It seems like nearly every meeting and many conversations in farm country eventually work around to the question, how can I remain successful and continue farming?
As in the past, the scales are tipped in the favor of the efficient producer and solid marketer. How do Kansas farmers know where they weigh in on that scale?
Today’s efficient producers are low cost-per-unit farmers. They achieve those low costs by producing high yields – bushels per acre, pound of gain per head, pigs per litter or milk per cow.
The other half of the equation consists of holding down costs. That means securing low costs per bushel, per hundred-weight of cattle produced or per hundred-weight of milk produced.
Finding out where you stand on the production efficiency spectrum calls for comparing your production costs to some performance yardsticks. Such indicators can be state averages for similar size and type farmers. Better yet, compare your actual performance to goals you’ve set for yourself.
Solid marketers receive higher prices for commodities they sell. These prices can be higher than your neighbors, higher than similar size and type farmers or higher than your goals.
Determining where you stand on these performance measures call for keeping and analyzing records. This cannot be considered a chore today. If you are facing challenges, examining such records is the best way to help you out of a fix.
While visiting with farmers, stockmen and a farm appraiser at a recent meeting, all agreed they kept concise, comprehensive records. Gone are the days when farmers skated by with few records other than check stubs. Lack of record keeping has a direct correlation with failure in farm country.
As the appraiser said, "You have to know where you are before you can chart a course to move where you want to be."
Record analysis can help you do both.
The farmer or businessman who does not have solid production marketing or financial management skills faces several tough questions.
How well or bad off are you?
Your analysis will tell.
Do you have a large equity base to hold your operation together while you develop those skills?
What changes can you make to improve your farm performance? What will it take to make them? Are you willing and do you have the resources to make those changes?
The swift do not always win the race.
The strong do not always win the battle, but that’s the way to bet.
In farming the smart money is on those with the best production and business skills.
John Schlageck is a leading commentator on agriculture and rural Kansas. Born and raised on a diversified farm in northwestern Kansas, his writing reflects a lifetime of experience, knowledge and passion.