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Taking farm management to the next level – Part 1

For better results: know your own decision-making style and risk tolerance level

Field mapping with agronomic data and yield data will help you make better cropping decisions for the coming year.

Every year is a learning year in the agriculture sector. The trick is to take the lessons learned and turn them into actions.

Your success may be production-based, profit-based, financial, or managerial — as in improving the way you monitor your farm’s performance. Or, your success may be becoming a more sustainable and safe business.

Over the past few years, we’ve seen some unusually hard harvests that left grain out in the fields. I’ve have seen a marked difference in the struggles that farmers have faced.

You would think the struggle would be worse for those with the most grain left in the field until spring, but in fact, those that struggled the most were the ones who harvested their grain but then struggled to manage the quality and took heavy losses due to spoilage. Those with grain in the fields weren’t having the best of times, but if they were able to manage their quality, between sales revenues and insurance they had their costs covered.

In hard years, those who follow higher-level management practices set themselves apart from those who don’t. This becomes evident when you look at bottom line per-acre returns.

Higher-level management starts with basic tasks, such as taking the numbers you jotted down in your pocket field book and putting them into a management software program so that they can be used for decision-making. Or tracking expenses such as fuel as a total cost of operations, but also on a per-unit basis, so you can calculate operating costs for each piece of equipment.

Field mapping with agronomic data and yield data will help you make better cropping decisions for the coming year. Financial indicators can help you analyze your farm’s financial health, which will help you make better capital investment decisions.

Making tough decisions

Everyone makes decisions differently. This is due to individual personality types and risk styles — characteristics that can be changed through learning and practice.

Personalities range from aggressive to passive. Risk tolerance levels can range from daredevils to avoiders. There are tests you take to help you understand your personality type and risk tolerance level. It is interesting to have family members complete these tests separately and then come together for discussion. This helps people see why they don’t always agree with others when decisions are made on the farm.

Look at the personalities of the people currently making decisions on the farm. Maybe some aren’t comfortable stepping outside of their risk tolerance level. Can you help them get beyond that roadblock? I have seen this with farm clients. There is often someone else within the business with the opposite personality. I suggest that those two people discuss decisions and make them together. Both parties can expand their risk tolerance levels and take their game to the next level.

If the two parties can’t get along, it’s best to bring in a third party with a more neutral personality and moderate risk tolerance. This person can act as an arbitrator and help the others learn how to better communicate and compromise, which is hard for some aggressive daredevils!

Seven key practices

I’ve previously mentioned Farm Management Canada’s research and its findings of seven key farm business practices that top farm managers use. These seven practices are:

  1. Ongoing skills development, lifelong learning.
  2. Make business using accurate financial data.
  3. Seek the help of business advisors/consultants.
  4. Have a written business plan, review it annually.
  5. Know your cost of production and what it means for your profits.
  6. Assess risks and have a plan to manage and mitigate risk.
  7. Use a budget and financial plan to monitor your financial position and options.

About the author


Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.



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