This Is A Good Time To Quit

October 12, 2017 06:12 AM
 
This Is A Good Time To Quit

In 1979, after years of struggling to farm together with a know-it-all son who had unexpectedly returned to the farm, a farmer I knew decided he’d just quit at the ripe old age of 59. He sold his worn-out equipment to the obstreperous offspring and headed to Florida for half of each year. The son, meanwhile, plunged headlong into the infamous ’80s with unwarranted confidence.

Dad had many peers who marveled at how he walked away. In a few years, he along with everyone else realized he caught one of the last few trains out of town to safety. By bypassing the equity-shredding years of the next decade, he preserved his savings and helped cushion the blows for his son. In fact, he often bragged that the best business decision he ever made was to quit. While he was the beneficiary of lucky timing, it still took courage to say when.

Many of his friends ended up losing much—and some all—by the time a respectable retirement age rolled around. Their efforts to protect hard-won wealth were no match for plunging prices, farmland devaluation and double-digit interest rates. More than once, I heard them congratulate Dad for his foresight and nerve.

Knowing When To Quit. Identifying the best time to quit can only be done in retrospect. Neither should you expect academic or media voices to inform your decision. I cannot recall a “get out now” advice article in my four decades of farming. We write countless survival columns and highlight stories of scrappy odds-beaters, but it is taboo to suggest quitting as a good business move. But as my father proved (unintentionally), there is indeed a time for every purpose under heaven.

So why now? We already know the causes. Farms like mine (corn and soybeans, about 2,000 acres) have seen four years of declining income. There are few reasons to expect a dramatic upturn and many to fear more of the same or worse. The ethanol buildup was a one-time stimulus. No one predicts an ag trade boom and hopes instead for no harm from trade talks. Nor have pundits suggested the possibility of a generous farm bill.

Resistant weeds will overturn our production rituals. Input costs suggest monopolistic market power. We have not exhausted the resources of irrational high-rent bidders in an increasingly transparent land-rental market. Health insurance costs are pricing in political uncertainty. The list goes on.

The Clock Is Running. If my guess is right, we are still a few months at least from recognizing the scope of the economic danger. In this window, machinery can be sold, acres rented or sold, and landowner influence leveraged (“Rent my acres for $X, and you can rent my uncle’s, too,” for example). If we learned anything from the ’80s, it is that window can close quickly and remain closed for a long time. Today’s lower interest rates cannot offset other cost factors.

Meanwhile, because the national economy is growing (albeit slowly), alternate employment is more feasible than usual. Contrast this with trying to exit during a general recession—which could happen if you delay. Furthermore, if you move to where good jobs are going begging, your odds of success mushroom.

Getting out when the getting is good is hardly a motto for a coat of arms, but it is not stupid, either. It is our learned attitude of occupational arrogance that makes job-changing anathema for farmers. Passion won’t pay the mortgage, however.

If your reaction to this suggestion to consider not farming as seriously as continuing is one of revulsion, there is likely still time for a successful ending. If it seems to make sense, it probably does to others, and you are in a race to the exit.

I’ve seen good endings and bad. Like 1979, this strikes me as a good time to quit. Even if I’m right, I know few will heed. It has somehow become nearly un-American for farmers not to go down in flames.  Nonetheless, of all the unsolicited advice I have offered, none has been more sincere. TP

 

John Phipps, a farmer from Chrisman, Ill., is the on-farm “U.S. Farm Report” commentator. To read more from his blog, log on to johnwphipps.com. For links to John’s sources, view the online version of his column at TopProducer-Online.com.

 

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Comments

 
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Joe Branham
Centreville, MD
10/15/2017 03:43 PM
 

  Sign me up

 
 
tnfarmer
Jackson, TN
11/4/2017 12:35 PM
 

  John, for some time I've fast forwarded thru your segments on USFR due to your tone, etc. Basically, I think you quit some time back & are just now realizing where you are in the process. Are you right? Likely for your case, you are considering the mindset you've had. For others? time will tell & each case different. There are always pros & cons & people find what they want to find. I've recently been doing some research into some ancestors. They turned out to be very successful, but started in much worse times than these...good luck in future ventures

 
 
Delta88
Memphis, TN
10/13/2017 08:53 AM
 

  Its sad that more people can see the futility in continuing to march down the same road expecting profitability in todays scenarios. The retailers are in control; the producer at the authors level is at their mercy. The only thing most can do is to rent out or take a portion of their operation and dedicate it to farm to table type production. The profit from large scale production of oilseeds and feed grains will go to the extremely vertically integrated enterprises.

 
 

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