Crops, Livestock

Characteristics of a Successful Producer

A new year often brings a sense of hope for new opportunities and bright beginnings. For many Nebraskans, the year 2019 brought many challenges and hardships so a new year is welcomed. Last month, the Farmers & Ranchers College conducted a program with Dr. David Kohl titled “Agriculture Today: It Is What It Is… What Should We Do About It”. He provided many insights on key economic indicators that will impact agriculture. What I also appreciate about his message is how he points out key characteristics of what makes a farm or ranch successful. Goal setting is so important and also so under-utilized. I’ve heard and presented the importance of goal setting for years and it was refreshing to hear him emphasize some key points. Dr. Kohl pointed out that 80% of Americans don’t have any goals and of those who have goals, 4% that have written goals obtain more money and success than others who do not write their goals down.

marketing school business idea
Photo by Gerd Altmann on

In any business, it is important to be proactive rather than reactive. Those who pre-market their grain are generally more successful than those who do not. Kohl mentioned that the culture of a workplace or farm is also important. Many leadership development speakers and researchers emphasize the importance of culture in the workplace. For example, in her book, Dare to Lead, Brene Brown points out the importance of a daring leader to cultivate a culture of belonging, inclusivity and diverse perspectives. She states that, “Only when diverse perspectives are included, respected and valued can we start to get a full picture of the world: who we serve, what they need and how to successfully met people where they are.” For years, Dr. Kohl has pointed out that farmers and ranchers need their own advisory board that involves people who will challenge you and differ from your thinking. If we only hear from people who always agree with us, you won’t be challenged to improve your operation.

With a passion for leadership development, I appreciated Dr. Kohl’s message that interpersonal skills will continue to be critically important. He also noted the importance of having a positive attitude and the need to invest as much in human capital as in technology. Effective communication and being able to interpret data with critical thinking skills are also critically important for the future generation.

Finally, I’ve leave you with a checklist of business IQ management factors and critical questions for crucial conversations that Dr. Kohl has created. In the checklist, the most successful producers have the following written down: cost of production, cost of production by enterprise, goals (business, family & personal), record keeping system, projected cash flow, financial sensitivity analysis and understanding financial ratios and break evens. Also, those who regularly work with an advisory team and lender have strong management skills. Successful producers have a marketing plan written and execute it, in addition to a risk management plan. Successful managers have modest lifestyle habits and a family living budget. Progressive businesses also have a written plan for improvement with strong people management, have a transition plan, attend educational seminars such as extension programs and also have a proactive attitude.

For more information about the next Farmers & Ranchers College program which will be the Cow/Calf College on January 28th go to

Crops, Livestock, Programming

Reflections from Dr. Kohl

Those of us in agriculture are no stranger to risks involved with agriculture that are taken every day, whether it is financial, production, legal, price/market or human resource risks.  While we can’t control everything, there are measures that can be taken to protect one’s operation and reduce risk. Each year the Farmers & Ranchers College hosts Dr. David Kohl, Professor Emeritus from Virginia Tech who does an excellent job describing global risks which affect us locally and how those risks will affect the agricultural industry.

Approximately 120 people gathered for the first Farmers & Ranchers College program for the 2017-2018 programming year.

Several points I’d like to share in this week’s column are what Dr. Kohl coins as the top 40% of proactive producers or “greenliners” and the bottom 30% of producers or “redliners” and his top twelve practices observed of successful farmers and ranchers.

Characteristics of the top producers include being proactive by challenging themselves to improve their operation in three areas. These producers also have a sound financial system which includes accrual adjustments, knowing their cost of production for each enterprise or even better, each field.  Sound financial systems also look at trend analysis and ensure the records are in a safe and secure place (backed up, protected from cyber-attacks and in a fireproof safe). Proactive producers also have lower rental and fertilizer costs, have a third-person audit their practices and practice modest living. Understanding that a family might have to make sacrifices and pass on that new boat or trip can cut costs drastically, as they rose during the “good times”.

Now let’s take a look at the bottom 30% of producers. These producers typically overpay on marginal resources such as land. They lack financial or marketing skills. Kohl pointed out that something as simple as making one’s own spreadsheets or utilizing a solid record-keeping system is crucial to monitoring one’s cost of production and recommends quarterly meetings with your lender.  “Redliners” often do not make necessary improvements in their operation to keep with the times such as replacing worn out equipment. In fact, when operations are transitioned to the next generation, if everything is rusted and wore out, that next generation’s chance of “making it” are significantly reduced. These producers need to manage taxes, not minimize taxes. These producers often have a high cost of living and lack the ‘HUT’ principle which is to Hear what others tell you, Understand what they are saying and Take Action.

College students who attended the program were tasked with asking someone for agricultural advice and Dr. Kohl had them report back to the group what they discovered.

Dr. Kohl also shared when he teaches producers strategies for success, he spends a large amount of time teaching about goal setting. Half the problem with businesses is that they don’t have WRITTEN goals. These should include business, family, personal, one and five-year goals. Balance in life is essential in every career, including farming and ranching. Making time for your spouse and other family members will prevent problems down the road. In addition to goals, he teaches producers to have a projected cash flow, break evens calculated, consider different “what-if” scenarios, updated balance sheets by Groundhog’s Day, develop a personal living budget and monitor your business with a lender or advisory team on a quarterly basis.

Dr. Kohl also provided the ten commandments of character. Character is often overlooked, but crucial to one’s integrity and success. His ten commandments of character included:

  1. Follow thru on commitments (educational program and financial statement requests).
  2. Use borrowed funds as agreed upon.
  3. Be accurate with financial statements such as balance sheets, income statement, etc.
  4. Have a willingness to sacrifice lifestyle pursuits and balance with business growth.
  5. Practice good communication of goals and in times when there are issues and challenges.
  6. There should be minimal surprise business purchases.
  7. Be willing to work with an advisory team, including a third party.
  8. Consider constructive coaching.
  9. Properly use profits, cash flows and windfalls.
  10. Utilize a network of people, peers and pursuits.

In summary, those who are unable to embrace change should open their minds and consider making changes. Kohl encouraged the college students in attendance to do an internship or take a job away from home to learn from others and bring fresh, new ideas back to the operation. He applauded those producers in attendance, as they are willing to learn and improve their business. When you graduate from high school or college, you are not done with learning and if you think you are, you will likely be left behind. This is where I’m proud to be a part of Nebraska Extension as we offer educational programs that provide research-based knowledge and our Nebraska On-Farm Research Network is a great avenue to test new practices, ideas or products.