All industries change over time and industry players must change with it. Just ask the Big Three U.S. auto makers what happens when you don’t.
When my son Jon was about 3 or 4, he was fascinated by the television show, Mighty Morphin Power Rangers. In it, five normal teens are given the ability to morph, or change, into superheroes to fight evil. The call to arms was the cry, “It’s morphin’ time!”
Well, there are no super powers out there to magically whisk your farming operation safely into the future, so I gotta tell you: It’s morphin’ time!
Some producers choose to leave agriculture rather than adapt to industry changes. (Or perhaps they feel they have no choice.) Some producers farm part-time and work off the farm. Some producers switch gears completely and find a niche market. Some producers diversify, while still others concentrate on one commodity. That’s OK, because there’s no cookie-cutter answer. Your farm’s future has to match your own management ability.
Here’s one reality from University of Minnesota Extension agribusiness expert Gary Hachfeld: Most farms have to make more income to support today’s farm families.
Hachfeld studied the 2007 household and personal records kept by 850 real farm families in southern Minnesota. Their average household expense was $74,804, with an average family size of 3.4 people.
Don’t think your household expense is that high? Tally your own, but be sure to include: food, medical care, charitable donations, supplies, furnishings, clothing, educational costs, recreation, gifts, utilities, child care, house rent/mortgage and upkeep of your house. Oh, and don’t forget nonfarm vehicles, investments, savings, life insurance premiums, income/Social Security taxes and nonfarm capital purchases.
Based on markets/budgets in Minnesota, Hachfeld calculates that a cash grain operation with a 50/50 corn-bean rotation would need to plant a total of 928 acres to earn that $74,804 (after all farm expenses are paid, but excluding a charge for labor and management, to which I would argue that labor/management costs should always be included to give you a better real-world picture).
For other farms, it would take 127 dairy cows; 10,717 head of hogs from weaning to finish; or 948 beef cows in a cow/calf operation.
You want to know what it takes to earn a living on the farm? There’s your answer, albeit a rather simplified one.
Ultimately, the basic building block of agricultural competitiveness and profitability is your own management. Only you can figure out how to make it work.
It’s morphin’ time.