It’s Not That Simple – The Lie That Keeps Agriculture in Complacency

“What’s the biggest lie you were ever told? It’s not that simple.” – Miles Teller as Vinny Pazienza, Bleed for This 

Success is not that far away. We are constantly reminded of the hardships, limitations, and everything else standing in our way. The price of a new home, the lack of a stable job market, the cost of higher education. Many individuals today find solace in “living in the gap”. It is easier to tell everybody why we cannot achieve something than it is to go out and try to achieve it. Soft times create soft people; hard times create hard people.

In primary production agriculture, we are also told the same lie. Margins are too tight, land is too expensive, and the capital is too large. This trend, whether through social media or coffee row discussions, is slowly scaring away the next generations of entrepreneurs and farmers. We are blaming an industry for something that we are causing ourselves. Irony, where art thou?

 

The First-Generation Farm

“The truth is that if you just do the thing that they tell you you can’t, then it’s done; then you realize that it is that simple, and that it always was.” Miles Teller as Vinny Pazienza, Bleed for This 

At a panel discussion a few years back, a professor had asked her students to prepare a year-end thesis around how to buy out a small retiring farmer. A few days later, the students returned to the professor’s office and exclaimed, it was not possible. If that is your answer, then submit it. Will we pass? No.

There is a large misconception that to become a farmer, you need to start from scratch. Very few small businesses are expected to rise from the ashes without a strategy outside of just working hard. Banks will not fund the first-generation farm; it will be built through partnerships, collaborations, and networks. A large demographic of farmers is set to exit the industry over the next decade, and not all of them are looking for a sale. What an opportunity for collaborations, investment, and vendor financing deals. The truth that’s not being told, it is that simple.

 

The Growth Mindset

Whether you believe you can, or you believe you cannot, you are correct. In an environment where farms cannot afford to grow, many continue to expand. It may not be in acres, it may be in efficiencies, optimizations, revenue streams, or value-add. The problem is that the story of agricultural hardship has been told so many times that many today actually believe it. It has led to the largest issue in primary production today – complacency. 

You are the average of your five closest acquaintances – so you’d better make them good. Successful farms have one thing in common: they network and have relationships with other successful farms. In our business, we have always said we wanted to work with those who want to help themselves. When you read the word “successful”, the first thing that popped into your head is probably scale. But here’s the thing: success can be defined by your own definition. 

A growth mindset allows farm owners to see possibilities before they become opportunities. The whiteboard, sticky note, or dry-erase marker on the sprayer window has become their sanctuary. What efficiencies internally can I use to lower costs? Can I utilize current equipment to farm more acres? Are there other types of financing to buy land or infrastructure? These are questions creating solutions, not identification of more problems. The ability to grow is based on your ability to see the future, and it is that simple.

 

The Financial Risk

Business sustainability is based on its bottom line. The largest complaint today is margins and profit in farming. This is an education problem, not a numbers problem. Many farms today have minimal financial acumen. Instead of having an emotional response to this statement, use it as a challenge or goal.

Manage your costs based on your scale and ability to create margin. Risk mitigation not only affects your income statement but also your balance sheet. Sustain cash balances to ensure proper decision-making power. Don’t overleverage based on your assets or ability to make cash repayment. Too many focus on revenue as a leading indicator of success; this is why weather and markets are considered the top two risks to a farm. The actual risk of a farm enterprise is a lack of return on equity and its asset base. It’s just easier to blame non-controllables than internal management. 

You can choose what lies to believe in life. We can be victims, we can be heroes, or we can be somewhere in between. You can listen to the media tell you why you can’t, or you can listen to those ahead of you tell you why you can. Mindset is not something you inherit or that somebody else can give you. The person in control is the same in the mirror looking back at you.