When we lean across the decades for the adages and aphorisms that sum up the financial state of farming, we nearly always land on those that strap farmers into an economic corner ruled by everybody but the folks working the land.
It’s favorites like John F. Kennedy in 1959: “The farmer is, after all, the only man in our economy who has to buy everything he buys at inflated retail, sell everything he sells at depressed wholesale, and pay the freight both ways.”
Then there’s the less well-known Wendell Berry conclusion about why some choose to farm: “Why do farmers farm, given their economic adversities on top of the many frustrations and difficulties normal to farming? And always the answer is: ‘Love. They must do it for love.’ ”
And nearly always, people speak of farming as a profession only for optimists, a business built on hope and of character as the most desirable attribute of farmers. And I can agree with all of them. But what we must move toward is recognizing farmers as successful businesspeople, as business leaders, and see that as an admirable attribute.
I’m reminded of a story an ag editor shared many years ago. A new U-pick farm opened down the street from their Illinois home, and his wife wasted no time visiting to bring back a good haul of fresh vegetables. She excitedly reported on her visit and finished with, “And he doesn’t even care whether he makes any money!”
Whoa.
Yet many of us can tell similar stories of such educational conversations in our families. In this moment, when we’re at the most tenuous time for our core row crops in the U.S. — between planting and harvest, when a single storm can crush our financial plan for the year, and we’ve done the bulk of what we can to make this crop profitable — it’s good to take a moment to look at what we can do better to improve a farm’s economic outlook. Not hope. Not even prayer (though I don’t think it hurts). And certainly not throwing up our hands and quoting JFK.
Here’s what we can do: Find a few things we can do a percent or two better. No need to overhaul the operation. No need to dive deep into a new enterprise. Just solid steps toward saving a nickel here and making another nickel there. Nickels, of course, because we no longer deal in pennies.
Here are a few things to consider:
Precision management. Ohio farmer Chad Kemp is using variable-rate fertilizer to cut his costs by 25% to 30% while maintaining yield. That’s a profitable move regardless of the price of inputs.
In Mike Wilson’s article, Kemp speaks specifically to fertilizer, but using precision software to plant and apply pesticides is also an investment that quickly pays dividends. The three generations managing Babb Farms in Windsor, Va., can speak to those advantages.
The Babbs use John Deere RowCommand with Section Control and ExactApply on their planters and sprayers. Using less, well, saves more. While many farmers use precision applications for pesticides and fertilizer, the Babbs also closely meter their seeding rate.
“When I say I put 140 pounds to the acre, I put 140 pounds to the acre,” Bryan Babb said.
Multiple revenue streams. Agricultural business management specialist Dave Kohl sees across surveys and statistics that the sweet spot for farm financial success is three to six revenue streams. As we’ve written about that, farmers have asked: What counts as a revenue stream?
A revenue stream could be an additional crop. At Cardinal Farms in Indiana, Brooks and Brandon Cardinal grow watermelons at commercial quantities, a crop started by their father.
For the Babbs, the additional revenue streams include a field-to-shirt cotton T-shirt company and dog breeding.
That additional revenue stream can also simply be adding a higher premium to an existing crop. Indiana farmer Tom McKinney grows for seed, and the buyer also pays him to store that crop until delivery. The Babbs grow peanuts on a certified seed contract and added edible soybeans to their crop mix.
Marketing tools. Paying close attention to basis and using options to set floors while holding on to upside price opportunity also is essential. Markets are tough to navigate. But you — and any farmer still in business today — are tougher.
The bottom line is, of course, the bottom line. But that’s a business bottom line and a cultural bottom line. That cultural thing means changing up the axioms we hold closest to a few that lend the right attitude to the passion of our aptitude. Let’s switch to being price (profit) makers and leaning into faith in our financial abilities to accompany our well-grounded faith. Toward that end, what do you think about internalizing and prioritizing this axiom:
“Agriculture is our wisest pursuit, because it will, in the end, contribute most to real wealth, good morals and happiness.” — Thomas Jefferson