Have you ever heard someone say that today’s business environment is “the new normal”? There is no such thing as the new normal. Most times the “old normal” is the reality in the long run.
Remember when corn was $7.50 and canola was $15 and it was a “new normal” in the markets? We’ve recently discovered that the “new normal” has been cut in half.
In business and in agriculture, there’s wisdom to be gleaned from our older family members. Grandpa may be gone or not active on the farm anymore but your grandparents’ wisdom should never be forgotten. The Real Agriculture editorial team sat down for a cup of coffee and created this list of Grandpa’s Keys to Farming Success that are still viable today. If you have more, please share them with us in the comment section.
- What goes up must come down – Many farmers in the Corn Belt are dealing with 5-year rent contracts that were signed in a time of $7 corn and not $3.50 corn. Ouch, that hurts the income statement. Some farmers have loaded up on flashy new equipment based on higher commodity prices, but are now paying for it with lower prices. That’s putting the squeeze on some farmers. Experienced farmers will tell you that any farmer younger than 35 has never seen REAL hard times. Everything goes in cycles, and so what goes up, must also come down.
- Land is the best investment you can make – Farmers love the land and Grandpa knew best with his advice on investing earnings in more. Of course land prices plummeted in the 80s and that may happen again (see point 1) but over the past 30 years, investing in land has proved to be a very financially successful strategy for farmers across North America.
- Hard work pays the bills – Working smarter may sound smart but much farm success has been built on good old back-breaking work and putting in the long hours. Even for the softer jobs on the farm, good strong hard work will take you a long ways. If you get up early every day and out-work other people, you increase your probability of winning (being successful) in the end.
- Don’t keep up with the Jones’s — ignore them – Getting wrapped up in what your neighbors are doing can be a fatal distraction for any farm. Whether it’s making sure you have the latest pickup, the cleanest field, the most acres bought in the winter or the longest all-inclusive vacation, trying to appear to others that you are successful likely means that you are not actually working on being successful.
- It’s okay to start off poor – Younger generations tend to want to start with the standard of living and farming that grandpa and grandma spent many decades working towards. While it doesn’t make sense to try farming today with an old 12 horsepower Model H, there’s value in learning to appreciate the blood, sweat and tears that went into getting a farm to where it is today. And nothing drives innovation on a farm like tough times.
What did we miss? Or are we out to lunch? Leave your thoughts in the comments!
Feedback from Twitter:
@realag_lyndsey Add: keep debt under control/have a nest egg. Farmers go under bc cycles (climate, economy) swing. Cash reserves critical.
— Merle Massie (@merlemassie) March 2, 2015
@realag_lyndsey "you won't go broke taking a profit"
— Keith (@skjdfarmer) March 2, 2015