Fifteen years ago, I facilitated a strategic planning session that sparked an idea: what if we could better prepare young farmers for the business realities they will face? That session led to First Dakota National Bank’s Emerging Farmer Program, which I have been involved with ever since. At the recent kickoff for their seventh class, I watched another group of aspiring young producers dig into the year ahead.
What makes this program unique is its comprehensive self-assessment of business skills conducted prior to the beginning of the program. The recent pre-assessment results reveal some eye-opening gaps in young farmers' business readiness. In this article we will take a look at what we discovered when we looked at the pre-assessment numbers and why these numbers are so important.
The Skills Gap: What the Data Shows
Financial Management: The Confidence Crisis
Self-rated skill level: 6.8/10 Perceived importance: 9.7/10 The gap: 2.9 points
Many participants had completed university degrees but still lacked confidence operating in the "school of hard knocks." They know financial management matters; however they don't feel equipped to handle it.
Financial Benchmarking: A Critical Blind Spot
Only 17 percent used financial benchmarking to compare their operations with other farms. This means 83 percent are essentially making critical business decisions alone.
This is a massive missed opportunity. Educators, lenders, and consultants, please take note: financial benchmarking is essential for monitoring performance and adjusting business strategy, yet it's barely being utilized.
Marketing and Risk Management: Unprepared for Chaos
Average skill confidence: 5.9/10
Whether dealing with commodities, value-added products, or a combination, marketing and risk management strategies, planning and execution are critical in today's chaotic economic environment. Yet young farmers feel significantly underprepared.
Communication Skills: Room for Growth
Average self-assessment: 6.7/10
Communication weaknesses plague businesses of all sizes. The program addresses this head-on with DiSC personality assessments, which generated considerable discussion, banter, and self-analysis among participants.
Strategic Planning: 83 Percent Skip the Most Basic Business Tool
Only 17 percent had conducted a SWOT analysis or strategic planning before the class.
This fundamental business tool—assessing internal strengths and weaknesses alongside external opportunities and threats—is virtually unused by incoming participants. It's essential for critical thinking when starting new ventures or managing business transitions.
Closing the Skills Gap: What Actually Works
Here is the encouraging news: these skill gaps aren't insurmountable. They are exactly what the year-long program is designed to address. Participants get hands-on training in enterprise budgeting, cost of production, breakeven analysis, marketing and risk management and financial benchmarking, the core competencies that separate profitable farms from struggling ones. The program's final component is a transition management program, bringing together the older and younger generations in the farm. This unique program creates a bridge between classroom learning and real-world application that participants can take straight back to their operations.
Bridging the Gap
This self-assessment illustrates some of the gaps in the management mindset that can be learned over the one year program. Enterprise budgeting, cost of production, breakeven analysis, marketing and risk management, and financial benchmarking are all included in the curriculum. A transition management program with the older and younger generation in attendance at the same time concludes the course.
This is an example of how progressive organizations invest in the future of American agriculture to position themselves to be successful in a globally competitive environment. These vital programs represent strategic investments in the backbone of American agriculture. By empowering young producers with cutting-edge knowledge and industry connections, progressive organizations cultivate the innovative leadership needed to drive agriculture's success in an increasingly competitive global marketplace. These programs ensure the next generation is equipped not just to adapt, but to lead in that marketplace.