Farm Business Management Skills

Heather Moffatt, Grain Risk Management Advisor; Agricultural Marketing First

Through our farm careers most of us have associated with farmers whom we call mentors. Mentors are those we consider to be successful in their chosen field. All of us view success differently. Perhaps our mentor has a "picture perfect" farm with fields that never have weeds and rows planted perfectly straight. They may be early adapters using the latest technology. Their equipment is kept immaculate and well maintained. These production characteristics are important and send a clear message of success. Less noticed and talked about are those farmers who have captured business management skills. It's these skills that enable them to achieve and ensure long-term success. These management skills encompass production, purchasing inputs/selling production, financial and personnel management, strategic positioning, leadership and risk management. Are you poised and ready to move forward using a well established business plan? The following will help you explore where your focus should lie in a thought provoking manner.

Production managers constantly strive to keep cost of production as tightly controlled as possible.

Risk is a very real part of farming. Fortunately we have various tools to transfer price risk to others. Purchasing crop insurance can insure against variations in crop yields. Using forward contracts, futures contracts or options on futures to transfer price risk to others can avert price risk. Those who best manage risk associated within their day-to-day farm business also manage such risks as insurance (life, liability, crop); they
develop contingency plans, and manage price risk through offsetting paper contracts.

Risk Management Checklist:

Strong leadership is also an integral part of farm management. Leaders are early adaptors. Relationship building is important to the farm manager. Even if your farm organization does not require staff, strong leadership is important for success in the agricultural industry. As a leader in your field, you must be able to successfully put plans into action. Continue to develop and pursue personal and professional growth through education. Articulate your vision of the farm business and take control of the future rather than resist change. Create short term and long term plans and contemplate the risk and rewards. As a strong leader you are also a strong motivator to employees, co-workers, and business associates.

Qualities of a Strong Business Leader:

Strategic positioning is also important to farm success. It might be pertinent to reassess your farm focus. Should your production focus change to include different products? Diversity is becoming almost mandatory to spread out production risk. Should you be involved in direct marketing of your product? What future opportunities are available? Are there niche market opportunities you could tap into? Agriculture is quickly changing. Ask yourself if your farm focus should be reassessed to ensure success. Look for undiscovered business opportunities and take advantage of emerging market potential. A strategic plan focuses on vision.

Strong Strategic Positioning Skills Include:

The busy season is almost upon us. Take a few minutes to explore your leadership qualities; look at your strategic and risk management plans. Fine-tuning these qualities will ensure long-term viability of your successful farm business.