Preface: The following column was written prior to the “farm crisis” for which some farmers currently find themselves, at no fault of their own. So I certainly have empathy for those experiencing unfavorable circumstances for which they had no control. Please note that some states are offering both psychological and farm management services to help those in need through these tough times.
Orin Samuelson said it first: “Farmers are the poorest marketers, and complain the most.” Moreover, I tend to agree with him.
Ask most any farmer, and he will be hard-pressed to tell you what his cost of production is. Ask him what the price of his commodity will be when he goes to sell it, and most won’t have a clue. Ask what his return on investment will be, and he will look at you like you were an alien.
These same farmers were encouraged to leave the farm 40-50 years ago because there was no money in farming. Fortunately for those who didn’t listen, it was the best advice for which they never heard. In spite of itself, it turned out to be a very profitable venue. I say in spite of itself because it was never by design or sophisticated market planning.
That’s where all the complaining enters in – everything from the weather to prices, even the hard work compared to other vocations. Don’t tell that to a successful businessman. He won’t have a very sympathetic ear. He has worked every bit as hard as you have, and, in fact, even envies your independent way of life. To be able to come and go as you wish, without any timelines, schedules, or anyone to answer to, is a lifestyle that we all aspire to.
Don’t get me wrong, farmers work hard and have cause to worry, but the rewards far outweigh the downside. In fact, the most significant attribute to farming was once “the way of life,” but today it is that and more, much more regarding wealth. Farming today, is an elitist vocation, like that of being a doctor but it could be so much more if only they would become as good at marketing as that of their counterparts in the food industry. The food industry is the greatest marketer on the face of the Earth.
They squeeze every dollar out of a pound of food that there is to get.
Farmers, on the other hand, wing it and hope for the best.
The focus of a farmer is entirely on production, and in that arena, he is the best. He thinks high yields — be that of bushels per acre, the rate of gain, feed conversion, or quality and cutability yields — that the rest will take care of itself. However, leaving more profit on the table than you put in your pocket makes about as much sense/cents as pouring money down a rat hole.
Selling record yields at less than the cost of production do not equate with profits.
Think about what you could do with those extra profits to make this a better world.
You should know your outcome before you invest your first dollar. That’s what market planning is all about. However, I’ve spent nearly a lifetime preaching and teaching the importance of livestock market planning, and have yet to meet anyone who has voluntarily come forward with a livestock market plan of their own. Instead, most often, it is a case of selling them on the idea and teaching them how to do it. Is it any wonder that farmers do such a poor job of marketing?
Marketing isn’t in their DNA. If it were, they would come to realize the comparison to doctors, knowing that as long as there are people on the face of the earth, there will be demand for doctors and farmers alike. The very mode of survival depends on both, as we will always need to eat and stay healthy. Knowing this, there will still be an aggressive expansion of both, so let’s prove Mr. Samuelson wrong by doing a better job of marketing.
Doing a better job of marketing means doing a more profitable job of marketing.
A beneficial market plan consists of three components:
(1) Know your cost of production.
(2) Know the contracted delivery price of your commodity.
(3) Know how to achieve every premium incentive available.
If you know these things, you’ll be profitable.
Your response may be this: What about the risks involved?
There is a risk in everything you do in life. When it comes to farming, these risks can be minimized by purchasing everything from yield protection to price protection. They merely become reflected in your cost of production. Your cost of production must be realistic and include everything from energy variables to the human resourcefulness of everything from passion to the fulfillment of your every sense.
Developing a true marketing plan is comparable to taking a long, hard look at yourself in the mirror: It should reflect everything, even the flaws. Building a program on wishful thinking is as unproductive as covering a scar with makeup.
Mr. Samuelson is a wise, perceptive man. Let’s prove him wrong and bring another dimension to his “voice of agriculture,” that of successful marketing.
Profitable marketing could change the face of agriculture, and contribute to a society that would enrich not only the earth but, every soul that inhabits it.
As the “Knightro Report” phases out of livestock marketing, and into the body and soul of those that are actually doing the chores, it will measure success more by self-satisfaction than by just the bottom line.
There will be a lot more emphasis on the top line.
American Gothic: Symbols of True Survivors
This familiar image was exhibited publicly for the first time at the Art Institute of Chicago, winning a three-hundred-dollar prize and instant fame for Grant Wood. The impetus for the painting came while Wood was visiting the small town of Eldon in his native Iowa. There he spotted a little wood farmhouse, with a single oversized window, made in a style called Carpenter Gothic.
“I imagined American Gothic people with their faces stretched out long to go with this American Gothic house,” he said. He used his sister and his dentist as models for a farmer and his daughter, dressing them as if they were “tintypes from my old family album.”
The highly detailed, polished style and the rigid frontality of the two figures were inspired by Flemish Renaissance art, which Wood studied during his travels to Europe between 1920 and 1926. After returning to settle in Iowa, he became increasingly appreciative of midwestern traditions and culture, which he celebrated in works such as this. American Gothic, often understood as a satirical comment on the midwestern character, quickly became one of America’s most famous paintings and is now firmly entrenched in the nation’s popular culture.
Yet Wood intended it to be a positive statement about rural American values, an image of reassurance at a time of great dislocation and disillusionment. The man and woman, in their solid and well-crafted world, with all their strengths and weaknesses, represent survivors.
(source: Art Institute of Chicago)