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I am one good
crop year away from quitting my job. Or at least that is what I tell myself every year. Just one good crop year and I am going to stay home and focus on getting the little rug rats to school and all their
extracurricular activities, finally get the farm office cleaned up and organized, file away the farm receipts from 2003 and on and on. The list is long, and it keeps getting longer every year. If only we could have
that one good farm year, I will quit my job and all my plans will finally be put into action.
I am slowly coming to the realization that my plan is a joke. I am never going to quit my job, regardless of how good the farming
year is. I will stick with my job, not because I need the paycheck, but because I need the responsibilities of being a farm management instructor. I need you guys to keep me honest. Without your phone calls, e-mails
and questions I would never pay attention to the markets. When the farm analysis season begins, my farm is the first one I analyze because it is good practice before I venture out to your farm. I focus on marketing
and farm management on my farm not because I want to, but because my job as a farm management instructor requires it.
That sounds kind of foolish. Your job as a farmer requires you to focus on marketing and management as well. Why do I prioritize a
job just because every two weeks this mysterious lump of cash is deposited into my checkbook and I get a health insurance card in the mail once a year? One good wheat marketing decision could make me more money than
my salary, but it is tough to remember that.
If I have problems prioritizing marketing and management on my farm, what about the rest of you? How you even remember to balance a
checkbook is beyond me. Congratulations if you have remembered to forward contract some wheat for 2009, or if you have made your loan payments on time. I have never met a farmer who did not put “crop production” at
the top of their to-do list, but you have been able to work your way down the list and complete some marketing and management tasks.
While congratulations are in order, most farmers have room for improvement, and you know it. When I call a farmer to set up an
appointment, the first question they ask is “Do I need to update my checkbook?” What happens if I don’t call for an appointment? How long does the checkbook remain unbalanced?
I don’t think I am telling you anything new. You know you need to do a better job of being a farm manager, and the only way to
accomplish that is to add it to your “to-do” list. There will always be tractors that need to be greased, or bins that need cleaning, but you need to find time to develop a marketing plan, or update the balance
sheet.
If you do not have a farm management instructor to track you down and hold your feet to the management fire, you have to set some
minimums. Here are just a few ideas to get your started.
First on the list is to read, listen to, or watch some market commentary every day, and preferably not the same author
or source. Watch a TV show on Monday, read a professional advisor on Tuesday, page through a magazine on Wednesday, listen to farm network on Thursday, and get your weekly newsletter each Friday. You can get text
messages of commodity prices to your cell phone, but you need to read commentary to remind you of upcoming USDA reports, announcements from major importing countries, or changing weather forecasts. You may also want
to read a technical trader who looks at charts for pricing decisions. I have a combination of all of these products, and I do not access all of them every day, but I do grab at least one per day.
Second on the list is an end of the year review, which can be done anytime after harvest, but before you start making major plans for
the next crop year. As I work with farmers on their review and conduct my own, I am always amazed at how much is learned. It is important to step back and review where money was spent and earned and how much was
actually spent and earned in each category such as interest expense and repairs. One of my colleagues takes the top five expense categories, and trims five percent off each. It might not sound like much, but it is a
good reminder that penny pinching does pay.
Third on the list is to remain in contact with your elevator manager. Are they getting any trains? How about discounts? These things
usually are not on a website, but talking with the manager can help you stay on top of cash grain marketing. Signing a futures fix contract is just the beginning of crop marketing, and you need to finish the job
with delivering the cash grain.
Finally, if you do rely on others for your marketing and management decisions, remember you are the boss. Double check the work! You
give specific instructions to the guy who drives grain cart every harvest, but you never bother to make sure your bookkeeper has paid all the bills correctly, or your marketing advisor is actually selling grain. I
work with many farmers who use external help for management, but numbers need to be double checked. Everyone makes mistakes, and a second set of eyes can help find those mistakes. A second check also insures your
needs are known, whether it is correctly categorizing a combination chemical, fuel, fertilizer bill, or getting enough grain sold for harvest delivery. You are the boss, and make sure all employees, whether hourly,
salaried, or contracted, are doing the job you want them to do.
I can find a million other things I would rather do than balance the farm checkbook, but somehow I manage to grit my teeth and get it
done. I would rather read the latest fictional book on the best seller list than the latest farm magazine, but I know which one will make me a better crop marketer. It may be shocking to hear that a farm management
instructor does not enjoy balancing a checkbook or watching the markets all day, but it is true. I consider it a necessary task if the farm is to be successful. I have a scary, hard-nosed, intimidating boss who
makes me do all these things for other farmers as part of my job. So I get it done under threat of life and limb, and more importantly, paycheck and benefits. If you don’t have that same boss, you have to find your
own motivation for getting things done. Hopefully profitability is enough of a motivator.
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