With fall harvest winding down in many areas, farmers have been vigilantly checking yield monitors (hopefully calibrated) and thinking about the next phase of field operations.
But talking with farmers, especially during the last few years about their cropping systems, more are steering the conversation toward other areas of their operation that have allowed them to maintain or increase overall profitability during an extended time of low corn and soybean prices.
This plays into the “CFO mindset” that Arlin Sorensen, founder of HTS Ag and speaker at the 2021 Precision Farming Dealer Summit, says farm managers are embracing as operations get more complex and diversified — with some looking to capitalize on revenue opportunities outside of their traditional row-crop operations.
He see precision dealers playing a critical role in getting farmers, especially those transitioning into management roles, equipped to strategically plan for and pursue lucrative endeavors. Dealers will have opportunities to evolve their business to provide what Sorensen views as “consultative” services for farm customers that extend beyond traditional parts and service.
“Farmers are going to be coming to us for more consulting advice, around strategic planning,” Sorensen says. “We’re seeing customers really managing the business from purely a numbers perspective. Finance is becoming a bigger part of their business strategy than their predecessors.”
Trent Sanderson, 32, farms in Clare, Ill., and recently talked about his farm’s commitment to transitioning acres to organic practices, along with a burgeoning pork and beef business.
He says they didn’t forward sell any grain this year until mid-October because there was no opportunity to have any kind of profitability for the rest of the year. They have a direct marketing business that they sell pork and beef direct to consumers, are transitioning acres to be certified organic and raise and sell cover crop seed.
“My goal is to maximize opportunity on the land that we own as quickly as I can. In order to reach that point, the only way I can see accomplishing that is to de-commoditize the farm. We’re doing that by getting away from just conventional corn and soybeans. It all takes a little more work and management, but so far, the net profitability is overwhelming.”
At this year’s National Strip-Tillage Conference, Osage, Iowa, strip-tiller Wayne Fredericks outlined several trending economic opportunities that he sees are viable options or at least influences on how farmers need to be diversifying their operations not only today, but in the future. Here are few direct thoughts he shared during his presentation.
1. Elevating the discussion on the value of carbon can affect land sales. “I talked to a realtor about this and he thinks in the next decade, we might be able to have a soil health score that can be part of the marketing of farm land,” Fredericks says. “This could reflect very well, economically, on these improved, more resilient farms and add some true value to that work and effort.”
2. Reimagining rental agreements. “Imagine if all of our landowners understood the value of carbon and soil organic matter,” Fredericks says. “The simple question that they would ask of their tenant would be, ‘Is the organic matter level going up or down on my farm?’ If it's going up, you're doing something right. If it's going down, we need to have a talk and maybe I need to be part of this.”
3. Broadening crop insurance discounts. “You can take two farms — a very resilient operation like ours with a 200 bushel actual production history (APH),” Fredericks says. “And you can take a fully conventional farm with a 200 bushel APH. And that bell curve, that conventional farm is going to be more of a risk for the crop insurance industry because those operations are less tolerant of events like drought or excessive moisture.”
According to the 2017 Census of Agriculture, the average age of all U.S. farm producers was 57.5 years, up about 1.2 years from 2012 data. With age comes experience, as producers averaged more than 21 years farming on their current operation.
So as the generational and experience transition takes shape on U.S. farms, prepare your customers and your dealership for understanding the opportunities that will emerge and how to best capitalize on them.