Changing Tides – Where Acres and Diversification Diverge
“Insanity: doing the same thing over and over again and expecting different results” – Albert Einstein
Farming without scale is unsustainable.
Primary producers, in their truest form, are no longer viable within the current environment. Whether it comes down to markets, competition, costs, or just succession, the family farm cannot remain complacent.
This sentiment was at the forefront of the last round of coaching courses we put on; the tides are changing, and the need for diversification and change is here.
Lamborghini Was a Tractor Company
We blame government, we blame consolidation, we blame geopolitics. When do we look in the mirror for who to blame?
No business, outside of agriculture, lives and dies on complacency. If this were true, we would never have the multinational companies of today like Amazon, Walmart, or John Deere. All of these businesses had to pivot in a changing market.
In fact, watching John Deere shift from equipment to technology is a master class in how to survive in a high-competition. So why does farming believe it is different?
My youngest years were spent on an open tractor. From there, it shifted to cabs, then air conditioning, then autosteer, and now massaging seats with fridges. However, one thing that never pivoted was the farmer. We consistently grew the same grains with the same inputs with the same strategy, year over year. There are not many other industries that have not made large strategy changes since I was born. The time has come for agriculture.
To expand on the Lamborghini example above: Samsung was a grocery store, LG was a facial cream, and IKEA was a pen. These are all billion-dollar companies that were forced to change due to the economy and environment. If we look at agriculture today, we need to focus on change, not hoping that land prices drop or the next war fixes our commodity markets. Even better, quit assuming that things will become cheaper. We keep printing money; inflation is real.
The Top Farm Mindsets
We already waste a large percentage of the food we produce. Customers are already forcing change in the inputs we use and the regulations we face. What do we do when growing more grain does not create more profit? I would argue that most farms saw this in 2025 with record yields and below-average returns.
The top farms are blowing open the box. Look around today, what do you see?
- Agriculture Production Diversification – Grain farms are moving into produce, cattle, supply management, custom work, and pedigreed seed, just to name a few. As producers, we know our industry better than others; many will be more comfortable getting out of the commercial grain box but staying within the industry itself. These are all ways to reduce risk, find alternative revenue streams, and possibly lower your costs by using your current equipment over new ventures.
- Agriculture Non-Production Diversification – You are currently reading a non-production diversification for Hebert Grain Ventures. We had multiple business-minded individuals on staff. Why not start a consulting, coaching, and public relations business? Low capital contribution, high margin returns that can mitigate risk in the farming enterprise with steady cash flow. I have also seen agronomy businesses on the farm, mechanic and repair businesses, electrical and construction businesses. What abilities and skillsets do your current workforce have?
Maybe the answer is integration and not a full-scale revenue change. Can you move up or down the food chain in terms of retail, manufacturing, value-add, or direct sales? This seems to always require higher capital or networks, but I also know many farms that have been able to reduce the steps in the vertical chain.
The Rest of the Story
To those who disagree, I say, continue at the current pace. Just answer the following questions before you fully write off the argument as nonsense.
- What happens when your landlords have no tie to the land and the land is worth more than any other investment they own?
- What happens when glyphosate is on the no-usage list and fertilizer reduction is required to meet government requirements?
- What happens when margins become so limited that scale is the only answer to profitability, and you don’t have enough scale to actually grow?
All of these issues are real, and all of these are less than a decade out. I have heard farmers say we have always had new risks and we have always survived. I don’t disagree, but surviving and thriving are two different scenarios.
Agriculture will have some large decisions to make in the near future. I have met with hundreds of farmers who are fearful of the future and who don’t see sustainability in acres being feasible. The part that I haven’t seen enough of is those who have come up with or are trying to facilitate a plan.
To use a quote I have used before, but that fits well with the changing tide metaphor. “Only when the tide goes out do we see who has been swimming naked.” Thank you, Warren Buffett, for the classic.
