What do some of the smartest, biggest farmers in the country think are the major challenges in farming today?
Each January Farm Futures invites top agribusiness officials, along with a hand-picked group of farmers, to meet in one-on-one sessions to share what’s coming in their company pipeline, while producers consider how those products or services might fit with their business.
Between these sessions we sat down with the operators to find out what keeps them awake at night. Here’s a sample of what we heard:
Cost-control is harder than it looks. According to USDA, production costs in 2017 were about the same as they were in 2016. And the idea of ‘just lowering cash rents’ isn’t so simple.
“If you want to run a larger number of acres to stay efficient, you will likely be subsidizing some of your cash rent margins with the healthier margins from owned land,” one farmer told us. “Landowners perceive that you have money, and they want some of it.”
Labor quality, availability, is becoming a big issue. Some people have success with H2A workers from South Africa, but if you work through a broker it’s highly regulated, and if you are investigated by the Department of Labor, you are guilty before proven innocent, complained one farmer.
Many farmers in our roundtable offer salary and bonuses; some offer 401K and s stipend to pay for insurance. They talked about the non-cash benefits like housing, a side of beef for the freezer, or opportunities to partner with each other on side businesses.
When you find good employees, you find creative ways to keep them.
“Maybe you co-sign with an employee on buying ground so he’s got skin in the game, and you rent out his tractor because you don’t want to or need to buy another tractor,” said one farmer.
“Sometimes it’s not how much they make,” one farmer told us. “I couldn’t understand why one employee was unhappy despite a good salary, then I found out he doesn’t have time to spend with his family.” Sometimes employees are too intimidated to ask for time off to see their kid’s ballgame.
“The ability for that employee to approach us – we think it’s easy, but it’s not the case,” said one farmer. “We put a white board up and if you have a ball game to go to, put it up there. I just need a few days’ notice so I can make plans around you.”
They don’t want to lose the farm policy safety net. Farmers want a lower regulatory burden, but they want to keep government-subsidized crop insurance. Some guys said they’d love to see the government get out of farming altogether. “Leave us alone for a while,” one said.
Nearly half the farmers said they wouldn’t need a farm bill, provided regulations went away, as promised, by the Trump administration. The one caveat: keep crop insurance
“It’s a great risk protection tool, available to everyone, and you can pick how much coverage you want,” said one farmer. “The government gave us the ability to buy up. I do like the subsidy we have in crop insurance.”
The farmers also admitted to an oft-heard criticism of federal-subsidized crop insurance: inflated land values.
‘Land values have stayed up because crop insurance makes farming much less risky,” said one farmer. “There are guys in our neighborhood who should not be farming. Those guys are in business because of crop insurance.”
They worry about bringing kids into the business. “Make sure your kid wants to do it, because if they don’t, it won’t work,” said one farmer. “Second, give kids responsibilities. I’ve watched so many operations where the father won’t give up control. I see 60-year-olds and their 40-year-old kids who have never balanced a checkbook or ordered seed. Last year we had an operator who had a heart attack and his kids had no idea what to do.”
Let your kids fail, advised another. “We don’t want them to crash and burn, but if they don’t make some mistakes, they’ll never learn.”
So, after reading this…what keeps you up at night? @mwilson1977
The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.