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cropsey, il 61731 | Know your own business. Every year/crop calculate a break even price to use as a sales guide. Profitable sales keep you in business. Swinging for the fence is best left to folks with enough money to gamble with. Also, it's important to study what happens if your break even price isn't likely to happen. What would you cut? Suppliers will all suggest you shouldn't reduce your expenses with them. I'm hearing the phrase "no one ever saved their way to prosperity", but that's obviously not the point of view of the guy who has to write the check. As justlearning pointed out, everything in business needs to have a return on investment. It doesn't always have to happen right away, but in a low margin environment something that might have a return 60% of the time would not be a high priority.
Also be willing to toss 'the book' away sometimes and think outside the box. It's possible to do the same stuff everyone else is doing and hope for 'helicopter money' from the gov't, but I'm not sure that's a sound business plan. It would be better to position yourself (costs, pre-sales of crop, planned sales of less than essential assets) so the potential of a handout is a blessing and not a savior. Those types of "saviors" are not reliable.
Lastly, have a vision for your business. It doesn't have to be "double farm size in 3 years" because plans like that leave out significant details like profitability that could lead to "no farm size in 3 years". All of us have varying degrees of talent in the many facets of farming. I would guess that's why many of us like it - the variety of work and the fact that you don't have to master all of them - just be decent on most and try to master what you like and are good at.
I wouldn't worry too much about being left out of the marketing game that several here are good at and enjoy. There are tools you can use, but most options expire worthless pretty much by design (human behavior thing) and actual futures requires active participation (even checks on margin calls). These days you can forward contract with an elevator and I use the hated accumulator contracts because it keeps me selling a decent level and the double up is at a price I felt good about anyway (if the price stays high, you sell 2x bushels in the fall). Like others have said, keep the emotion out of it. Take your price and don't worry that frytown used 6 fork formations to accurately predict a head and shoulders doji on the 16th elliot wave to earn 10 cents more than you. Some will suggest that the 'better marketers' will rent more land (have a prettier wife, nicer truck, nicer mcmansion, etc), but once you get into the purely speculative part of marketing it's gambling and by nature doesn't always pay off (because it's gambling). The places where playing with futures and options work is when everyone is taken by surprise and your position takes advantage of that surprise. Big surprises don't happen that often.
that's a lot of words - sorry | |
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Advice please
