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How hard will you work this February?

Mark Andrew Junkin for Progressive Dairyman Published on 19 January 2016
Getting ready for 2016

Ask any athlete … what do you do during the off-season?

It’s the answer to that question that determines if they are a professional athlete or have a day job.

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It’s the same thing with farming.

There are many farmers who put their feet on the firebox as soon as the last piece of equipment is washed off and in the shed. Their winters are focused on snowmobiling and ski trips and, of course, a pilgrimage to the farm show.

Everyone will go into the shop and pretend to put in a few hours. But for many, after the first 100 hours of equipment maintenance, it is more of a get-away from screaming kids and a screaming wife than anything else.

But the question is: What are you going to do this winter? Seriously. What are you going to accomplish?

Are you going to put as many hours into making your farm profitable this February as you do in April? Are you going to spend 200-plus man-hours this February crunching numbers and cutting costs?

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You might have treated February as your winter holidays in the past. But prices just dropped, and you’re fighting for your life. This February you might have to change your habits and routines. In fact, this winter, you have to question why you do things the way you do. Across the board, commodity prices are going into the tank.

Whether you’re a dairyman or cash cropper, prices are starting to squeeze the margin. While markets seasonally have highs and lows, what happens if some economists are right and we are entering a new price range?

Are markets going to be low for the next five years? How long can you bleed cash flow? Wouldn’t it make sense to get your cost of production below today’s prices so that if market prices do rise, then you are making nothing but profit? If you go snowmobiling and bleed for another year, will you have enough cash to get yourself out of a bind?

Farmers in 2016 have to cut their costs of production. Many farmers would say that is impossible; they have cut as much as possible. But there is a farmer sitting up at night trying to figure out how to do it, and he will be the one to own his neighbor’s farm someday. In order to be a successful farmer, you’ve got to try harder, especially in the off-season, and be creative in order to figure out a strategic solution.

Being a successful farmer requires you to be able to overcome the impossible with nothing.

Recently, I met with a farmer in the morning and he said, “I can’t keep cash flow growing corn at $4, and I think that the price of corn is going to remain low for the next five years.” He had been given 1,000 acres after coming home to farm when his dad got cancer. He said, “I’m going to quit while I’m ahead.” He had encountered his first challenge and decided to give up. His ancestors would be rolling in their graves right now.

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Think about the pioneers who settled your farm. They came with nothing more than what they could fit into a wheelbarrow or a wagon. They probably came late in the season and didn’t know what they were doing, but when they got to the farm, there was no turning back. They either had to make it work or die.

They came with big dreams, but they had to realize that they were all alone and up the creek. There were no government bailouts then, and there was no cavalry coming over the hill to save them from Indian attacks. It’s just you alone that is going to make this work. They had to solve overwhelming problems to create what you have today.

For one generation, the challenge was a dustbowl, for others it was fighting Indians – and in the ’80s it was high interest rates. Frankly, I prefer sitting down with a spreadsheet for 200 hours to being shot at by natives.

The question you’ve got to ask is: Do you lack the resources or the resourcefulness? Are you going to farm like the neighbors? Or are you going to sit down with Google and question why you do things the way you do? Are you going to lock the door and get your family to brainstorm new ways of doing things until you’ve actually figured out how to produce milk for less than what the markets are paying?

Or are you just going to go to the coffee shop and complain about the prices like your neighbors? Are you going to be like an athlete with enough talent that he almost made it to the NFL – but didn’t because he didn’t do the work in the off-season?

What are you going to do this winter to get your cost of production lower? Are you going to be disciplined enough to not turn the key of your snowmobile until you’ve got this figured out?

Everyone is going to hit an unanticipated problem in their farm’s history. There are going to be things that will blindside you, no matter how good of a manager you are. It’s not a matter of if, but when. The issue isn’t when or why you are hit with a problem, but how you deal with it when it happens. What separates the boys from the men in farming? It isn’t your balance sheet, how hard you work or how much you know about agronomy.

When you think about it, it isn’t the size of farm you start off with, because there are many big players from the ’60s that aren’t around today. It’s your ability to deal with problems and turn them into opportunities. It’s your character, how you react to bad news and tough times, that brings out the best in you. It’s also about how you as a family come together to make and execute tough decisions in tough times. This winter, it’s about how your family questions everything you do now and rethinks how you do things until you’ve figured out a better way to do it.

For 2016, the challenge will be not how hard you work in April but how hard you work in February. How many hours will you work into the night trying to figure out how to make the farm pay? How will you evolve how your family makes decisions together so that everyone in the family can bring their best research, ideas and then make concise decisions together?

How can you win when other losers complain about losing? It’s all in your off-season program. Make the difference in your upcoming season today.  PD

Mark Andrew Junkin improves how farm families make decisions together in the years prior to farm succession. Get his book, Farming with Family: Ain’t Always Easy! at Agriculture Strategy or call at (800) 474-2057.

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