By John Berry
As I have conversations with grain producers about farming, markets and generating revenues; I am regularly impressed with the wide diversity across individual businesses. There does not seem to be a set response when you consider the needs and expectations of specific farm management teams and individual families.
How about the following list of business topics as a substitute for a standard response? I believe we should all be discussing these, if we haven’t already, as we continue our careers in food production.
Business topics to consider:
- Risk tolerance of each management team member
- Tools to mitigate the risk we want to share with others
- Costs, benefits, and flexibility of these tools
- 2015 cost-of-production
- 2015 revenues generated
- 2016 projected cost-of-production
- 2016 projection of revenues
- 2017?
When grain producers are squeezing their budgets, typically; seed, fertilizer, land, and machinery are the places to control costs with the most effect. The market will only give us a price that the market agrees with. The market has no responsibility to give us profits. Our current management challenge may be to maintain, and perhaps grow our enterprises. From at least 2008 through 2013; grain cropping was offering many opportunities to gain income above expenses. More recently, most grain producers decreased their net worth in 2015. 2016 might be similar. Now is the time to control expenses without losing site of maximum production.
For additional information on how to participate in one of the local grain marketing discussion groups visit the Penn State Extension Grain Marketing Meeting web site. These casual events meet monthly from January through March and are a great way to enhance your confidence with marketing your grain crops. Remember, marketing is the only farm management task that generates revenue.
Source:psu.edu