Country Guide asked Jack Thomson, president of the Outstanding Young Farmer organization, Rob Saik, CEO of The Agri-Trend Group, and Jerry Bouma of Toma & Bouma Management Consultants to share their insights on the things that top modern farmers do that explain why they’re ahead of the pack.
Their list of seven top practices gives us a peek into a future where attitudes and aptitudes will come together to drive farm success as never before.
1. Start every day with positive attitude
These days, the stars are just starting to make way for the sun to rise when Jack Thomson from Antigonish, Nova Scotia comes in for breakfast. He milks 120 cows starting at 3:30 a.m. so he can share breakfast with his four children, and so they can also have their evenings together.
Despite the schedule, Thomson’s energy and enthusiasm vibrate through the telephone when he talks about the common denominators he sees in the participants in Outstanding Young Farmers (OYF).
OYF nominees come from across the country and from all sectors, but what Thomson sees in all of them is positive attitude. “They are passionate, and driven not just by profits but also by something more,” Thomson says. “They want to make a difference, to make things better for their businesses, for their families and for their communities.”
“They wake up and they go to bed always in this right state of mind,” Thomson says. “If the situation is not so good, then they turn it into an opportunity.”
Thomson knows about surviving challenges. In 2007, right after they had just finished remodelling their barn and had remortgaged to do it, lightning struck and the resulting fire consumed everything, except 80 cows. And no… they hadn’t yet put into place insurance for the remodelling.
They started over, slowly rebuilding the 120-cow milking herd, West River Holsteins. Then, three months later, an electrical fire destroyed their home, right before Christmas.
“You are going to run into a challenge in this business,” Thomson says. “If you are not optimistic, you are not going to make it.”
2. Plan, think and act like a CEO
Top farmers today focus on strategy and on their goals, and on ensuring the resources are in place to achieve these goals, says Jerry Bouma. In 2005, Bouma and his partner wrote a summary of research called Best Management Practices of Leading Farmers. The 158 leading farmers they interviewed in Western Canada were fundamentally good managers and were market focused.
The top farmers today are still good managers, and they understand marketing and risk, but today’s leading farmer is more process oriented. “They set the direction of the farm but they also develop ways to achieve their goals,” Bouma says. “These gifted managers have a systematic approach.”
They build or access systems, including agronomic information and custom services. They’re strong on planning and strategy, but they’re also strong at finding people to do the production work and at setting production plans. For example, to manage risk, they have marketing plans and hedging strategies. These producers set expected margins, and from there, they create clear plans to make it happen.
Today’s younger successful farmers are more likely to come to their work thinking about business strategy and business principles, says Bouma.
And, says Bouma, this is going to be a generation to watch. “Their objectives are a lot bigger, grander than we ever could have imagined a decade ago.”
Bouma also says that two very diverse systems are currently operating in farming, with small intense producers focused on local food production and larger commercial crop and livestock farms. Yet both require CEO-type of leadership.
When Rob Saik, CEO of The Agri-Trend Group, works with top grain and oilseed farmers, he finds they have short- and long-term plans for their farms and for themselves. These plans are written down, and the plans give the farmers confidence in their decision-making, in addition to giving their bankers more confidence too.
“They plan where they want to go, and they set strategies using outside help,” says Saik.
This is more involved than writing mission and vision statements. It’s setting financial goals and developing specific projects and production plans.
Importantly, says Saik, these farmers also co-ordinate complex businesses by preplanning for potential hiccups, threats and growth opportunities.
This is thinking like a CEO.
3. Have a new set of boundaries
Today’s top farmers have burst through the traditional physical boundaries of farming and have a whole new view of the limits of their farm, beyond geography.
In the past, farmers were very spatially bound, but that’s simply no longer the case, says Bouma. It’s not unusual now for the CEO farmer to be farming lands or raising livestock across a wide geographical area.
It used to be 3,000 or 5,000 acres was a big grain farm. Today some farmers work 10,000, 15,000 or 30,000 acres. To do it at that scale, they rent the land, they lease equipment, they hire staff and custom work, says Bouma.
However, it isn’t just the scale of the farm. It’s their approach to resources. These farmers have worldwide connections at their fingertips for everything from production to marketing, and they leverage those connections. For example, they text an engineer in Ireland about how a TMR mixer works.
But perhaps most importantly, they also have a new way of looking at their assets. Low interest rates and more aggressive leveraging have stretched their financial boundaries, says Bouma. The limitation is what can you obtain — what you can rent, lease or buy.
The boundary is no longer what your bank will lend you.
“Farms today can be operated under totally new boundaries — or, perhaps more accurately, the lack of boundaries,” says Bouma.
And they have their eyes on the future. With so many Canadian farmers in their 70s, huge numbers of deals are going to go down in the near term, says Saik. “Very large farms of 30,000 acres are going to be able to move to 50,000 acres fairly quickly.”
4. Network, network, network
Today’s top farmers network with other CEOs from other farms and other businesses. Their diversified networks help them understand how to expand and how to find financing. “This is not about size, this is the ability to accept knowledge and put it into motion,” says Saik. “They (top farmers) seek a lot of outside help and are not scared to put it into play.”
The top farms today are more complicated and bigger, so farmers recognize they can’t do it all. Over the years, Saik has seen that top farmers know how to hire good people.
Saik was packing his suitcase while talking with Country Guide on his ever-buzzing cellphone. This guy’s the definition of busy. However, he is never too busy to learn, and every 90 days for the last 21 years he has hopped on a plane to attend a workshop on business strategies. He’s the only aggie in the room, and he invariably learns from the other participants.
More farmers are adopting similar strategies. It’s all about being open to learning. Saik describes today’s top farmers as being “coachable” and says the ability and desire to learn is what divides the top third of farmers from the lower two-thirds.
For Jack Thomson, one of the benefits of being involved with OYF is interacting with the nominees. Consistently, they’re intelligent, they’re never afraid to ask questions, and they are open thinkers.
A side benefit to this sharing of ideas is that it’s extremely motivational. In the decade since Thomson and his wife, Rhonda MacDougall, won OYF nationally, they’ve stayed connected to the group because of the energy and inspiration of the other participants.
“Not only are they good business people, they have compassion and understanding,” says Thomson. “We (OYFs) all care. That’s what binds us.”
The need for networking goes beyond the farm gate and social time. Top farmers are deeply connected to their markets, adds Thomson. With help from their networks, they gain insights into the markets and their trends.
5. Understand risk
“If something’s going to go wrong, I’d rather be stabbed in the front than in the back,” says Thomson. “At least then, you can see it coming.” Although open to new ideas, top farmers look hard at whether their finances and management can handle it.
Generally, younger people have a greater appetite for risk than older ones. Even though the OYF nominees are brimming with optimism and passion, they measure what difference any change is going to make, and they understand that it’s got to be beneficial for their life and the family and not just financial.
Part of making good choices is understanding risk, says Thomson. You have to believe in your decisions and not be consumed by the potential of mistakes. “Risk is what you can’t control,” he says. “And you just try to mitigate exposure to those factors.”
6. Experiment
Saik sees farms moving toward formalizing research. With variable-rate technology it’s possible to do strip trials in live field conditions. Yield monitors and well-designed strip trials allow for statistically significant data results. These long skinny strips can be revolutionary, says Saik.
Besides, farmers can claim their research and development budgets through SNRD credits.
“There’s no better data set for a farmer than what happens on their own farm,” says Saik. “These are ground truths.”
7. Use big data effectively
Many of today’s leading-edge farmers are taking data use to the next level, says Saik.
They use and integrate the data they collect, linking production and financial.
This information needs to move seamlessly between growing the crop, selling the crop and managing the farm business. Historically, we had very disparate information from yield monitors to elevators to grain-trading companies to personal accounting programs.
Some of today’s top farms have a way to hook all their production information together in one place so they’re able to see their whole farm. “Data is the largest opportunity for farmers,” says Saik.
As farmers gather more data years for their farms, their decision-making become more accurate, says Saik. Eventually they can make production decisions based on this data on the fly, and to do that, he believes it’s imperative that farmers should own and control their own data.
Back on the farm, Thomson isn’t fazed by the onset and integration of technology. In the last 10 years, the flow of information has sped up and it has become important for farmers to learn how to sift through and manage it.
Access to information is also mobile, so Thomson can stay connected. But that means he can also get sidetracked by data. “Farmers are farmers for God’s sake, and you can get too much information so you end up churning in it and it turns into nothing,” says Thomson.
The important thing, Thomson finds, is to remember the purpose of information — to keep improving.
“Top farmers in my father’s time —and now — know what they are looking for,” says Thomson. “They have the goals of trying to be the best farmers we can be, to be involved in the community, to make it a better place.”
Source: Country Guide
