Farmers' most important trait
If you ask farmers what skill or attribute is most important in their occupation, the majority will pause for a few seconds before saying "optimism" or "faith in the future." Some will answer "capital," "vision," "access to land" or "willingness to change with the times."
I agree, all those things are important, even vital. But here's what I firmly believe is the trait that modern farmers and ranchers need most to survive and thrive:
The ability to accurately identify the costs and benefits of a possible course of action, then assess whether going ahead with it would strengthen their operation. Put simply, they need to be really good at figuring out whether doing something would add value to their farm.
Here's an example: Should a farmer sell grain right off the combine or store it with hopes/expectations of higher prices later? I use it because the question was examined during a recent ag lenders' conference hosted by the North Dakota State University Extension service.
There are so many variables involved in deciding whether to sell or store. A very short and incomplete list includes the costs of drying grain, of spoiled grain and of not selling the grain right away and losing the opportunity to pay down debt or collect interest income. Potential benefits, in turn, include greater harvest efficiency and higher-down-the-road prices.
Nobody, no matter how smart or knowledgeable, can estimate all those variables correctly. But the closer farmers come, the better decision they'll make on whether to sell or store. And even if the right decision adds only a few pennies per bushel to a producer's' bottom line, the additional income easily could total thousands of dollars.
Decisions like this are embedded in modern ag. Which crop to plant and seed variety to use? Rent more land and at what price? Buy new equipment or repair what you have?
Reaching the "right" decision is complicated by short- and long-term considerations. What will be best in a year? In five years? In 50 years?
Past mistakes enter in, too. A farmer who once made an overly cautious or aggressive decision needs to learn from that, without going too far in the other direction.
There are many reasons, including bad weather and inadequate capital, why some farmers fail. The inability to accurately identify and assess costs and benefits of potential courses of action usually tops the list, it seems to me.
The same is true for farmers who stay in business, but don't thrive. Their assessments of costs and benefits are flawed, leading to decisions that don't add value, or the most value, to their farm.
Not warm and fuzzy
I realize this sounds cold and pragmatic. I realize this isn't the upbeat it's-a-great-way-of-life image some agriculturalists want the public to see. So I stress that many of us in agriculture, myself included, truly believe that ag is a way of life to cherish and promote.
But farming first and foremost is a business. Farmers and ranchers who consistently make sound business decisions — who accurately analyze costs and benefits, then act accordingly — are the ones who survive and thrive.
No, it's not warm and fuzzy. But it's the truth.