Today’s Farmers Think Like CEOs

February 26, 2014 06:02 AM
Today’s Farmers Think Like CEOs

How today’s farmer CEOs shape modern agriculture with business minded management.

"There’s nothing on my farm I don’t know how to do or couldn’t do," says Jeremy Jack, a Mississippi farmer and partner in Silent Shade Planting Company. "I’m also the CEO of the operation."

Today’s farm owners and operators have to think like CEOs to stay competitive, but they can’t be afraid to do the work of any of their employees, says Jack, who spoke on a panel today at the Bayer CropScience Ag Issues Forum in San Antonio ahead of Commodity Classic.

"I’m the general, but I’m also a soldier on the farm," Jack says.

Bruce Frasier, owner of Dixondale Farms in Clarrisa, Texas, says today's farmers have to think like a CEO and not be afraid to change the business if it’s not working. On his onion farm, for example, Frasier recently moved toward more mail-order business for his onion transplants instead of most of the sales going to other farmers. Today, 25% of his sales go to farmers, 25% go to garden centers, 25% go to mail-order and 25% go to big box stores. In mail-order segment, Dixondale ships 200,000 onion transplants a year. The change has generated five times the amount of sales the farm used to make.

"We have had to change based on survival," Frasier says. "We took a bigger area of marketing so we can do more of the retail. We are price givers. We want to get more. The demand was there, but the distribution center was breaking down. In 1990 fuel prices went up. We used to send a truckload into town; now they want a half-load truck and an inventory. So we segmented the company into the four areas to spread the risk."

For Illinois farmer Chad Leman, co-owner of Leman Farms Inc., labor is the biggest challenge as a farm CEO. Leman Farms grows corn and soybeans and markets 60,000 pigs a year.

"Where am I going to find people who are willing to come into a livestock business and work with animals all day?,’ Leman asks. "Most young people today are at least four generations from being on the farm."

Leman is also concerned about succession. He believes farm business today is more mental than physical. "I am looking at margins 12 months out. We are price takers, it is a mental game. Am I willing to lock in a double instead of a home run? Being able to lock in positions and hold those margins takes a lot of time in the office," Leman says. He has four daughters and firmly believes that any one of them could come back and run the farm business. It’s no longer a male-versus-female profession, he says.

For Frasier, who has 200 employees who are mostly seasonal labor, immigration reform will be key to the future of his business and finding employees. "We have been aggressive and we pay well. The way I market my onions now, I’m able to make more profit, we can pay better by the piece break," Frasier says.

Still, as a CEO in agriculture, Jack says one of the most rewarding aspects is being able to institute a change in the production process that makes a difference in the outcome of product. Technology has been a huge benefit on Jack’s farm, which is 95% irrigated.

"The most challenging thing is the black swan events that might be around the corner and the environmental regulations coming on us," Jack says.

"It is exciting that we are running a million businesses, and if we want to change direction, we can," adds Leman. "As CEO of my farm, I don’t have to run any changes or ideas through a board. But therein also lies the challenge. At the end of the day, the success of the farm is up to me."


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