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Issue 23 |
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Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, South Dakota Wheat, Inc. and the Minnesota Barley Growers Assocation. |
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Copyright Prairie |
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Management a determining factor in weathering the storm By Craig A. Rice, Regional Director During the 1980's, I worked for the Federal Deposit Insurance Corporation (FDIC) as a bank liquidator. I was in
charge of liquidating FDIC insured banks that failed in Minnesota and the Dakotas. It was a difficult time for the communities and customers of the failed banks, and for me, a thankless job. Most of
the failed banks were farm banks, as you might imagine. Too much debt and high interest rates, followed by a steep slide in land prices, were the main culprits pointed to by the experts of the time.
During the 1990's, I and many others spent time trying to understand why some farm banks in a county failed and others (often just across the street) did not. We did so with the hope of finding answers to prevent it
from happening again. Similar studies examined what made some farmers survivors and others statistics. After all, all the banks and farmers were operating in the same environment, so something must
have differentiated the winners from the losers. While the results of the studies were far from conclusive, most indications pointed to management as the determining factor. The bankers who understood and paid
attention to the details of their business weathered the storm and sometimes thrived, while those who did not failed. Just like the bankers, the farmers who better understood and managed all aspects of
their business were also far more likely to survive. The survivors produced more at less cost and knew better how to market what they grew. I think in today's difficult and trying conditions, the
same will hold true. Among today's challenges is an ever-increasing free market environment. Wild price fluctuations and increased competition in the world market without the government safety net is a
reality you must face. While production remains an important issue to manage, how you market your crops is now every bit as important. Your survival in the new millennium is contingent in large
part on your ability to take emotion out of marketing decisions and replace the emotion with a comprehensive marketing plan tailored to your operation. Besides valuable information contained in this publication,
please take the time to visit the National Ag Risk Education Library at
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