A farmer called on Christmas Eve to say he was planning a sale. "This isn’t fun anymore," he told Moe Russell, president, Russell Consulting Group of Iowa.
That conversation frames the future of farming well, Russell says. While there will be reasons for some to exit the industry over the next five years, those who stay will have abundant opportunities.
"In the dog race of farming, if you’re not the lead dog, the view’s all the same," Russell told an audience during the 2014 Top Producer Seminar in Chicago.
Here are a few takeaways from Russell’s presentation to top producers:
Good times don’t last. Russell once heard of a 1940s farmer who paid for his farm in a year and had $7,000 left over. He grew edible beans. "I don’t think that will ever happen again," Russell says. It marks an aberration that occurred post-World War II when the U.S. had a distinct competitive advantage over other crop-producing countries.
There’s more money to be made in farming than in any other industry. "However you have to understand cycles and profit from that," Russell notes. Those who’ve bulletproofed their balance sheets and have strong working capital will be in a great position to catapult ahead of competitors in hard times. Cycles have occurred for 400 years and will continue as long as fear and greed persist. He recommends a collection of short stories about people who have weathered difficult situations titled "The Adversity Paradox," by J. Barry Griswell. Leaders in managing cycles from other industries include Caterpillar, Russell says.
Get an adviser to put you in the top third. In the area of commodity prices, if you’re not getting into the top third of the price range most years, Russell says, find an adviser with a good track record to achieve that goal. There are many advisers who can help producers do this.
Thank you to the 2014 Top Producer Seminar sponsors:
Premier Sponsors: Agrigold, Apache Sprayers, BASF, Bayer CropScience, Cargill, Case IH, Challenger, Dow AgroSciences, DuPont Pioneer, ESN, Firestone, Koch Agronomic Services, RCIS, SFP, Syngenta, Top Third Ag Marketing
Co-Sponsors: Advance Trading, CliftonLarsonAllen, The Gulke Group, Kennedy and Coe, Michelin, Novozymes, OPI Integris, Soybean Premiums, Wyffels Hybrids