 
The qualifications are similar to any other profession.Tomorrow's farmers must have:
 
• An appropriate education
• A breadth of experience
• A network of mentors and advisers
 
Besides the skills and abilities necessary to successfully run the business and manage a team, applicants for the position of professional farmer must have a burning desire to succeed, good communication skills and a strong work ethic. For the right person, opportunities abound.
 
Enjoy this Christmas season and the assurance of knowing the promise of prosperity in the seasons ahead.
 

News & Resources for You:

If the winter weather offers you a bit of a respite, remember that the full Legacy Project 2012 Report and three full seasons of "Leave a Legacy TV" are available for online browsing.
 
Has your intended successor achieved the measurable accomplishments essential to every strong leader?
 
Use our Leadership Skills Inventory to assess a potential leader's skills, strengths and areas for growth. 

 

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 Photo courtesy o USDA NRCS.
 
 
 

Extending the Conversation

Dec 18, 2012

 

Montana Bison   USDA NRCSFrom Legacy Moment (12/14/2012).
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delivered via email each Friday.


Last week I shared some personal insight and a challenge posed by my son to help him establish a farm/ranch enterprise. In response, Gary Matteson, Farm Credit's Vice President of Young, Beginning, Small Farmer Programs and Outreach, weighed in. Based on firsthand experience as a farmer and his professional expertise with Farm Credit, Gary has invaluable insights for establishing a new venture. To extend the conversation, he wrote:
 
"Investigating potential businesses in retail agriculture requires the same tools used with any business planning effort but with an increased focus on what to produce, the most profitable markets in which to sell and how to access those market channels.
 
I'd say look first at retail agriculture businesses by market demand and market channels, then build farm production models to suit the channel. Finding a profitable market and market channel might indicate that it is more profitable to use your entrepreneurial skills as an aggregator or broker rather than as an agricultural producer.

Ag entrepreneurs frequently suffer from the inability to identify the core activities that generate profit. Instead, they do many tasks from production to value-added processing to marketing to distribution that might be best contracted out to others.

For example, FedEx, UPS and maybe even the livestock hauler next door all do a great job delivering stuff overnight. Okay, I realize that FedEx doesn't ship cattle, but the point is that maybe you can find someone who can do a given task cheaper/better/faster than you can yourself.

It's not that you can't haul cattle as part of a grass-fed custom meats business, but taking on the equipment costs and liabilities of livestock trucking might not be the best thing for the balance sheet of a new business. It's likely not an effective way to spend your precious management time either, when you could be out there selling more product.

Now, just because you can find someone that's cheaper/better/faster doesn't mean that for other reasons you want to keep that contracted service in-house. Maintaining customer relationships, risk management of critical tasks and efficient use of limited resources are important factors to assess regarding that most difficult of resources to account for: how to best spend your time as a retail agriculture entrepreneur.

Should you be building fences, making hay, or preg-checking cattle? The best way to answer that question is to know your costs. Retail agriculture-based businesses call for another type of cost center knowledge: identifying the marketing costs to sell your product. Spending the day at a farmers market selling a couple of coolers full of beef might bring in a healthy level of gross sales, but what do you net after accounting for time, travel, equipment, preparation and marketing materials?
 
Marketing costs are not insignificant, especially when you count the opportunity cost of your labor by asking what else you could be doing with your valuable time as owner-manager-entrepreneur. One way to gain efficiency is to look at retail ag business planning as modular. Planning for efficiency in retail agriculture begs for consideration of how to include other related enterprises that can grow from the core business.

Build your business plan with an eye toward adding offshoots. If the core business is production of grass-fed beef, think about starting out by selling at a farmers market to test the waters, then plan how you will access other market channels by diversifying with CSA (Community Supported Agriculture) or wholesale restaurant sales. In other words, from the beginning, plan how you will build your business capacity by diversifying your use of marketing channels.

The retail agriculture business plan you develop to show your lender doesn't have to have all the details for these offshoots, but showing that you are thinking of growth options is a great way to project a vision for a profitable future."
 
 

News & Resources for You:

What is meant by 'retail agriculture'? Gary Matteson explains in this piece for Farm Bureau.
 
Or read the full version of the report here, for more: "...to bridge knowledge gaps on how young and beginning farm operators and small farm operators utilize newly emerging domestic marketing opportunities." ("The Emergence of Retail Agriculture: Its Outlook, Capital Needs, and Role in Supporting Young, Beginning, and Small Farmers," by Gary Matteson and Alan R. Hunt; August 2012)
 
Meet three young farmers who are forging their way in burgeoning ag careers.

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Start Here

Dec 11, 2012

 

Boise ID   USDA ARSFrom Legacy Moment (12/07/2012).
Please join us for future issues,
delivered via email each Friday.


A couple months ago, I clipped an article, The Ultimate Growth Business, out of the Wall Street Journal. The layout was complete with photos of a couple greenhorn farmers. What caught my attention was not the pictures but rather the title, which reads, "How do they make the transition?" Good information and encouragement can come from the most surprising places.
 
We're often contacted by aspiring farmers who are intent on a career in agriculture, but they don't know where to start or how to make the transition. Recently, my son expressed an interest and challenged me to help him establish a farm/ranch enterprise. As our discussion developed, we agreed to research a couple of niche markets that address consumer demands for local, natural and healthy fare.
 
Since we don't live on a farm and don't have land, we're either at a distinct advantage or disadvantage, depending on your perspective. We're completely flexible and able to go anywhere. We don't have any preconceived ideas about what should or shouldn't be, but we also lack experience and don't have a family farm to fall back on.
 
Whether an operation will actually be established is yet unknown. However, we started right where I'd recommend anyone else start:
 
1. Research and learn everything you can about food trends and consumer demands.
 
2. Select a few of the most intriguing food products and visit with experts—from current growers to wholesalers/processors and from consumers to co-ops.
 
3. Begin gathering information for a business plan. Besides a great idea and a lot of ambition, the banker will want to see a detailed pro-forma.
 
These initial activities will help the aspiring farmer decide if he/she is on the right track. I'll continue to provide progress reports from our experience as my son and I explore our common interests.
 

News & Resources for You:

A clear and concise business plan can help you create the farm operation of your dreams.
 
Designing a business should be one of the most exciting activities in the life of a farmer.
 
Meet some of our nation's most imaginative and inspiring farm families in archived episodes of "Leave a Legacy" TV.

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Photo courtesy of USDA NRCS.
 
 
 

Who Do You Follow?

Dec 04, 2012

 

Tractor   USDAFrom Legacy Moment (11/30/2012).
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delivered via email each Friday.


 
To become a good leader, you must first become a good follower. Though my professional interests are unique, I follow several mentors who guide my actions, inspire my thoughts and fine-tune my character. With them I reach new heights and accomplish more; without them I will never reach my full potential. John Kotter, chief innovations officer at Kotter International and professor at Harvard Business School, is one of my mentors. Though we've never met personally, I allow his teachings on leadership to shape my methods.

On Nov. 19, in an interview on BBC World Service (from 7:24 to 13:06), John explained some of the subtle yet important differences between management and leadership. The conversation was based on the premise that what's needed is "less management and more leadership." Though the terms are often used interchangeably, John says, "They're different processes and they serve different functions."

Leadership, he says, is about:

• clarifying a vision.
• getting many people going in the same direction.
• motivating, inspiring and empowering them.

He further explains that we need leaders at every level in an organization and in every stage of the process. Leadership is not a hierarchical function; it's a professional responsibility for every participant in the organization.
 
Leaders communicate in a sincere and authentic way. They trust others to act accordingly and serve appropriately.

Kotter concludes by reaffirming that management is about control and leadership is about letting go.
 
News & Resources for You:

Form an action plan to cultivate leadership.

What are the premier agripreneurial traits of a farm leader? Meet 12 fine examples.

As Season 3 of "Leave a Legacy TV" concludes, remember that all episodes are archived online, for viewing on your next snowbound day. 

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Photo courtesy of USDA NRCS.
 
 
 
 
 
 
 
 
 
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