Recently, I was sent a newsletter from a local grain buyer titled “Seven Ways to Streamline Your Farm Marketing.” The author highlighted several tips to overhaul your thinking when it comes to grain marketing. The goal was to ease the overwhelm that many feel when it comes to marketing their grain.

As an advisor, I agreed with all of the tips. As a coach, it struck me how much the list paralleled transition planning work — an area where many feel overwhelmed as well. For each marketing tip listed, I came up with a similar piece of advice for transition planning.

The first: “focus on profit, not price.” In other words, price is only one piece of the puzzle when it comes to profit. Your focus should be on the whole picture — on achieving a specific profit margin, not just a specific price. As an advisor, I think that’s good advice. As a coach, I also think it’s good advice. Consider a family farm owner who focuses primarily on getting the business to the next generation but doesn’t give much attention to creating a healthy business culture. It’s a good primary focus but shouldn’t be the only area that gets attention. A healthy business culture will create next-generation family members who want to be involved instead of getting burned out and leaving. Shifting some focus toward the culture on your farm will pay dividends down the road.

The second tip: “commit to planning.” The author explained how using your historical yields and tracking your costs will help answer key questions regarding profit margin, how much to sell, when to sell and at what price. As an advisor, I like this tip. We all know expecting our plans to be followed exactly is foolish but that doesn’t mean making plans is. As a coach I’d say the same thing. Make a plan for the future of your farm business. Where do you want to be in a few years? Ten years? What are your family members planning for their futures? How are you planning to transition ownership of your business to the next generation?

And just like making a marketing plan, succession plans can go out the window at any moment. But that doesn’t matter, because the real value of committing to a plan is that it creates conversation and gets everyone on the same page. So many farm families never talk about their plans, then when the unexpected happens chaos ensues and family farms die.

Forward progress

Tip number three was to “establish a reasonable desired profit.” Every farmer would love to sell their canola at $28/bu. and walk away with a $650/acre profit. While that price was available just a few years ago — and $28 for canola is probably once in a lifetime — it wouldn’t be reasonable to plan a budget with a selling price that high.

The parallel advice for succession planning would be to make a reasonable amount of progress each year. Succession doesn’t have to happen overnight but it does need to happen. It’s difficult, tedious work that is often complex and awkward — but if you don’t schedule that meeting, nobody will. Issues that could be solved in a few conversations can drag on for years because they get booted to the bottom of the priority list. Set some realistic goals and make forward progress.

The fourth tip on the list was to “sell meaningful amounts.” In other words, you must sell all your inventory to make a profit. That’s a no-brainer, isn’t it? Keeping grain in the bin forever won’t generate any money.

My corresponding advice for this one is to make your business more meaningful. What are your core values and how can you align your actions with those values? Cultivate deep and authentic relationships and find purpose in something larger than yourself. Practice living in the moment while acknowledging and appreciating the good things in your life.

Number five: “expose yourself to the market.” The author explains how there are resources or tools available that can help you reach your profit margin goals — resources such as hedging, target contracts and futures-only or basis-only contracts. Another resource would be a grain marketing advisor like myself, wink wink.

You also need to “expose yourself to the market” when working through a succession plan. Accountants, lawyers, investment/financial advisors and communication/conflict coaches are commonly part of the team of professionals that assist farm families. You are not alone; ask for help when you need it.

The sixth tip on the list was to “understand crop insurance.” Farming is a risky venture and knowing how crop insurance works can reduce your risk and protect your revenue. Most of you use crop insurance — you don’t have to farm for long before counting on it to cover poor weather.

Insurance is also important for your succession plan. Sometimes that can look like a life insurance tool that is used to transfer equity to a non-farming sibling. Sometimes insurance can be in the form of inter-spousal agreements or unanimous shareholder agreements that work to protect the longevity of your farm business. Another form of insurance is to write down all your verbal agreements and have them notarized by a lawyer.

The final advice given on the list was to “avoid the hecklers.” The author describes how listening to myths or fables about marketing can distract you from the plan you made earlier. As an advisor, I hear the coffee shop fables where a producer brags about how much they sold their wheat for. While there may be some truth to these stories, they don’t tell the whole story and often omit the ugly truths.

Myths surround succession planning work as well — for example, “there is a right way and a wrong way to do it” or “other people have it all figured out” or “it’s too hard and can’t be done.” Myths like this can keep you from moving forward with your own succession. It’s important to ignore these false messages and focus on your own situation. Avoid the naysayers, listen to your mentors.

A good marketing plan is not unlike a healthy succession process. There are ways to streamline both of them to lessen the overwhelm you may feel about them. Remember, you are not alone in this work.

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Getting an education while growing up on the farm was just part of the package. I only realized it had happened later on in life during my first off-farm job as a carpenter. My boss had rented a telehandler loader for a job and announced I’d be driving it because “You’re a farm kid, you can figure it out.” I didn’t think twice, hopped in and sure enough I had it figured in less than a minute. After that I began to pay attention to the wide array of skills I’d acquired outside of the public school system. Even now, as I’m about to turn 40 years old later this year, I’m noticing abilities I have that I learned on the farm.

The learning environment on our family’s farm was learn-by-observation, followed quickly with learn-by-doing. I’m pretty sure it’s the same on most other farms. The many hours riding buddy with my dad or opa in a tractor was the observing part. I was mesmerized by the spinning augers of the pickup header or the way the soil would be thrown by a cultivator shovel. I connected the dots from a lever pull in the cab to the shifting equipment outside the cab or how subtle changes in crop density would be reflected by engine noise, indicating the driver should make an adjustment. Furthermore, I was learning the spatial awareness required to maneuver a sometimes 120-foot-wide implement through a field. I was soaking it all in, learning everything I could through observation.

I was also receiving instruction while I rode along. My dad would tell me specific things to watch out for and show me specific subtleties of each piece of equipment. There were certain ways he preferred to drive and he expected me to operate similarly when I would eventually take over. In other words, there were preferred ways and less-preferred ways to operate the equipment.

Stage two, learn-by-doing, came quickly for some jobs and only later on for the more high-stakes tasks. I can’t remember how old I was when I began cutting grass but, the stakes were relatively low, so perhaps around 10-years-old. With my observational knowledge and a few instructions, I jumped on the lawn tractor and started mowing — slowly at first, and as I gained confidence, the speed increased. Dad would give feedback, then when it was time to mow again, I would make those adjustments. I made mistakes but the grass always grew back so it was never a big deal. One time I did drive over a water spigot and that was a bigger deal!

As I grew in age and experience, higher-stakes jobs became available. That meant mistakes could lead to costly repairs or delays. I would take what I’d already learned and apply that to the next responsibility, compounding my skill set. It wasn’t long before I was able to operate all the equipment, in some cases before it was legal to do so (driving a tractor-trailer unit to and from the field on dirt roads when I was underage, for example). As my experience continued, learning to do new tasks or drive new equipment required fewer hours of training. By the time I went to work off-farm, jumping in a completely new-to-me tractor on a job site and figuring it out was easy because of my farm education.

The focus throughout all of my learning on the farm was on specific tasks or jobs that needed to be done. Not much attention was given to other skills required for employment such as communication or conflict resolution. We just interacted with each other the way we knew best. I observed how my parents interacted with me, my siblings, their friends, each other and their parents. From birth I developed patterns and habits of communicating. The learn-by-observing and learn-by-doing stages were combined; they are for everyone.

Shifting stakes

In any business, communicating can be complex. In a family business, it is always complex. Most of our attention was given to the operational side of the farm business. In the summer months there wasn’t enough daylight to get everything done. In the winter months our time was filled with all the work we didn’t get to in the summer. We didn’t take the time to consider the relational side of the farm. It didn’t occur to us that communicating had high stakes — that errors in family relations could be just as costly as running a sprayer boom into a power pole.

I’m not casting blame on anyone; learning relational skills like healthy communication is difficult and awkward. They are also easy to overlook when so much of farming requires timely, high-priority operational tasks. Farmers can “get by” for a long time without having to think about relationships. I only came to realize much later in life that each of my family members and I had a preferred way we liked to be communicated with. I learned that when I read a book about personality styles.

Learning how to become a healthy communicator or how to resolve conflict may be difficult, but it isn’t impossible. The environment I grew up in and described to you was rich with skill development. We were all learning, day in, day out — using our mistakes as opportunities to further develop our abilities, evaluating our processes to become more efficient. I’m sure your farm isn’t any different. We can all learn to do just about anything. Start small and make little improvements. Compound your skills and apply them to higher-stakes conversations and make even more improvements. Don’t worry, you will fail, but everybody does; it’s the best way to learn.

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