Frye: What needs to change in 2022 farm business plans?

In ag, and any other industry, it’s true that there are some people who seem to be more open to change and some who are less open. Some might even be downright against seemingly any change, even when the change might be helpful or provide an advantage for their operation. You might even have known some farmers like this during your career.

The truth is that change is hard for every single person. That’s why I believe the saying, “In order for change to happen, the pain of staying the same has to become greater than the pain of change,” is absolutely true. But why does it have to get to that point?

Feeling The Pain

Most people are inclined to keep doing the same thing the same way. It depends somewhat on your personality as far as how open you naturally are to make changes or try doing something differently.

When thinking about farm businesses, this can become a problem quickly. For some farmers, the answer to any question involving change might sound something like this: “Because we’ve always done it that way.”

But in today’s fast-paced ag world, continuing to do something simply because that’s the way it’s always been done isn’t sustainable and doesn’t keep your farm competitive.

Three Questions To Ask

1. What is this problem currently costing the farm? Try to quantify the problem numerically if possible in some way, both financially and in terms of production. Also try to quantity it in terms of additional time that’s being spent — as in employee hours, machine hours and so forth. Then list any “hidden” costs in terms of lost efficiency, reduced morale, lost opportunity and so on.

2. What are potential solutions to this problem that our farm hasn’t tried yet? If you’ve already tried any solutions, list those out plus why they didn’t work. Then try to go beyond what’s already been tried and brainstorm new possible solutions. Try to get way “out there” in terms of ideas.

3. What’s the downside if we try something new and it doesn’t work out? This is about letting yourself consider the worst case scenario of a possible change. For a smaller change, the downsides are probably not that large. That might be a good place to start if your operation isn’t typically changing things. Looking at the worst case can help remove some of the anxiety and uncertainty that change can bring up.

Think Now About 2022

Many farmers feel they need the current crop year’s results in hand — both production-wise and financially — before they can look at plans for the next year. But it’s a key mental pivot to make because you can really lose out on key opportunities if you aren’t looking a little further ahead than most farmers.

• Put on the CEO hat. Set aside a few hours to take off the “production expert” hat. During that time, focus on the business side of your operation. Whether or not you have full results from harvest yet, start looking at the current key financial metrics of your operation and use them as a springboard to start getting into financial plans for 2022.

• Do some scenario planning. You can do this on your own or with your financial adviser. Start creating different scenarios for the 2022 crop year and 2022 marketing plans. Work to consider some of the various ways that the market and ag environment could shift and how that would impact your operation from a financial standpoint.

Market Changes

On the farm, an aspect that many farmers find can be difficult to bring change to is around their marketing strategy. Often, farmers find themselves doing the same thing each year in their marketing, and that might work out sometimes — or it might not.

A tailored marketing plan that’s flexible with market moves is key. Our market advisers partner with and bring education around different marketing tools. They help farmer clients with planning and execution around marketing decisions.

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