There is no one way to farm, and likewise, no two farmers are the same.
Agricultural economist David Kohl has, however, observed common habits that are consistent among successful farmers. The Virginia Tech professor emeritus, who currently serves as president of the consulting firm AgriVisions, shared some of these habits during the Professional Dairy Producers of Wisconsin (PDPW) Annual Business Conference held in Madison, Wis.
- Be goal focused, in both business and family. “One of the things that is very important in this cycle we are in is to reconfirm your goals,” Kohl said.
- Develop core values by identifying five to seven words that mean success to you. Kohl said these words don’t have to have anything to do with economics.
- Give back to others if you are mentally and physically able.
- Look at and invest in productive assets. The people asset is very important.
- Take an honest family living draw.
- Do a financial sensitivity analysis, and follow the 5 percent rule: How are you going to be 5 percent better in three years?
If you have a profit window, Kohl said to put money toward efficiency first, and growth second. He also said to build up some working capital and cash.
- Be interdependent. “Dairymen used to be very independent,” Kohl said. “Dairymen of the future need to be very interdependent. We have to all be in this together.”
- Value family and people. “The best crop you’ll ever raise is your children,” Kohl remarked. This could be extended to grandchildren and aspiring young agriculturalists that you mentor. He encouraged producers to stay positive during the down cycles by maintaining a network of people around them.