A decade ago, two Australian farmers sat down with a blank piece of paper. Their goal: design the perfect family farm. Where would the farm be located? How many acres should it include? What would it produce? How much machinery would it require? Who would fill which roles?
Both farmers—John Gladigau and Robin Schaefer—were from average-sized farms near Loxton, located in southern Australia. After joining his family operation, Gladigau started noticing farm-size and farm-type trends emerging around him.
“The bigger farmers were getting bigger,” Gladigau says. “Lots of people had a ‘get big or get out’ mentality. I started asking myself questions: So where are we going to be in the future? Will I own my neighbor’s property, or will he own mine?”
Hence the blank sheet of paper. Gladigau and Schaefer decided to pool resources, knowledge and passions to form Bulla Burra, a collaborative farming operation that today spans 27,000 acres and produces cereals, legumes and canola.
“Collaboration creates a synergy that can drive businesses to a whole different level,” says Gladigau, who is a student and advocate of collaborative farming. After setting up his own collaborative operation, he’s helped farmers across the globe create systematic approaches to partnering with other like-minded farmers to produce economic efficiencies and professional business cultures.
Tight profit margins and competition tend to create an environment where combining strengths can have an exponentially positive effect on a farm’s bottom line, says Chris Barron, president of Carson and Barron Farms in Rowley, Iowa. In 2006, he began a collaborative farming venture, known as the FUN (Farmers United Network) Group, with several neighboring producers.
“Successfully collaborating with others can take a tremendous amount of initial effort,” says Barron, also a financial consultant for Ag View Solutions and Top Producer columnist. “Yet the benefits can far outweigh the challenges in terms of financial and quality-of-life improvements.”
Collaboration isn’t for everyone. “In the past few years I’ve probably talked more out of collaboration instead of collaborating,” Gladigau says. “Farmers are just fiercely independent. The No. 1 reason collaborative businesses fail is emotions.”
To create a successful collaborative business, Gladigau says, you must find compatible business partners. Then, take time to get the model right.
“Ensure the economics stack up by doing comprehensive modeling,” he says. “Each farmer comes in with different debt structures and different attitudes to risk.”
Joining forces with another farmer will not guarantee success, Gladigau is quick to point out. “For us, it was a catalyst not a cure.”
Core Lessons of Collaboration
Australian farmer John Gladigau has discovered several key truths about the practice of collaborative farming:
- Emotions don’t go away. “One of biggest threats when we started was we were good friends, but our wives were best friends,” he says. “That’s a scary thing to do.”
- It’s not all about the money. To Gladigau and Schaefer, collaborative farming has meant more family time and better decisions.
- You can create inefficiencies through scale and corporatization. “It is so easy for fat to turn up in between,” Gladigau warns.
- There’s a price for creating a brand. Large farms face more criticism of farming practices, he says, yet the exposure also means access to legislators who can enact positive change for agriculture.
The Five Ps of Collaborative Agreements
What creates a profitable and positive collaboration between two farms? Chris Barron, an Iowa farmer who started collaborating with neighboring farmers in 2006, has identified five criteria:
People
Think of producers in your area who are pleasant to be around and have an easygoing personality. Identify whether these producers would be willing to combine your two operations.
Purpose
Determine why you want to collaborate. Reasons could be to improve quality of life, financial benefits or access to labor and management. Do these goals align with your potential partner?
Processes
Evaluate whether your farming practices are similar to those of your potential partner. Document goals, roles and responsibilities, and create an agreeable timeline.
Production
Assess the crops and livestock both farms produce to identify any mutually beneficial opportunities. For farms with similar focus areas, efficiencies can result from sharing equipment and labor.
Pricing
As agribusinesses consolidate, they place value in having fewer but larger customers. Standard marketing programs do not always apply to large orders. A seed-corn order of 2,500 units or more, for example, could provide a collaborative farm operation with leverage on purchase timing and net price. Multiunit discounts on machinery can include newer used equipment and make a big difference in your overall equipment investment. Combining corn bushels among several farms and marketing them to a processor could improve your basis opportunities.
Read more about Gladigau and Barron’s collaborative farming operations at bit.ly/farm-together
