5 Best Management Practices for 2019

February 15, 2019 04:46 PM
 
Farmers must have a goal of being a high-revenue and low-cost operation. 

Why are some farmers more profitable than others? How do some farmers find opportunity in tough times? “Production is important but focusing on the business side of farming has become the dividing line,” says Jim Knuth, senior vice president, Farm Credit Services of America. 

The macroeconomic forces at play in the grain markets point to continued low-margin environment for farmers, Knuth says. This means farmers must have a goal of being a high-revenue and low-cost operation. 

“Today’s farmers need to spend as much time running their business as they do running their combine or tractor,” he says. “Focus on getting better, not just getting bigger—bigger alone won’t solve issues.”

Focus on financial acumen.

With today’s thin profit margins, a guess at your financial standing won’t cut it. “You cannot look at the financials or business management practices once a year,” says David Kohl, professor emeritus of agricultural finance at Virginia Tech University. “You have to constantly monitor them. What created deviations? Was it something we did positively or negatively from a management decision?”

Manage time wisely.

Farmers should follow the 80:20 rule, encourages Danny Klinefelter, professor emeritus and Extension economist at Texas A&M University. “Around 80% of your results come from 20% of what you do,” he says. “It’s that way on almost everything. Do first things first. So many people never reach their long-term goals because they spend too much of their time doing second things first. Prioritize. Delegate or hire it done; you can’t do it all.”

Be proactive in cutting costs. 

Farmers who are surviving and even thriving in the fifth year of a down cycle in grain production are using a few key business strategies, Knuth says. “They have found the sweet spot between maximizing profits versus maximizing yield or minimizing costs,” he says. “To adjust to this low-margin environment, they have sold under-performing or non-performing assets.” Also, they have proactively negotiated cash rent prices and are using or exploring flex leases. 

Kohl encourages farmers to look at their business and identify three areas to improve, such as your grain marketing, asset utilization or yields. “Try to be 5% better in about three areas—never more than three—or you lose focus,” he says. 

“A 5% increase in price received, a 5% decrease in costs and a 5% increase in yield will often produce more than a 100% increase in net returns,” Klinefelter adds. “The effect is cumulative, multiplicative and compounding.”

Execute a marketing plan.

To be successful in grain or livestock marketing, farmers must make it a priority by dedicating time, Knuth says. “It’s not the last thing to do, the first thing to do.” Knuth encourages farmers to study normal market cycles and do pre-harvest marketing. Also, don’t try to shoot for the highest market price—just a profitable price. “If you try to chase the last dollar, you rarely catch it,” he says. “We tend to see market highs and market lows in the rearview mirror.”

Aim for continual improvement.

The most dangerous phrase in business, Klinefelter says, is: that’s how we’ve always done it. “It is an economic reality that for your business to succeed and continue successfully beyond you, management must learn, adapt and continuously improve at the rate set by the leading edge of the competition and not by your comfort zone,” he says.

Today’s successful and profitable farmers are lifelong learners, Kohl says. He encourages farmers to attend three to five educational opportunities annually. This will help you look beyond your farm and garner new ideas. 

Back to news


Comments

 
Spell Check

Reacheal Mills
Los Angeles, CA
2/16/2019 06:39 AM
 

  I AM FINIALLY OUT FINANCIAL BONDAGE THANKS TO MOORE LOAN COMPANY (mooreloancompany@yahoo.com) Or text +1(414) 454-9493. I am Reacheal Mills currently in California USA. I would like to share my experience with you guys on how I got a loan of $170,000.00 USD to start up a new business. It all started when i lost my home and belongings due to the bank draft I took to offset some bills and some personal needs. I became so desperate and began to seek for funds at all means. Luckily for me I heard a colleague of mine talking about this company, I got interested although i was scared of being scammed, I was compelled by my situation and had no choice than to seek advise from my friend regarding this very company and was given their contact number, getting intouch with them really made me skeptical due to my past experience with online lenders, little did i know this very Company "MOORE LOAN COMPANY". was a godsent to me and my family and the entire Internet World, this company has been of great help to me and some of my colleague and today am a proud owner of well organized business and responsibilities are well handled all thanks to of Robbinson Moore (mooreloancompany@yahoo.com).. So if really you are genuinely in need of a loan either to expand or start up your own business or in any form of financial difficulty, i advise you give Mr Josef Lewis of Progressive loan the opportunity of financial upliftment in your life Email: mooreloancompany@yahoo.com OR Call/Text +1(414) 454 9493. Thanks.

 
 
fang
HOUSTON, TX
3/17/2019 07:44 PM
 

  TESTIMONY TESTIMONY TESTIMONY Hello friends!!! My name is Jeff Chandler. I want to testify of the good Loan Lender who showed light to me after been scammed by 3 different Internet international lender, they all promise to give me a loan after making me pay a lot of fees which yield nothing and amounted to no positive result. I lost my hard earn money and it was a total of $1,000.00. One day I was browsing through the internet looking frustrated when I came across a testimony of a woman who was also scammed and eventually got linked to a legit loan company called mr peter Loan Company and where she finally got her loan, so I decided to contact the same loan company and then told them my story on how I have been scammed by 3 different lenders who did nothing but to cause me more pain. I explain to the company by whattsapp (+2349063879939) you can also Email the company on their Email Address on (peterloanfirmcompany112@gmail.com) and all they told me was to cry no more because I will get my loan in their company and also I have made the right choice of contacting them. I filled the loan application form and proceeded with all that was requested of me and to my greatest astonishment I was given a loan amount of $580,000.00 US Dollars at a very low interest rate of 4% by this great Company. if there is anyone who is also in need of an urgent loan should kindly whattsapp this great loan company offers on (+2349063879939) or kindly email them. (peterloanfirmcompany112@gmail.com) managed by mr peter loan a God fearing man and here I am today happy because this company has given me a loan so I made a vow to my self that I will keep testifying on the internet on how I got my loan. Do you need a loan urgently? kindly and quickly contact This great company now for your loan via whattsapp +2349063879939. or Email (peterloanfirmcompany112@gmail.com) and share your own testimony thanks.

 
 
Close