Saturday, July 4, 2015

Budget Triage

January 1999

When the dust had settled from 1998, I wearily began the plan 1999. I had a cashflow projection from several months ago, and when it updated from the final figures from 98, and was modified for changes that had happened on the farm, I saw to my horror a less than satisfactory margin.

Since raising income, always a good idea but very hard to accomplish, was not going to solve the whole problem, Jan and I took the knife to our expenses, amputating in an effort to save the patient.

This is not easy to do either. Most expenses tend to look reasonable, or “appropriate” as we say today. We do not squander money on frivolous luxuries. We invest in needed goods and services. Soon the discussion became pretty defensive.

There is a strange tendency in farm budget decisions to look at “family living” as the evil demon that causes all the problems. In fact, when farmers talk about cutting back, they usually start by making a pronouncement about living expenses. 

This prejudice offends my mathematical sensibilities. Looking for savings is best accomplished by looking at large expenses, and household expenses are not  at the top of the list compared to many farm expenses. Too often, in my opinion, the wife is expected to make up for inefficiencies in the farm. There also seems to be some sense of justification for overspending if the expense is tax-deductible. Those dollars, despite their IRS status must be generated the same way, however.

Our budget cuts:
      1. Major capital improvements:  This is pretty obvious.  Cancel the newer truck and truck shed. 
      2. Interest:  I pay a load of interest to my bank. To reduce that outlay, I am refinancing several parcels of land into a much easier to underwrite package. I have proposed, after some research, a scheme to my lender that has been approved and will cut my interest about $4000 this year.
      3. Fertilizer:  Prepare for agronomic blasphemy: I am making a withdrawal from the “soil bank”. For many years we have been in a buildup program on fertilizer. Dropping back to maintenance or even sub-maintenance levels for one year will have minimal, if any impact. Using a straight-spread instead of VRT saves about $3500 on top of the  $5500 materials savings. This sends a clear market signal to my supplier as well.
      4. Repair: The great mystery category.  Detailed analysis of my spending in this category produced the following decision - no new power toys - er, tools, period. Also, my tendency to replace the whole assembly when one small part shows wear (sickles, sweeps, rasp bars, etc.) can take a one-year vacation. Savings goal: $3500
      5. Chemicals: Based on totally unscientific research of my own, I have decided to cut back on first-year rootworm insecticide in the middle of large (80+ A.) fields, since egg-laying seems to be concentrated in the edges. (Yes, I realize the guarantee is void.)  Savings of about $4000 
      6. Insurance: Recheck my farmowners/vehicle for deductibles as high as effective. Eliminate all “first dollar” coverage. Make sure the inventories covered are accurate and reasonable. Surf Internet for auto coverage quotes. Target savings $500
      7. Office:  Several areas of fertile budget cutting. Subscriptions - eliminate duplicate sources of information. One source is getting me most of what I need.  Lose other services this year. Office expenses - stop upgrading every computer program just because version x.0 is out. No hardware upgrades. (Ouch!) Lose computer mags.
      8. Capital equipment: Sell my excavator. (sob!) I wanted to get a different kind anyway, and a 2-3 year hiatus won’t be a big sacrifice. Also sell some wagons and never-used tools at a consignment auction. Capital freed: $15,000
      9. Taxes: I have always tried to resist frontloading expenses, but paying some operating interest early could save $4000-5000. I’ll hate myself years from now, of course.
      10. Household expenses
        • Insurance: Stop term insurance on Jan. Our boys are grown, and their education was the rationale for the coverage. (We replaced my term insurance last year and saved $1200) $500
        • Food: If you track it, it is amazing what you can spend on alcohol, even one drink at a time. I don’t vist the tavern, but do enjoy wine with dinner. Cutting back our wine consumption is a good thing for many reasons. If you drink, keep track for a month what it costs - could be  a surprise.) $400
        • Rigorous vacation planning: new Internet techniques for travel can cut our vacation costs, if we plan better. $500
        • Clothing: Keep my weight down so my old pants and suits fit. Throw out Lands’ End/Speigel catalog. $800
        • Home: Moratorium on kitchen investments, magazines $300
      11. Miscellaneous
        • Change bill paying date from monthly to weekly to eliminate the credit cards that come due right on the wrong day so I keep getting a late payment charge, even though we always pay in full. Also I’ve noticed they are starting to squeeze the traditional 30-day grace period. $100
        • Scale back Christmas (easy for us - no grandchildren yet) $500
        • As a last resort, consider paying the minimum principal due on long term debts. We have always tried to pay at least at little more than required. Possible savings: $3000-5000
It wasn’t fun, but we both feel better.

I think.

Last year's mistake

January 1999

Agriculture remains, for the most part, an annualized business - a cycle that starts in spring and ends in winter. Farmers feel this rhythm at an almost molecular level, and as we age, I have found, adapt most of our lives to the circle of years.

We speak of years as distinct entities and treat each new round of months as a “new ball game”. But underlying this succession of business and personal cycles are some constants that I find both help and harm my efforts to get ahead in my profession.

One of the strongest such tendencies is the absolute horror of the “successive mistake”. This is the concept embedded in the “Fool me once, shame on you - fool me twice, shame on me” proverb that seems to have been universally taught in rural America. The repeated mistake is not just unfortunate - it is shameful, and professionally embarrassing.

Sounds reasonable enough. But if you look closer at what this syndrome implies, it may not be so straightforward. Successive mistakes deserve personal blame only if they are truly identical, which rarely happens. The world seldom delivers matching circumstances, a problem that plagues forecasters of events as divergent as economics and fashion. Without the repeat of initial conditions, there can be no repeated mistake, just similar outcomes, which cannot be blamed on a character flaw.

Moreover, thinking in terms of mistakes and triumphs oversimplifies a much more complex range of outcomes. I find increasingly, rather than right or wrong moves, I am confronted with a bewildering array of similar appearing choices, any of which might get me where I want to go. Looking back on these decisions, I have also noticed that the results would have been likewise a mixture of good and bad news. Some would work better than others, and some, even after the fact, defy labeling. Was paying that high rent better than losing that ground? Maybe. If I had planted more short season corn, would my yields have improved? Depends.

In short, mistakes, recent or not, are getting harder to identify clearly. Worse still, things that were a bad choice in one instance, could easily be the optimal choice in a set of circumstances only slightly different. Nowhere is this more frustrating than in the area of marketing.

The instinct to avoid last year’s mistake gives a strong undercurrent in my marketing decisions, I have found. In 1998, for example, not selling early (before harvest) was a bad idea, and holding on to 1997 crop was even less fruitful. I now feel an eagerness to dump my 98 crop as rapidly as possible, since declining prices is the scenario I can imagine. When I get these itches, I often interpret market signals illogically.

Therein may be the center of the problem. My middle-aged memory tends to focus on last year to the exclusion of previous years. In the last few years, I have tried to compensate for this by writing down in January both a few simple Goals for the upcoming year, and the “Great Lessons” (profound truths revealed to me by experience) from the past year. It makes for both interesting and confusing reading.

For example, I have been engaged in an ongoing debate with myself (the kind you always lose) over two production topics: what population to drill beans and how much N to apply. Reading my past pronouncements on these problems over the last decade, I have discovered I have firmly resolved to “never again put on more that 140# N” followed shortly by the vow to “never use less than 180#”. Similarly, I have alternated in my so-called “Great Lessons” from 160,000 seeds/acre to 240,000, with equal conviction each way.

It could be that: 1) I’m getting my shorts in a knot over fairly trivial issues, and 2) many of my “Great Lessons” need an expiration date. Much of what I do is a simple response to the preceding year, to avoid the embarrassment of a double fault.

Much of what we decide now in farming will have to be done looking forward, not back. Just as Jerry Gulke is always harping on responding to today’s market, rather than trying to predict tomorrow’s, there may be few fail-safe guidelines that will ensure success. I am beginning to suspect also, that being aware of my own personal mental prejudices when I make decisions could be the best “Great Lesson” of all.

Looking for the “right” answer might be a waste of time, too. What I need are some answers that are “right enough”. I also need to lighten up about my mistakes, even the second time around. If my best analysis tells me to plant the corn deeper than usual, even though last year that was a blunder, I need to decide which I trust more - my brain or my pride. The object may be a process to find answers, not a specific answer.

Last year’s mistake is a bogeyman  I need to outgrow. Ruling out a legitimate course of action because it wasn’t the greatest tactic last season diminishes the choices I have for this year’s problems. And I need all the ammo I can get.

Endless marketing

December 1998

Something had to change. Our farm’s financial performance was not getting the job done. It was not illogical to point a finger at bad weather, bad luck, and bad timing. It just didn’t change any of the numbers or ease my own unhappiness.

In desperation I was forced to look at the one area of performance that is the most merciless for my self-esteem: marketing. I have long railed against the marketing obsession of magazines and advisors as just another way to induce feelings of inadequacy throughout the farm belt. After all, marketing is something you always could have done better. Regardless, I had no choice if I was to keep doing what I wanted to do for a living.

With this positive mental attitude, I decided I would grudgingly subscribe to (yes-pay actual money!) a market advisor who seemed to have some meager grasp on logic and then FOLLOW THE ADVICE! I swore this out loud to my wife and friends to insure plenty of irritating support when I began the inevitable backsliding and second-guessing.  

I chose an advisor I had heard speak at a seminar and who agreed with my fundamental outlook. Although advisors can be nice people, good marketers get under my skin in a hurry. They seem to insinuate comparison.

Fast-forward to now. The Result: I am satisfied with my marketing this year. This does not mean I have hit the highs and called the lows, but my farm is doing OK. The credit belongs mostly with the advisor, perhaps, but for once, I actually did some of the things I was supposed to do, instead of just thinking, “That sounds like good advice.”

I’m not all that thrilled about this success. Sure, I’m glad to have sold and hedged at the right times (mostly). In addition, I recognize and appreciate the financial stress I’m not having, for once. I even realize I am not anxiously watching for Congress to solve my problems. Nevertheless, this modest victory exacted a price - a steep and unexpected price.

Time To accomplish my marketing plan took much more time than I had expected.  And not just idle hours on rainy Saturdays, either. I had to stop the planter to read the day’s fax, get into the house to see the price quotes, struggle to make marketing orders while dust was flying in every field around me - I even got up at 3:30 am. to check the Project A quotes on Monday mornings after the weather forecast was issued. In short, more loathsome deskwork that took top priority. I now believe that to be a successful farmer means my work will be more and more management, less and less operating.

Discipline This is not my strong point, as you may have guessed. I run on emotions and frankly, I like it.  It makes life fun and exciting. It rarely makes money. With Jan’s help, I would decipher the recommendations, call the broker or elevator and take a position. And when the market went the wrong way, I strove to remember that losing on a hedge meant winning on my inventory. In short, I made one small painful step in the direction of risk management.

Adaptability I have not farmed for 25 years without acquiring ingrained marketing habits. In fact, I was in a rut - using the same seat-of-the-pants scheme year after year. I liked this rut. It was familiar and required little or no heavy thinking. My new method requires me to constantly analyze and revise my position, and worst of all, keep learning. While I have always considered myself well informed, until now I had not realized the difference between hearing news and responding to it. Moving from knowledge to action is astonishingly hard.

Most years using the “same ol’ same ol’” got me by OK.  But the stakes keep rising and the competition doesn’t care whether I want to change or not. I am not alone in wanting farming to be simpler and less mentally and emotionally exhausting. In this, we are no different from every other occupation. All over the world, people bemoan a new level of performance demanded by global competition. Maybe we have been luckier than many professions to have escaped this long.

I have also realized that this could - and likely will - go on forever. Like every other business selling anything, to survive I have to be marketing every day of my career. I am doomed to work I detest. (In fairness, after two years, I now hate it a teensy bit less.)

Maybe this is change isn’t so undeserved.  Throughout my career, many of the tasks I truly hated in farming have been eliminated - cleaning out the barn, for example. The physical aspect of farming is now perilously close to enjoyable exercises: operating machinery, building and repairing stuff, driving around in a pickup a lot. There have always been unpleasant tasks. Most of them just used to be outside. Maybe I’ve gotten spoiled. It could even be that I might come to find some small satisfaction in these new chores as well.

So that’s where I am now.  My attitude is being adjusted. I no longer think of it as marketing.  I picture it as cleaning out a managerial barn - something you just gotta do.

As safe as we want to be

November 1998

It should be obvious to any member of this profession that farming is not a particularly safe occupation. In fact, it is one of the more dangerous ways to make a living or raise a family. And we seem determined to keep it that way.

It is difficult for many farmers to make safety a priority. For starters, “Who’s gonna make us?” Because of operation size or the lack of employees, there are few enforceable safety restrictions. Similarly, the politically sacrosanct “family” umbrella shelters us from other safety mandates.

This lack of superior authority makes it easy to engage in hazardous practices, many of which pass for clever tricks of the trade. When I was in the Navy, by contrast, nuclear technology was so unforgiving that safety was the first thought, not the last. Plus I have seen naval careers crippled by not following the rules to the letter.

My son is a mining engineer. He has described in harsh detail how mining has been changed by the Mine Safety and Health Administration (MSHA). Like OSHA in industry, MSHA is a bureaucratic cross for miners to bear. But the bottom line is that far fewer miners are injured and killed than before.

Indeed, one reason I strongly urge young people to work off-farm before returning is to get some real-world exposure to safety training. My naval training changed my attitude and helped me handle the urge to take unnecessary risks when pressured. The fact that almost every other job has stringent safety rules can make farm practices seem pretty foolish by comparison.

Maybe farmers will continue to avoid regulation by being small and family-based. However, it could also be that some politician or regulator is going to take a look at our professional safety record and see a need for government action, which could just coincidentally help his career.

One possible justification for such intervention is that, unlike other industries, we too often injure our own children. I do not wish to add pain to those who have experienced this terrible tragedy, but I am appalled at the casual attitude we have towards placing children in harm’s way through apathy and ignorance, or worst of all, for profit.

Those who feel that government will never have the political will to invade the family boundary to enforce safety rules on farms might want to rethink. The increasing use of “children’s welfare” as the moral justification for efforts as diverse as foreign policy (Iraq) and health care provides a useful precedent to those outside agriculture who would clean up our act for us.

There will be those who see this position as an infringement of constitutional freedom, but freedom brings concomitant responsibility. In my opinion, we are not handling that responsibility well, to say the least.

Others will also argue that safety rules and equipment interfere with the operation of our farms. Actually, I agree. But if your farm derives its competitive advantage from operating unsafely, you are not much of a farmer in my eyes, nor a likely long-term competitor. The operators I admire and want to emulate are those who can keep the people safe and still make money. Oddly enough, even cumbersome rules can be adapted to, and routine safe procedures can become as timely as hazardous shortcuts. Over the long run, safety pays huge dividends.

Our professional obsession for speed also complicates our priorities. Cutting corners on safety can save time in some instances. Even the threat of not finishing at all due to an accident rarely overcomes this racetrack mentality. It is important to remember therefore, that your work practices affect others by contributing to the professional standards in your area. In short, you are risking other lives as well as your own.

Unfortunately too, farm safety has become a “women’s issue” in many male operator eyes. Farm women’s organizations have been more alert to the magnitude of this problem and are in the forefront of its solution. Perversely, this can exacerbate a sexist perception of operating safely. Believe me, the “real men take chances” philosophy is out there. It is to our shame, gentlemen, that we have been so slow to join in this important effort. The truth is that real men don’t throw lives away.

We could be building our own solutions. For instance, by helping insurance companies devise routine farm safety audits that allow farms to qualify for insurance discounts, we could assign a dollar value that many farmers seem to need to recognize the risks involved.

Professional organizations such as Farm Bureau or National Corn Growers could also work to train members to view safety as an urgent political issue, not a breakout session for spouses. And the media, including me especially, needs be careful how funny we make essentially dangerous actions appear. We also need to educate our whole industry on how to weigh and compare risks - risk communication.

More than most other occupations, we farmers enjoy freedom of action in our professional lives. However, there is no legal or moral freedom to hurt and kill. 

Farmers are from Earth,
brokers are from Pluto

October 1998

One tiresome theme of this latest “new” age of agriculture is that farmers just have to get better at using the Board of Trade to market. Even more amusing is the idea that government handouts can be replaced in some manner by manipulations of a commodity trading account.

Think about this concept for a second.  Farm payments required that you sign your name and have a body temperature of around 98°.  Receiving the same compensation from commodity trading requires you outsmart someone who is likewise trying to get your money. It was difficult to lose money in the ASCS welfare game, although many of us suspected that others were somehow milking this cow more efficiently that we were. 

Now we are confronted with a new “future”. We have to deal with its essential unknowability. Marketing is, at its core, a problem of prediction. Using whatever information we can muster, we estimate what tomorrow will bring and place considerable bets - which we can lose! Compounding this risk is the unfamiliarity of most producers with direct commodity trading. Bottom line: the new system requires enormous effort that up to now we have largely avoided.

For my entire career, this problem has been addressed by the “education” route, and in all fairness, there is a huge knowledge void to be addressed. But after the courses are completed, and the workbook examples calculated, the actual plunge into commodity trading introduces a new factor into the problem that, in my opinion, causes more difficulty than all other influences: the broker.

It could be that producers have little direct market participation because of cultural, not business, obstacles. All I seem to have in common with any broker I’ve met was a species. We don’t talk the same, we don’t think alike, we operate at different speeds, and we share few social conventions. Nor are brokers and traders chosen for communication skills with the farm public - no easy task for anyone. My own experience is that I have not made trades simply because I didn’t want to deal with my broker. This is my problem, but he is the one who lost a commission.

For example, brokers live mayfly lives, compressing their real existence into the trading hours.  Every one of those minutes is important and must be employed to advantage.  As a result, speech is terse, impatience ever-present, and jargon commonplace.  Contrast this to a farm customer who normally has a ten-minute conversation warm-up period before addressing the business at hand; who is cramming a whole dozen or so trades into an entire year; who speaks producer-talk of bushels and rain rather than resistance points and margins.

The result of this interplanetary dialogue is enduring misunderstanding. This feeds outlandish rumors and stereotyping on both sides. Consider the “prairienoia” that surges through the farm community during low prices. Even well-informed leaders fall back onto tedious conspiracy theories concerning “them” at the CBOT and other exchanges. [My opinion is that traders are congenitally incapable of plotting together. Self-interest is not just a facet of their personalities, it is their personalities.]

The injection of a third party into my marketing scheme also provides a convenient scapegoat when things go wrong. When the blame shifts to the broker, my learning process stops. And sometimes brokers earn this blame.

Furthermore, I regard “open outcry” as 90% theater and 10% commerce. At the very least, I find no compelling argument that this quaint, labor-intensive tourist attraction provides any benefits that technology could not duplicate. As a farmer, I can empathize with this loss of a cherished way of life. Been there, done that. But what has not occurred to Chicago is that many of us trust computers to transact our business more than guys we don’t know. 

For producers and exchanges to do more and better business together requires dragging the pits out of the pits. Linking traders and the public with a common (computer) interface could bridge this cultural gap, widening the field of prospective customers for producers to transfer risk to and brokers to service.  Many regulatory issues, such as dual trading, become less troublesome. Brokerage house computers can control customer trading limits and other financial ground rules the same way VISA does. This is not rocket finance. In fact, the cost savings of direct account access and trading might actually make some business sense. The easier access could help compete for new liquidity from untapped sources, like Internet stock brokerages have. 

This possibility may be coming as soon as 1999. Member trading companies will have the technology to provide transparent real-time trading for their own customers. When I can log on when I want, manage my account, and execute trades, - just like stocks and mutual funds - I can guarantee I will become more active in the market. And I won’t have to learn Plutonian.

Many are called, few are chosen

September 1998

A young (30) farmer from Arkansas wrote me concerning remarks I had made about “paying your dues”. He explained his frustration with his inability to get his farming operation off the ground and expanding to the size he wanted. He also stressed that farming was his dream - one for which he had prepared and worked hard all his life.

I have no doubt as to the sincerity and passion of this young man. His words were eloquent and familiar. I wanted to encourage and reassure this young farmer and others like him that things would work out. And that could well occur. But it would be both patronizing and an act of disrespect to avoid some harder issues.

First, “wanting” is no longer enough. Popular athletic jargon has raised “wanting” to an aerobic virtue. (“He just didn’t want it bad enough!”) Nevertheless, “All I’ve ever wanted to do is farm” repeated fervently, has little bearing on survival. There are millions of young people with intense career dreams - astronaut, pediatrician, actor, politician, executive - who will never overcome the odds to live the only life they think can bring satisfaction. Furthermore, becoming a full-time farmer may be more difficult than any career just mentioned. 

Consider how few slots there are. Fewer than 300,000 farms gross over $100,000 - hardly a luxurious living. This is half the number of physicians, and one-third the number of lawyers in America! (Somehow this fact always disturbs me.) Deciding that one particular style of farming is the sole acceptable future is a mistake. Our industry sanctions this as the proper attitude for farm hopefuls, but it can mislead many to bitter disappointment. Farming is no longer an occupation of last resort or for those who simply don’t choose another.

Second, farm sizes and land ownership patterns make farming an “insider game”. Many are outraged at this statement, but few dispute it. Without strong extended family backing, the possibility for a successful farm career tends to hinge on a “break”. While such good fortune occurs, the vast majority of farmers are in the positions they enjoy because of what their grandparents and parents accomplished and passed on. Our industry has a strangely bipolar view of this. While lobbying for policies to ensure family succession (estate tax elimination), we decry the inability for other young farmers to get a start, ignoring the obvious contradiction.

Third, luck plays a role. It is not fair, of course, but that is the wonderful thing about happenstance. While life is unfair, it also tends to balance out. Don’t ignore the other breaks you may get by deciding what kind of good fortune you will accept.

Finally, farming is not the pinnacle of existence that we tend to portray it. Being a farmer has many positives, but so do thousands of other careers. Inability to achieve a career as a farmer can be a sharp disappointment, but it certainly does not brand you as a failure. Who faults the star collegiate because he did not make the NBA? Remember, magazines publish success stories. Most appealing are the “Hoosiers” stories of overcoming the odds. The odds are still accurate however, and command respect.

On a practical note, I would offer these words to young farmers whose careers seem to be going nowhere. First, are you tracking your progress by internal yardsticks rather than your envied classmate/neighbor? Do you have hard numbers that indicate any progress, however slow, toward your goal? If not, and you have 7-12 years in the saddle, gather your family and consider whether your dream is displacing theirs, and whether you are sacrificing happiness for stubbornness.

Second, can you formulate any credible scenario where things improve in the future? For instance, will you inherit or take over ground (and when?) or will retirement open slots for which you have a chance? Is your future dependent on a shift in government policy or social attitudes? Time could be your scarcest asset. Decide on a “drop-dead” date. 

Third, if your farm is not at least contributing equally with off-farm (especially spouse) income, rethink your goals. If you work elsewhere, play the cards you are dealt, and take the rewards from the other career you are building. Consider a delayed entry into full-time farming after the advanced age of 40 or so.

Single-minded devotion to one narrow career vision can result in missing golden opportunities for fulfillment just because they didn’t look exactly like your detailed fantasies. It may well be that the future of farming, and the farmers themselves, will look markedly different than now. In fact, your group may redefine midsize farming. But in order to do that, your goal must be something other than being “just like Dad”.

Farming is now a career of such desirability that the selection process is both rigorous and continuous throughout your tenure. Those who do not thank God each day they farm need to look hard into the hearts of those who are denied the opportunity.

A line in the dirt

August 1998

The farming profession has been struggling for years to ignore a growing polarization of our membership based on size. The big-small split can no longer be ignored, however. Unfortunately, talking openly about the differences between large operators and smaller farms inevitably deals with sensitive emotional issues not just of economics, but basic social values.

The demarcation between large and small has been vaguely drawn. Some have used $100,000 gross income, which gives a split of about 83% below and 17% above. The most recent line in the dirt has been defined by the Report from the Commission on Small Farms, which draws an arbitrary division at $250,000 gross farm income. This makes 6% of us “Large” farms. The kicker is this one-in-fifteen minority receives over half the gross farm receipts. The necessary ingredients are now in place for incendiary rhetoric and populist actions to redress what many see as the basic imbalance and, therefore, injustice, of this divergence.

This is exactly the issue many of us in the upper group don’t want to deal with. The broad principles of equality and fair play are ingrained into most all Americans, and we are not exceptions. Few of us consider ourselves as part of an economic elite, but in the eyes of many of our neighbors, as well, apparently, as our government, we are. Nor can we pretend to be just plain folks, when we have worked for generations to become exactly the opposite.

Part of our discomfort centers on the well-worn prejudice against The Big and Rich - defined as everyone bigger and richer than we are, of course. Since we have always been happy to ascribe all manner of evil intent and scurrilous behavior to these scoundrels, we certainly don’t want to be numbered among them now when we’ve gotten our own act together.

But does size carry with it fixed moral qualities? Maybe we are still essentially the same people we have always been, just more successful.  And if success necessarily corrupts, perhaps it’s time we warned those who are working diligently to be successful.

It could also be that the same virtues admired in “small” farmers - honesty, industry, cooperation, etc. - are the reasons we are now “big” farmers. What did we expect - that the personal values we preach would simply keep us even, or are they truly the keys to upward mobility?

My own conclusion from studying those above me on the ladder of success is they have achieved because of the nobler qualities they brought to bear on the problems of this work, not because they were more ruthless than their competitors. Uncooperative strategies may work in the short run (10-20 years), but will not withstand the abrasion of time. Virtue is truly its own reward, but it frequently makes other rewards possible as well.

Therefore it is important in the upcoming debate that large producers address the moral arguments as well the economic. Enduring success happens because of right behavior, not despite it. Nor is it arrogance or conceit to refuse to be cast as the “heavy” in a staged policy melodrama. While silence has been the seemingly gracious response to those who challenge the ethics of large farms, such a response allows the presumption of guilt to appear as fact in many minds, which takes a toll on agriculture’s public image, as well as our own self-image.

The truth is that there is no linkage to ethical behavior and farm size. This straw man argument is actually an effort for something other than personal competence to decide how America’s farms should be operated - if you can’t compete in open commerce, try to get the rules fixed in your favor. Hence, I predict that means-testing, targeting, and other economic discrimination will be suggested over the upcoming years before 2001. 

It won’t change the eventual outcome, however, as our cousins in Europe are finding out. Neither will it prevent the transfer of production to those areas, such as South America, that realize individual initiative should be fostered as the historically best way to produce efficiently. The geography of our land, the cultural heritage of our people, and the historical freedoms of our country are the reasons that large farms prosper in appropriate areas like mine (Central IL). To skew the economic equation to get a different answer will require modifying all these elements. 

Small farms are, and always will be an integral part of American agriculture. It may be they will not be competitive everywhere or guaranteed for everyone. To deconstruct American agriculture to some pastoral ideal will mean riding roughshod over individual rights and seizing what hardworking families have built over generations. 

The point is that the success of others in agriculture insures the opportunity for our success. When we discriminate against so-called large farms, we jeopardize our own future possibilities. 

Friday, July 3, 2015

A change of command
(Part 2 of 2)

April 1998

Like other events that only occur once in your life, farm succession can be hampered by a feeling of “Where to begin?” or, “Now what?”. My early career training in the military gave me a different model that might help. Farm succession has many similarities to a military change-of-command. The actual process could proceed as follows: 

Step 1: “I am ready to relieve you.”

You think so? It has been my experience that sons are born ready to replace their fathers, and frequently learn later that they weren’t quite as prepared as they thought. 
  • Relief is initiated by the oncoming watch, or the son. Many mid-career farmers feel they are ready to take over, and share this conviction with everyone in the community except their fathers. Perhaps their situation is perversely logical. If you cannot steel yourself enough to declare your own self-confidence to your predecessor, you may not be ready for control.
  • Are you really ready to relieve this watch? Can you make decisions? Have you a record of meeting responsibilities and fulfilling commitments? Are you willing to be held accountable as the one in charge?
  • Are there things that the father alone knows? Can you deal with a crisis? A quick test is if you can run the farm while your dad is on vacation without calling him. 
  • Are you established professionally? Have you always depended on Dad for “contacts”, information and public relations? Do you have any professional identity other than “John’s  oldest boy”?
Step 2: “I am ready to be relieved.”

This statement is the reply to the oncoming watch from the watchstander. It doesn’t merely mean “I’m tired”, but signals a number of preparations have been made:
  • The successor is ready. One of my submarine captains told me his highest duty was to train future captains.  
  • Pick a time of relative steadiness. Obviously the middle of harvest is not a good time, but neither is during a divorce, an audit or family feud.
  • The paperwork is up to date. For a farm, records are becoming critically important. You aren’t ready to be relieved if you can’t find the top of your desk.
  • An accounting has been prepared. If the transition involves financial transactions, they should be executed now, not at some vague date in the future.
  • This statement means a decision to step aside has been reached and will be followed through. It implies a commitment to the change and satisfaction with your successor. 
Step 3: “I relieve you.”

With these words, the successor lifts the burden of responsibility onto his own shoulders. No longer can he think only of himself, but of the good of the farm, until he is relieved in turn.

If you are the oncoming farmer, make sure you understand the nature of your agreement. This moment will change your life and your predecessor’s. The privilege to farm in America in 1998 is desperately sought by many. Even when taken seriously, farms often struggle to compete today. When treated lightly, a lack of commitment will hasten an unfortunate decline.

There is an implication here that can be overlooked. When you take command, you also take responsibility, which means, painfully put, everything is now, by definition, your fault. Don’t relieve the watch and then complain about the shape of the farm or blame mistakes on the “previous administration”. Authority and responsibility are two sides of the same coin. Especially in public, griping about the situation you have assumed, is both mean-spirited and self-destructive.

If I had my way, this step in the ritual would be accomplished in front of witnesses and family - like a wedding or baptism. I have attended naval changes-of-command and am always moved by the power of public promises to add depth of purpose to our lives. Not only the two participants, but all present can feel renewed by the triumph of the human spirit over time. 

Step 4: “I stand relieved. _____ has command.”

These two statements bring the process to a full and satisfactory conclusion. The first statement is an acknowledgment of a new status as former commander. It is an expression of, well, relief. More than a few times I was glad to make this statement after a particularly difficult watch.

But the most important part to me is the announcement of the new commander. When a son replaces you as the “farmer” make sure everyone who has any connection with the farm knows and respects the change. Tell the landlords, salesmen, customers, grain dealers, neighbors, etc. and then don’t slip back into old habits of operation.  Your replacement must be immediately and fully confirmed in status by your actions. 

Above all, remember the new operator has the same rights to select business associates as did you, even to the point of altering some long-standing relationships. Any working arrangement that is based solely on personal ties will now necessarily be exposed as such, and cannot be expected to survive.

This then, is my paradigm of succession. We have been privileged with lives of astonishing personal freedom. If for no other reason than to show our gratitude, we should be determined to make the most graceful and efficient exit possible.

Relieving the watch 
(Part 1 of 2)

March 1998

Succession on the farm is an emotional event for all involved. Because farmers strongly identify with their work, yielding control changes more than just who makes the decisions, it changes where we stand in our families and communities, what status we enjoy, and how much we are respected. Or so we often think.

The problem is becoming more pronounced because of recent developments in both the economics and culture of American agriculture. These circumstances have made traditional succession practices at best less effective, and at worst, threatening to the health of both the family and the farm.

First, succession is occurring later in farm careers. An anecdote is told of three old farmers talking at an auction. Two of them were classmates long ago. As they relive the past, the third farmer wanders off. One friend says to the other, “Bill, when are you going to retire? You and me are the same age and I quit six years ago. What are you waiting for?” His friend nods in the direction of the third elderly man standing nearby and says, “As soon as Dad quits, I can.”

When I tell this story at farm meetings, I watch the crowd. Some laugh. A few older farmers scowl. And many middle-aged farmers nod ever so slightly.

Farmers are living longer and healthier than ever. The idea of stepping aside may not occur to them if they don’t feel old and worn out - and most don’t! Cabs, heated shops and similar amenities eliminate many former obstacles. Nature doesn’t end as many careers as it used to.

Second, farms are larger. Your farm has probably been forced to grow to be competitive and provide the expected living standards. In short, we are not talking about handing over the reins to the family mule, but the executive authority for a significant enterprise.

Third, a successful farm is no small feat today, and current operators feel a justifiable pride of  achievement in their businesses. This close association unfortunately leads many to wonder how it could possibly continue without them in control. While infuriatingly patronizing to following generations, it is not a mean-spirited motive for maintaining control as long as possible. 

Above all, “stepping down” is seen as precisely that - a downward move in status, an acceptance of a lesser position. When this also involves yielding that authority to someone whose mistakes you know by heart (your child) the decision seems almost foolish. The natural tension between successive generations doesn’t help either. 

Letting go of control can also be interpreted as confirming publicly what you probably have been suspecting - you are slowing down or even losing capabilities. Even if you don’t think that, maybe you feel others will. 

Making any change at all is easy to postpone. Personal power over your life usually is greatest the day before you quit. So nobody can tell you to retire, often not even your doctor or spouse.

These subtle factors often complicate farm succession more than capital gains or buyout valuations. When the feelings of more family members are added (especially those off-farm), the succession process can bog down.

Maybe there is a better way for parents and children to go about this necessary step. More than a matter of contracts, agreements and structure, perhaps a different philosophical model to follow could help.

Philosophical considerations do matter. How we think about values in this profession impacts what we do - from buying land to cash rent to confinement livestock. And these are the very issues that seem to be giving us great difficulty as a profession.

Transferring executive power to a son or daughter need not be about manly vigor, or family respect, or mental capacity, or any of a dozen other “selfish steam” issues. It is about placing the enormous responsibilities of running a successful operation on the most capable shoulders. It is also about understanding our place in time, family and community.

As a young man in the Navy, I learned a different process to transfer command - the change of command for ship captains. Rather than a power struggle, the change was a matter of keeping the best people in the right places. When I think of farm succession, I like to compare it to this change: Relieving the Watch

It is the image of the oncoming, fresh watchstander bringing relief from duty, not seizing control, that I find most compelling. It contains elements of honor, commitment, respect, and closure that are often missing. 

Most crucial is a commitment to the “ship”. I used to think the analog was the farm - that preserving the farm operation was the highest goal. I have learned otherwise: that in order to preserve a family farm, you must first preserve the family. 

If committed to this common goal, the transition - relieving the watch - can be a celebrated milestone for all, viewed positively by the family and community. The actual process I will outline in another column.

Paying your dues

February 1998

Nobody likes to wait in line, especially young farming entrepreneurs. But early in our careers, “rules of seniority” seem to retard our efforts to get ahead.
Older farmers often know things before their younger counterparts, for instance - who is retiring, or what land might be for sale at the right price. They know where the off-farm heirs live and how to talk to them. They know which dealers will give special deals and how to get them.

Worse still, geezers get special treatment. Even when they aren’t great farmers, they rarely lose rented land, and then only after extraordinary efforts to avoid unpleasantness. If you are young and clearly more efficient, at least in your own eyes, it seems grossly unjust. The result is that farmers in their early career frequently lapse into a defensive whine about their apparent lack of professional progress. I know I did.

My problem was that I had not learned the importance of “time in the ranks” to create a shared history among peers. Although instinctively I honored this concept by how I chose friends, and who I trusted, it had never dawned on me that it was a legitimate business factor. After all, in business the only thing that matters is the bottom line, right? Not to be guided by cold hard economic logic was almost un-American.

There are considerations that can modify this pursuit of profit that may not be apparent early on. These seemingly “soft” arguments can become iron rules of behavior, and are surprisingly logical when all the information (i.e. history) is known.

One big area of seemingly irrational action is the management of land. Always remember that few individual owners are investors in farmland as the best possible choice for return on their money. Any casual observer can notice the stock market would have been a much better choice over the last several years.

Why do people hold land, then? Inertia, in many cases. Their family owned it, and selling it is more change than they may want late in life (and most land is in “senior” hands). There may be strong emotional ties that outsiders can only guess at. At any rate, purely numeric arguments may or may not carry a great weight with many owners.

This is not as silly as it seems. Knee-jerk reacting to economic signals is no sure path to success, and a pile of money may not be what brings the most satisfaction to an already wealthy population like the US.

If professional prowess and economic superiority are not to be the guiding factors for advancement as a farmer, what is? In my opinion, you are.

Every day, by every word and action, you are compiling a resume that impacts your professional success. Some call this paying your dues, but that implies a meaningless penance. Your experiences in your community and beyond can earn you the advantages that you envy in older generations. There are some things you can do to speed this process.
  1. At every chance, cross generation lines. If you spend all your time with people your age, not only will you remain relatively unknown to many, but you will miss the chance to develop a rapport with older people. This has been one of the great advantages of community involvement - churches, farm organizations, local government, etc. Of course, being in a position to demonstrate your abilities requires some abilities to demonstrate or, even more importantly, the willingness to listen and learn some.
  1. Similarly, trust is one of the valuable business assets that only time can bestow. In order to encourage people to trust you with information or assets, you must invest time with them. My nephew is a bright young lawyer at a large Chicago firm. It was made clear to him early on that the most important role of a partner is not to dazzle with legal skills, but to acquire business. This is done client by client, building a foundation of trust based on personal experiences. While big money can overwhelm this process occasionally, it still remains how most business in America, and especially abroad, is done.
  1. Utilize one of youth’s advantages: the willingness to try. Take advantage of all kinds of opportunities to learn.  There is also a strange skill that develops after moderate experience - knowing what an opportunity looks like. I have never seen a good opportunity that was obvious. After chasing a few such, I have learned that spotting business opportunities is largely a function of imagining what things can become with you in the picture. Until you have some idea of what you can do, via experiences, it is difficult to picture outcomes far enough in advance to beat the competition.
  1. Finally, prepare for good luck. Everyone plans for disasters, but few realize handling fortunate events can be optimized. Almost every successful farm career is interwoven with some good luck that was managed well. Expect your share.

Above all, listen to the ‘Stones.  Time is on your side.

Nobody roots for Goliath

January 1998

Wilt Chamberlain was right. However, I had always found this quote to be a teensy bit self-pitying until a few months ago.

I was at the local tractor dealer buying parts. Another man at the end of the counter was talking to the dealer. He was a typical-looking guy, wearing standard farmer clothing. I nodded when he looked at me, but could not place him at all.

Then the parts guy whispered to me, “That’s ____ ____” - one of the Cash-Rent, Big-Operator  Boogeymen who were invading local communities like Visigoths. Involuntarily I looked at him again, trying to see what Pure Evil looked like.

Amazingly, he had changed. He no longer looked commonplace. How had I missed the scheming expression of contempt on his surly face? Now that I knew who he was, I knew how he should look.
I was aware of the pettiness of my reaction, but the threat that he represented to me and mine somehow justified it in my mind. While not one of my better moments, my  response was nearly automatic, surprising me with its speed and intensity.

The “Big Operator Story” is now an almost obligatory part of conversations in my area. Because our topography lends itself to seemingly unbounded economies of scale, both “outsiders” and locals are ramping up into sizable farm operations. They are also exerting intense pressure on competitors via strong rental bids.

I farm 1100 acres and frankly, want to keep farming them. Regardless of my intellectual or moral commitments to individual rights, when push comes to shove, those values struggle to compete with self-interest. But when I analyzed my thoughts that day as I looked at the stranger, I was struck by the illogic of some of my own ambitions.

Like many medium-sized farms, Jan and I have always been interested in expanding. Nonetheless, I am beginning to see some hidden costs that can accompany large-scale growth. I still support open competition and the rights of individuals to grow professionally. However, there are a few odd consequences that seem to accompany swift growth. 

Rapid success puts strains on your friendships within the profession. Not only can I (shamefully) dislike an a outsider for no reason other than his operation size, it is also easy to envy an old friend who has grown while I have not.

These unhappy emotions can make farmers uncomfortable around successful comrades. Through no fault of their own, their success demands comparison to yours, it seems. Rather than be seen to be small-minded, it is frequently easier to avoid winners. Once that path is chosen, even long-standing friendships can wither from neglect.

This may not be unreasonable. Most of us have experienced an uncomfortable moment between friends of differing incomes. If your growth raises your consumption patterns above most of your compatriots, it is hardly surprising that social bonds dissolve. As farm operations diverge, less common ground is shared. Problems are unshared, perspectives are irrelevant. For instance, how do you join in a conversation on combine repair when you trade yearly and use only dealer warranty support?

The result is that 900 lb. gorillas seldom mix well with the rest of the zoo. In fact, in a conversation with a 5000 acre operator I met at a national meeting, he opined that sometimes big operators fit in well only with other big operators.  A similar solution is to have most of your friends outside the profession.

Large operators can become invisible as employees become the public image of the operation. One large farmer near me hired real jerks who hogged the road with the huge equipment, slopped over boundary lines, and let the shattercane spread. I had no reason not to dislike the guy.

In the “home” community large operator success can bring dividends to others (dealers, coops, vendors). In those areas where they simply farm the ground, they bring little and take away a lot. Many residents resent it. A curious solution to this problem is to have large operators based in many communities, effectively canceling each other out.

None of these problems imply that the large operator is acting improperly or unethically. Neither, however, are those who must compete. At least in my area, based largely in cash grain, large operator success necessarily means less success for others - there are only so many acres to farm.

While our profession strains to maintain a genteel quality to this Darwinian struggle, it is brutally serious to all. Therefore, if you think that professional success will in itself bring respect and admiration from competitors, you may be disillusioned.

But does it matter what others think? If , through growth, your operation has generated desired wealth, who cares, right? This answer gets more vague as our professional community shrinks and rural social structure fades. One thing I do know, however, is working in an indifferent, if not hostile, environment is a joyless shadow of what farming can be. Efforts to include as many others as possible in growth could be more humanitarian for all.
Of course, no farmer plans to be unpopular and disrespected. However, it may be a likely consequence, unfair and unrelated to your personal character. This is as much a price for growth as hard work, sacrifice, or risk. Realizing this fact up front, bearing it with good grace, and taking advantage of every opportunity to give back may be the most effective response.

Farming is outgrowing its culture in some ways. Those who are leading this trend are best able to contrive replacement institutions - social bonds,  professional associations, community support mechanisms, etc. - or find some way to help the existing structures evolve to cope. Failure to do so may wring much of the pleasure out of success, and eventually undermine it. 

Board games

December 1997

Sooner or later it happens to most all reasonably successful (or durable) farmers - you are asked to serve on a board of directors for a coop, church, organization or governmental body. While this may be a sought-after personal goal, it could also be the result of not making your escape fast enough.

I have served on a variety of boards, both with and without other farmers. While there are many similarities, I have found “farmer boards” often possess certain common characteristics. Many of these mannerisms are rooted in tradition or habit, some are reflections of our profession, and a few are almost silly. If you are involved in a board, see if these sound familiar. If you could be serving in the future, maybe this can help you prepare.

Nodding Heads. Often groups of farmers prefer to operate by consensus, or to put it another way, “getting all the heads nodding”. Majority rule (an actual counted vote) is avoided when possible. Consensus has some advantages, but primarily it avoids any board member feeling like he or she has “lost” after a vote.

The big disadvantage to this mode of decision-making is it can require enormous amounts of time. This is the first thing to consider if board meetings tend to be marathon events. It is also highly dependent on a strong sense of community to be effective - where “getting along” is the highest good. Reliance on consensus also means the inevitable disagreements, however rare, become big issues.
Lately, many farmer boards have been forced away from consensus by time constraints and the growing individuality of members. However, once a handful of votes are taken, most boards adapt well to majority rule.

Supreme Court Syndrome.  The power of precedent can become overwhelming on farmer boards. This means not just doing it “the way we always have done”, but the compulsion to scrupulous consistency. It is often seen as unfair or a descent into operational relativism not to repeat identical responses to what seems like identical situations. For instance, if one employee is allowed to attend a conference, then any other employee must be allowed to attend any other conference.

This seemingly democratic ideal unfortunately ignores one key aspect of such decisions: all situations are not equal - in this case, some conferences are more valuable than others. Precedent as an absolute rule is actually a way to escape the responsibility of deciding - something many boards will go to great lengths to do.

Shop ‘til You Drop.  The most feared items on any agenda, in my opinion, are the purchase approvals. Usually expenditures above a certain limit require board approval, at which time personal preference and brand loyalty will ignite endless debate. There are three items that farmer members especially savor considering: pickups, copiers, and computers.

In the first case, every farmer is an expert on pickups. People who haven’t spoken in months feel moved to argue passionately about this one area of self-assured expertise. For copiers, this decision turns into a hate-fest for an entire industry. No copier has ever worked like it was supposed to, all are used twice as much as estimated, and almost none have proved reliable. We don’t want to buy any of them, but we know we have to. And when it comes to computers, the board will split into those who hate them and those who love them. Not much common ground.  Give me two hours of a dynamic CPA droning on with carefully chosen, liability-deflecting phrases about an annual audit any day.

Too Close For Comfort. Recent scandals in the military have revived an archaic term: fraternization. This practice of blending personal and professional relationships can cause big problems. On many small boards, especially in rural communities, board officers, specifically the president, often fail to maintain a respectful distance between themselves and the CEO or manager. Farmers are friendly people, and prefer to operate in an atmosphere of camaraderie, at least until something goes wrong.

Boards of directors in general have two great responsibilities: hiring and managing the CEO, and setting policy. Allowing a personal friendship to confuse the first obligation is professionally harmful to the manager, as well a dereliction of duty by the officer. Supervising a close friend is a difficult, if not impossible task, and subsequent lack of oversight allows sloppy practices to grow. Long term officers and staff must struggle to avoid this issue.

How Much? Farmer boards react differently than many other boards to manager salary discussions. Since many of us have no experience with annual compensation reviews, we struggle to put a dollar value on manager services.
There is also the titillation of talking about something most of us consider a deep secret: how much money you make. More amazing is the routine tendency to tie compensation to what kind of crop year it’s been.  Attitudes like these require strong leadership from the chair to prevent wandering into total irrelevancy and disaffecting employees.

Per diem.  Although farmers claim their time is valuable, few are willing to stand up and support board compensation. In truth, fair compensation is impossible, but some recognition of the sacrifice is important for morale.

All these comments may make it seem like farmers are poor board members. Quite the contrary. These foibles are simply the ones farmers often bring to the boardroom - other members have their own peculiar quirks. Recognizing them as a product of our way of life, rather than an unchangeable nature can help us to be more effective board members.

Permission to fail

November 1997

I stood in the hot sun looking at the rolled corn leaves and withered tassels. It seemed impossible that it was happening. For one thing, it wasn’t in my plan for the farm this year - a carefully drawn up, logically thought out roadmap of how this year was supposed to go. No mention of a drought at all.

It was my first real experience with a weather catastrophe. As a young, confident farmer I had all of five seasons under my belt and felt pretty sure I could handle whatever came down the road.
But 1980 was not like any easily remembered year. With no personal drought history, everything that happened to me that summer was new and well, horrifying. The heat was unbearable, and rains did not come. For east-central Illinois it was positively unthinkable. This was reclaimed swamp, for crying our loud!

But it did happen. The summer wore on and I wore down. I began thinking myself into corners and blind alleys where mental monsters lurked. Slowly it dawned on me. I was failing at my work.
First of all, it wasn’t fair. I work hard. I don’t do bad things. I don’t make terrible decisions or break rules. I always assumed that would be enough.

As hard as the recognition of looming disaster was, however, it was the accompanying emotion that really shocked me: I was afraid.

Don’t get me wrong. I’ve been afraid before. But previously those events were confined to events and physical threats, like tax audits or horses. This time the fear not only lasted, but grew.

What if I ... to put it bluntly, FAILED? I became obsessed with the idea, aghast at the possibility, and unable to see how to avoid it. Worst of all, I felt like such a weenie for being so pathetic and fearful. What was wrong with me?

One afternoon that August, my father and I were working in the feedlot when I asked him whether he had ever been through anything like this. His answer was a familiar response involving “1936 or 1934”, “eleven days over 100°”, “open-pollinated corn”, etc. - a story I had heard too many times, I thought. Then followed the gruff assurances that he’s seen worse than this and things will work out. Standard father-talk. 

Then I realized I hadn’t asked the right question. “Not the drought and crops, Dad”, I interrupted, “Were you ever afraid you were going to fail?”

He looked at me strangely for a long moment. Then for the first time in my life, he spoke in a voice of a fellow farmer rather than a father. Scanning an unseen horizon he quietly relived a powerful memory.

“Once in the 50s”, he said, “when you four kids were little, we had some kind of disease in our feeder pigs and lost darn near all of them. Since I counted on them to provide money until the beans were harvested, we soon ran out of cash.”

“One morning in August, your mother came to me and said quietly, ‘John, there isn’t any food in the house’. And then it hit me like a ton of bricks: I was going to fail”

He turned and looked me in the eye, “It didn’t matter that the situation was not hopeless - I felt like it was. And I was afraid because I had no answers.”

He went on to tell me how things worked out, and how in retrospect that particular experience wasn’t the absolute worst in his life, just the first such, but that part of his story wasn’t what stayed with me.
By sharing the fact that he too had known the debilitating and humiliating effects of the fear of failure, my father validated my own feelings. Far from lowering my opinion of him, he rose several notches in my estimation. Such admissions are not easy to make.

My sense of relief was deep-felt. If Dad had gone through this and shared the same doubts, two logical conclusions could be drawn: 1) there wasn’t anything “wrong” with me for being afraid, and 2) it was likely that I could survive - just like he did - even though right now I wasn’t too sure exactly how.

Obviously I did. But that incident in my life changed the way I think about failure and success, and the coping with its attendant fear. I became a sort of “student of failure”, analyzing why things went wrong and studying people who had failed as well as succeeded. 

I discovered that failure is almost always worse in contemplation than actuality. It is also heavily linked to our value system that makes winning, “not just everything, but the only thing”, as Coach Lombardi put it.

In fact, one often unexamined aspect of the new fascination with “risk” is what happens when the risks win. And it happens, and will happen, I believe, more often to more farmers. Some will not fully recover from a failure of some type, at least not with their ego and confidence intact. Part of the reason is that failure is often seen as an unallowable outcome. Some performance standard or moral scale by which we measure our lives has no concession for a failure, no room for honorable defeat. Most likely this gauge is a father, or older family member.

What I got from my Dad that day was worth more than all the advice and training he had given me before. I got permission to fail, and in doing so, he gave me the greatest tool to recover from mistakes. Since then I have found this same idea embraced by others I admire.

In fact, one of my favorite quotes from Theodore Roosevelt contains these words: “...I would rather fail while daring greatly, than be numbered among the gray and timid souls who neither suffer much nor enjoy much.”

I don’t enjoy failing, of course. But at least the prospect no longer paralyzes me with fear, and that alone can avert most failure.

Getting into the game

October 1997

Lately I've noticed increased concern at several levels in our industry about the apparent lack of young people choosing farming as a career. Efforts are underway to give younger farmers special credit arrangements, to identify farmers interested in retiring, and to help young families manage the crucial first years. 

It has always seemed to me that the perceived lack of young farmers was actually a surplus of older farmers. Look at it statistically: as farmers enjoy longer and healthier lives, the average operator age could rise, even with a normal inflow of new blood. Perhaps to recruit the best new farmers possible, we should consider ways to increase turnover in the ranks.

When careers end, other careers can begin. With an essentially fixed land base, there is room for only so many farmers, especially with farm size expansion. To free up land is to open opportunities. I realize much of the available ground goes to established farmers rather than new farmers, and for good reason, but often this helps mid-career farmers increase their base to bring in children. A reasonable treatment of capital gains, such as a way to roll the final sale proceeds into an IRA-like investment could remove a barrier. 

More importantly, however, it may be time to consider retirement as a commendable step in the professional life of a farmer. As long as we consider the idea of working until we drop in the harness as THE way to go, we will not fully realize the power of timely retirement to regenerate our industry. While I have known many farmers who swear they could never retire (“I’ve always got to have work to do!”), I have met very few who were sorry they actually retired. In fact, most were surprised by how much they enjoyed retirement. A greater awareness of increased life expectancy and more planning to not just cope, but take full advantage of these years, could do much to reshape traditional retirement views. I'm not suggesting a hard "65 and you're out" rule, but rethinking our attitude toward farming. Remaining in a business just because you haven't planned for anything else may not serve you, your family, or your industry best.

You can get here from about anywhere.  I have often grown slightly impatient with the career path fixation of FFA-Ag College-Farm with Dad-Rent Neighbor's Farm. Current operator resumes show clearly the widely varied backgrounds that can produce a successful career. These nontraditional entrants could bring a much wider range of skills and experiences to our communities if we gave value to other types of work and education. I obviously carry this conviction because I am an engineer. I have neighbors with similarly novel career paths. These unique skills also serve our community churches, school boards, and local organizations well.  

By encouraging alternative career paths, not only do we increase the number of possible entrants, we can also help stabilize young families' incomes with the addition of desirable job skills, thus enhancing off-farm employment possibilities during the rugged early years. Outside income plays an increasingly important role in starting young farm families. We need to fully recognize and honor that contribution. Too, we could stop being startled by the possibility of a daughter farming while her husband pursues an off-farm career.

Elderly rookies. I think one real sleeper trend could be second-career farmers. If your children show no immediate signs of returning, wait a while. I have noticed more than a few couples in their 30s and 40s coming back to farm after successful off-farm careers. Often they are looking for a better lifestyle. The unlikeness of a 40-year career in today's flexible labor market means that many young adults will have multiple “careers”. While not “young” farmers, such new blood can be just as invigorating to agriculture.

Polish our recruiting campaign. If you would listen to the average farmer conversation, I don't know why any young person would want to farm anyway. The same guy that moans and groans about how bad things are usually ends up complaining how his kids don't want to come back to farm with him. Heck, I don't want to farm with him either. If we have no enthusiasm for our profession or reasonable hopes for the future, we will probably pass this on. It is also unfortunate that many farm organizations can only seem to use predictions of disaster to move their membership to action.  After you've heard for years how bad things are, and how much worse they may get, it starts to shape your thinking. This is not an attractive recruiting picture.

Expand the idea of family. I'm in my (very) late forties and I am part of the group that is largely responsible for today's entering farmers. I know two things:  1.) We didn't manufacture as many offspring as previous generations and 2.) Our children are more familiar with life off the farm than I ever was at their age. That there is a high loss rate to non-farm careers can be expected just from increased familiarity with the possibilities. We may not have a successor in our immediate family to recruit. Why not consider your neighbor's son/daughter who might not have a chance otherwise, before seeking the highest bidder?

Entry into our profession has always varied with conditions on and off the farm. Some things, however, are under our control. They just may require some effort to embrace a new idea or two. Always remember that we ourselves are replacements for earlier farmers. We owe them a duty to choose successors as brilliantly and responsibly as they did.  

The dwindling herd

September 1997

This spring I was faced with a difficult (for me) decision: to hoe or not to hoe. After planting my corn acres in relatively good conditions (especially compared to the past few years), a typical spring thunderstorm dumped .75” of rain on my fields in about 15 minutes.

The result was unpleasantly familiar. A mild crust formed on the soil that would represent no problem to a vigorously growing crop, but in Illinois, 1997 would not be remembered as a spring for vigorous growth. I walked over the fields, digging and looking, trying to form some plan of action. Finally, with some reluctance, I hooked up to my rotary hoe.

In our soils, rotary hoes are a tool both embraced and shunned. I have never been a big proponent of their use, based largely on the personal sentiment that, like chiropractors, they seem to work best for those who believe in them. I do not. Would I do more harm than good? Am I panicking? Is it too early?

Doubts continued to plague me for some time that afternoon as I worked, until on the horizon, I saw another fast-moving cloud of dust that could only be raised by another hoe. By late afternoon, I could see two more neighbors hoeing. 

My relief was palpable. The fact that my colleagues (and I knew, of course, who they were by the machinery and location) had made a similar decision added badly needed justification to my own. The familiar feeling that “if the other guys are doing it, I can’t be too far off” flooded me with renewed confidence.

Then it began to dawn on me. I don’t have that feeling much any more. As my farm, along with everyone else’s, has evolved down an individual path, the lack of farm-to-farm similarity makes comparisons difficult. What may be a good idea for my mode of farming will not be a good idea for my neighbor.

Furthermore, the urge to conform to some group average did not fit well with my self-image of the rugged individualist, making Spock-like rational decisions. So while I was glad to see Marc hoeing, I was embarrassed to be glad.

We used to be a community of almost identical farmers using identical tools to grow identical crops. Under such constraints, there was a certain logic to going along with the crowd. At least, there was some cover to hide under when things went wrong. Landlords, like predators, had a harder time picking on the guys in the center of the herd. On the positive side, since the largest repository of farm knowledge was held in the form of experiences and memories, one effective way of tapping this knowledge was to follow the lead of the veterans. The accumulated body of wisdom of the group had great validity during times of slower change.

Unfortunately for tradition, the pace of change has increased markedly in agriculture.  As a result, the herd has gone off in a dozen different directions. To find a truly valid comparison for my farm would mean matching up tillage, machinery, chemicals, crops, fertilization, and other factors to be valid. Then too, soil types and weather would have to be the same. 

There are other problems to finding a herd to belong to. First of all, there are fewer farmers now in my area. Then we separate those with similar tillage. I no-till soybeans, but some-till corn (my own definition of using a finisher). Glancing around to see if I should be planting, for instance, means I had better be looking at somebody with identical residue and soil before taking comfort with their actions. If I was no-tilling corn on my ground, in comparison, I would have to consciously not be part of the herd when starting to plant corn.

It gets more complicated. When should I be spraying post-emergence on soybeans? This depends now on which of a jillion products in what combinations on what row-width beans you have. Waiting until Joe gets started may not have any relevance.

I could go on detailing the uniqueness of my operation, but this is a cerebral, not gut, analysis. What I want to feel is some relief from faltering self-confidence that has previously been gained by observing others. Whether valid or not, we are not yet beyond making competitive comparisons with our neighbors.

It would seem I’ve lost my herd to hide in. Some new way of judging my performance on the fly will have to be found to replace the practice of shooting for an average, or middle-of-the-pack position. This step necessarily produces an increased sense of isolation and personal responsibility.

Farming by traditional community guidelines was not always easy. The “accepted” practices may have called for costs you didn’t feel necessary, for example. But it at least reduced the number of difficult decisions made alone. It also reduced the amount of information (i.e. scouting, researching, asking, calculating, etc.) that you had to dig up. 

I had also thought I had moved beyond this type of peer pressure. At my age and stage of career, it should be no problem to make decisions solo. I was kidding myself. Luckily for me, however, I’ve learned to cheat the system.

By enlarging my “community”, to include friends and acquaintances far from Chrisman, I have effectively made a bigger herd to hang out with. In this larger group, I have found several farmers who farm in a similar manner, to whom I can compare my actions and results. It is quietly reassuring.

Nor is it all that illogical. The compulsion to be part of a group similar to myself has forced me to widen my vision, in the process gathering more information in more ways. This data in turn helps my decision-making process. It could be that - all jokes about waistlines aside - my herd may not be getting smaller, it’s just spreading out.

Farm program withdrawal

August 1997

As a child, I was made increasingly aware of the enemy of all I held dear - communism. This malevolent force ordered American priorities for everything from federal expenditures to movie stars, gave purpose to several pretty silly exercises such as bomb shelters, and culminated in the national heartache of Viet Nam. But then suddenly the communists weren’t there any more.

During my farming career, a similar force alternately enraged and confused me - the federal farm program. Especially since I participated in farm organization debates over proper farm policy, the farm program occupied much of my thinking and planning. Now it too is gone, for all practical purposes.

Oh sure, the checks still arrive twice a year. But the decoupled aspect of the current farm program means this event has no more significance to me than receiving a coop patronage check. On my farm at least, the federal government has largely melted from everyday existence. At least until 2002.

I have discovered, for instance, several intricate farm program spreadsheets and analyses that today seem curiously quaint, like corn rakes or checkwires. Nothing is as out of date as yesterday’s fashion. Reading a novel recently about farming during the 80’s, I came to a reverie-filled halt at the mention of PIK certificates. Viewed from a distance, the ideas seem as unattractive as some of the pants I was wearing at the time. Lime-green, bell-bottom farm policy.

Nevertheless, agriculture may be starting to miss this government interference in both subtle and obvious ways. Just like my friends in the Navy, I have learned that an old reliable enemy can create some old reliable ruts in which to live.

I have learned, for example, it is one thing to talk about volatility, another to live through it. Before the enactment of the 1995 Farm Bill, I was sure I was ready for such wild market action, gazing longingly at the peaks, and ignoring the valleys. The astonishing price swings of the last two years exposed my own market naiveté, as well as my thin veneer of stoicism. Since I didn’t bother to raise my marketing expertise to match production skills, the unbinding of market forces left me battered. But I have noticed lately some survival skills being forged, out of sheer necessity. 

Farmers aren’t the only ones affected by this abrupt loss. As the recurring surprises in acreage figures have demonstrated, forecasting what farmers are doing or going to do has just gotten a little trickier. It could be that as planting flexibility becomes less novel, even greater surprises may happen. The reliable hard data lost with annual sign-ups was the backbone for many an analysis by government and private pundits, who now see trends slightly less clearly. The idea of my farm possessing an air of mystery today does have a certain appeal, though. 

One of the harder hit segments of agriculture has been farm organizations. At a recent corn grower meeting several members complained that the meetings weren’t as exciting as they used to be. While they blamed poor organization and leadership (as usual), I suspect that the loss of the of farm program arguments is really to blame. Those debates were passionate, intricate, and personally meaningful. Often I have calculated my own farm program check amounts while the speakers were going at it. That kind of individual impact is hard to match with subjects like transportation, research, or even trade. 

Farm organizations also developed the unfortunate habit of engaging their membership constantly by calls to do battle with the government, not unlike the Pentagon vs. the Red Menace on Capitol Hill. With no farm program alarms, the attention of the farmer membership may be wandering. While there are many other legitimate policy issues on which to do battle, the old program was a favorite of the troops. 

Even farm media have felt the loss. Think of all the pages of articles, explanations, charts, tables, what-if scenarios, and the like that haven’t been published lately. Suddenly a significant amount of subject matter disappeared from the editors’ menu of story items. The farm program was such an ideal topic too. Laden with details and unintended consequences, provoking passionate interest in readers, and constantly being adjusted and debated, it was not just a story, but a journalistic career.

The greatest impact, of course, for farm program withdrawal is on those whose job it was to administer it. At the very top, the bailing out of ag committees by several members of Congress was like the rodents on the proverbial sinking ship. Likewise, the change in FCS offices is profound, at least from what I can tell by the few visits I have made there. There the wistful longing for a more complicated and hence, career enhancing, program is evident. In my local office, unnecessary certification is urged stridently, even though crop bases are defunct. The reason: “just in case the next bill resurrects old numbers”. My refusal to do so, explained by my wish to keep acreage bases dead, was received with noticeable coolness. Breaking up is hard to do, especially after such a long and close relationship.

It’s just that the farm program was a long term habit, like scratching when you wake up. What will be interesting will be to see how deeply ingrained this memory is in our collective mind in 2001, when the end is in sight. Think of the number of farmers whose careers will not have any experience with set-asides, bases, or target prices. Seven years is also a long time for us older guys. Who can say what sentiments we will entertain then? 

I just want to know what happened to all the time I should have saved not fussing about a farm program.