Young Farmer Perspectives from FreshRoots Forums
April 1, 2020
As a national speaker, educator, and writer, I often observe and am involved in many cutting-edge programs for young and beginning agriculture producers. Analogous to cream in the milk bottle, one program rising to the top is Farm Credit Illinois’ visionary FreshRoots program. This year, I had the opportunity to facilitate two panels of the creme de la creme of more than 900 individuals who received financial, educational, and mentoring assistance in this stellar opportunity. The following are just a few of the nuggets the Directors Cup award recipient panelists bestowed on the engaged audiences in Champaign-Urbana and Collinsville.
Better is better principle
One common point many panelists expounded upon was constantly attempting to make the business more efficient or better. Some pursued agronomy and land practices to make a short-term capital investment into a long-term profit. Tiling, water management, and soil health practices to boost yields and generate higher quality output were mentioned. These management practices often lead to the dollars and cents that produce higher margins that competitors down the road failed to prioritize.
Monitor financial management
Another benefit of the FreshRoots program is participants becoming better financial managers. Generating year-over-year balance sheets and developing and monitoring projected cash flows were frequently mentioned as best practices. Some of the panelists seek input from their lenders and, in some cases, the results are compared to peer benchmarks. One panelist monitors a financial dashboard of key performance indicators (KPIs), similar to gauges on a tractor or combine. Another panelist indicated that confidence in understanding the financials is critical in the family business transition and overall communication with family and non-family members alike.
I was impressed that the panelists developed and followed family living budgets in an attempt to grow the business through prudent spending habits. Some enjoyed the financial support of spouses, while others had side gigs to diversify their revenue sources.
Communication is an attribute all panelists agreed is critical for business success. One panelist shared his financials with landlords during cash rent negotiations. Another participant uses enterprise analysis on each farm to determine which properties to continue or drop from the operational plan. Another uses precision agriculture and technology to update landlords – some in distant urban locations – on soil health and natural resource management.
One commonality amongst the panelists is renting and leasing land. Often young producers between the ages of 20-35 will position themselves to acquire land when they reach 35-60 years. Positioning for economic and weather changes in commodity cycles with sound fundamental practices is a proactive strategy for success.
Goals guide marketing
Another attribute discussed was the importance of marketing and risk management. Developing a written strategic plan with goals and priorities in mind is critical. Some indicated the execution and monitoring of the results with a sound understanding of break-even points and the cost of money is a requirement in today's agricultural climate. I smiled as the panelists recited their cost of production metrics.
Some panelists are investing in parts of the business to capitalize on niche markets, such as organic or specialty crops. Having a diversification plan is critical for success.
For most of the panelists, the senior generation was supportive of the young farmers’ business strategies. Communication was prioritized, allowing all generations to ask critical questions for crucial conversations.
There were many other points and perspectives shared by the progressive panelists that are too numerous to mention. However, one encouraging aspect of the meeting was the engagement and networking by young farmer meeting participants, which was also observed by Dr. Ron Hanson, professor emeritus of agricultural economics at the University of Nebraska. The investment made by this visionary cooperative in the FreshRoots program is providing a foundation for success for the 2020s and beyond.