Engaging young producers in agriculture is increasingly more important. At a recent program by the Farmers & Ranchers College which hosted Dr. David Kohl, Professor Emeritus from Virginia Tech he provided some great strategies for millennials wanting to return to the farm which I’ve decided to summarize in this week’s column. For a young couple, each person should first sit down and write down their personal, business, health and other pertinent goals. Goals should be written for short term (one year) and mid to long term goals (5-10 year). Then the couple should examine to ensure they have somewhat similar goals or understand where each person is coming from.
Then, as should any couple they should get their financials together, see how they compare with others and set benchmarks how to improve. Involve lenders and a team to function as an advisory board. Secondly, a couple should make critical decisions based on their financials and areas to cut costs. An advisory team made up of lenders, suppliers, consultants, etc. should challenge producers to improve efficiency, think outside the box and remain resilient in the future. Young producers should also have a conversation with the older generation(s) about their goals and where the younger couple will fit in the operation. Young producers also benefit greatly by leaving the farm for a few years to see different things and gain insight on new practices, etc.
Kohl also said, “Social media can make or break you.” Social media can provide a lot of misinformation so it is important to be on those social media platforms to know what misinformation is being communicated to the general public, provide the correct information and always be proactive with educating people about agriculture.
In conclusion, Kohl had some rules of thumb for all producers that will thrive even when commodity prices are low. Those characteristics of successful producers include:
- Having a strong, productive asset base
- Have records that talk to the business
- Maintain a modest living expense (even in good times)
- Maintain modest non-farm capital expenses.
- Have a working capital (33% of revenue)
- Have a burn rate of working capital above 3.5 years
- Know cost of production via enterprise.
- Have a clear strategy and alternatives when needed.
- Work with those who have a history of handling adversity.
Other points to note when working through turbulent times are to focus on efficiency first, growth second. Know personality styles of those in your operation and respect those differences. Align yourself with a positive set of people. Document costs and keep records.
For more information from Dr. Kohl, you can go to his columns on cornandsoybeandigest.com.
Best wishes to you and your family during the Holiday season!