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Business Skills for Young Farmers

March 2, 2011
 
 

The 2011 Tomorrow’s Top Producer program focused on business education to help farmers age 35 and under grow their businesses, manage employees and hone their marketing skills.

"I came for the education, but mostly I like talking to other top farmers and hearing their stories," says Benjie Stranz of Westfield, Ill.

Stranz was among the 200 attendees who gathered in Chicago in late January on the eve of the Top Producer Seminar to network with young producers and learn from other farmers, market analysts and experts from across the nation.

Read the following highlights from the event and mark your calendar now for the Top Producer Summer Seminar, which will also include a Tomorrow’s Top Producer track. The event will be held June 7 and 8 at the Isle of Capri Conference Center in Bettendorf, Iowa.

Manage Like a CEO

Who is the boss on your farm? Does that person only "boss" others or does he or she manage them?

Dick Wittman of Wittman Consulting says the key to creating strong leadership for a farm or ranch is to clearly define goals, values, mission and vision for the operation.

"Not having a plan can be one of the most devastating things for most families," Wittman explains.

Once everyone knows the direction the farm is headed, the right people can be empowered to work together as a team to lead the operation.

Wittman says that an ideal manager:

  • is a facilitator, not a boss;
  • empowers people and doesn’t micromanage;
  • focuses on people, resources, information and technology;
  • thinks strategically;
  • promotes teamwork, positive thinking and professionalism; and
  • is willing to be held accountable.
     

"Above all, you need to avoid bossing," he advises.
 

Work On Your Business, Not Just In It

Farmers are known for their work ethic and tireless labor. But your farm will often benefit more from time spent working on your business, not just in it, says Darren Frye, president and CEO of Water Street Solutions.

Frye challenges young producers to recognize when they are playing the role of entrepreneur, manager or technician on the farm. He says technician jobs, such as planting, livestock chores and marketing, can be hired out, but a business owner must focus on building and communicating a business plan and vision for the future.

"If you want the farm to grow and advance, you have to move into a role on the farm that leads the business forward," Frye explains.
 

Become the Go-To Farmer

You might be the best farmer to do business with in your area, but do other people know that?

Bret Oelke, an educator with University of Minnesota Extension, says that how you position yourself as a farmer will determine your success with buyers and suppliers.

"As a progressive ag business, you need a mission statement," Oelke explains. "You need to have personal and professional missions, visions and goals."

Oelke says you need to craft a positioning statement for your operation. The statement is a precursor to branding that will allow you to emphasize how you will interact with the businesses with which you will negotiate.

Ask yourself:

  • What do we do best?
  • Who is our target customer?
  • What needs do we fulfill for our customers?
  • Who is our competition?
  • What makes us different from our competitors?
     

"You need to know what sets you apart from your competitors," Oelke says. "Your competition is anyone that farms around you."

Once you create a positioning statement for your operation, Oelke says, you should commit it to memory. Be ready to recite it when you are negotiating input costs, lending rates and rental
agreements.
 

Louisiana Farmer Wins Sustainability Award

Today’s young producers must balance the financial, environmental and societal impacts of agriculture. In recognition of this responsibility, Ryan Kirby, a 3,500-acre farmer from Belcher, La., was named the winner of the 2011 Tomorrow’s Top Producer Sustainability Award, presented by Top Producer and sponsored by Bayer CropScience, at the Tomorrow’s Top Producer meeting on Jan. 25 in Chicago.

Kirby says his goal is to provide a stable farm income for his family while benefiting the environment. At 33, he shows a passion for agriculture and for growing cotton, corn, soybeans and wheat sustainably by using water-conserving irrigation systems, precision application of fertilizer and inputs and diversified crop rotations.

"Bayer CropScience and Top Producer recognize that the younger generation of growers will need to demonstrate sustainability to their buyers and the end consumer more than ever before," says Nick Hamon, vice president and head of sustainability for Bayer CropScience. "We want to reward those producers who show sustainable practices in their farming operations today and who plan to grow sustainably in the future."

In his application, Kirby defined sustainability in agriculture as "the ability of agriculture to feed the entire world population without sacrificing the long-term viability or health of anything that
agriculture affects, from the farmer to the consumer and the environment."

Kirby received a Toughbook laptop computer and a scholarship to attend Farm Journal’s Corn College educational seminar this summer.
 

Build Flexibility into Marketing

The best thing young producers can do to enhance their marketing is to build flexibility into their marketing plan, says Chip Flory, editor of Pro Farmer. "Farmers do this by understanding futures and options," he says. "Once you learn how to use futures and options, it gives you all kinds of flexibility in your planning and decision making."

For example, if you make a bad decision and hedge corn at $5 and it goes to $5.60, using futures and options can get you out of that hedge, Flory says.

The other important thing to know in marketing is your local basis and how it can change. "When marketing your grain, you have to know your basis and how it compares to the three-year average," Flory adds.

With this information, you can pick the right tool from your marketing toolbox.


Thank You to Our Tomorrow's Top Producer 2011 Sponsors

Agrotain, Bayer CropScience, Cargill and Pioneer Hi-Bred

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FEATURED IN: Top Producer - March 2011

 
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