In agriculture, the coffee shop has been a popular networking site for years, though many business-oriented farmers have graduated from that venue. Now, producers use more professional networks to improve their business, identify opportunities, gain new perspectives and socially connect to peers.
"Large producers, in particular, often find themselves somewhat isolated in their community, at least regarding business peers,” says Danny Klinefelter of Texas AgriLife Extension. "There often are few operations the same size, and those that exist may be competing for the same land and resources.”
A peer network can be valuable for facilitating business opportunities and sharing ideas, says Bret Oelke, University of Minnesota Extension economist and owner of Innovus Agra LLC, a farm consulting group. "Networking helps you find opportunities and can set you apart from the competition,” he adds. This might involve hearing about niche markets for specialty grains, land for sale or a chance to share equipment.
Tim Richter of Lime Springs, Iowa, for example, got to know a farmer from Minnesota at a farm management seminar. They soon figured out their field work was spread over enough time yet the distance was close enough that they could share some machinery. Richter also learned of a land purchase opportunity in another state through his informal network.
Input buying groups in Illinois and Indiana started the same way and save members money by purchasing fertilizer and chemicals in bulk.
More formal peer networks bring even greater value, though they require organizational effort.
"Farmers tend not to have a board of directors, and the management is all insiders,” Klinefelter observes. "Often, there aren't enough people involved to offset the leader's weaknesses and bring different strengths to the table. Family relationships can interfere with honesty and participation in discussion. A peer group can give you a sounding board for ideas, explore ‘what-ifs,' help define goals, hold you accountable to your plans and provide similar operations against which you can benchmark your performance.”
Trust. For such a group to be effective, it's all about trust and chemistry. "You have to meet and share thoughts regularly in order to build up a reservoir of goodwill—a rainy-day fund of familiarity and trust that you can tap into as your farming career requires,” Oelke explains.
"You have to give if you want to get,” he says. "In other words, if you want others to share their insights, expertise and relationships with you, you must do the same for them.”
"All members need to hold the same value system,” Klinefelter adds. "For the group to be effective, you have to share details, tell the truth and take criticism. The best groups will challenge you and push you out of your business comfort zone.”
Practicalities. Unless you are just setting up a buying club, it's often best to look outside of your neighborhood for peer-group members. Oelke suggests that you use someone you know to introduce you to target contacts. "Often, a go-between will put in a good word for you,” he says.
Klinefelter suggests identifying four or five potential members to start the group and adding another four or five once you are organized.
"The first things you need to agree upon are a vision, a set of objectives, a confidentiality agreement [what is said in the group stays in the group] and the basis for a member's removal from the group,” Klinefelter says.
Some groups include nonfarming members for their perspective. Candidates include management consultants, bankers and co-op managers.
"You may want to bring in a consultant to administer personality profiles early on. If you know each others' personality type, you can better understand where people are coming from and what to expect from them,” Klinefelter adds.
Once your initial formation work is done, having a speaker can break the ice and give you something to discuss. It's also a good idea to have on-site visits to members' operations.
Decide how often you'll meet and stick to a schedule. Distance will determine frequency and duration of meetings. "Some far-flung groups meet for two days once each quarter, while a group with nine members in northern Illinois meets for a half day twice a month,” Klinefelter says.
Having a meeting agenda saves time by setting goals and giving members an opportunity to prepare in advance.
If you've met people at meetings that you think might be good candidates, reach out to them, Oelke says. "Get the ball rolling. A good group may be the key to taking your business to the next level,” he adds.
Benefits of Networks
> New enterprise opportunities
> Joint purchases: machinery or inputs
> Sounding board for ideas
> Problem solving
> Hold you to your plans
Top Producer, March 2010