What if any businsess skills do farmers need?

In My Humble Opinion
1

When you imagine a farmer, do you ever envision them selling their goods? Probably not - you mainly imagine them working the land, raising their livestock, etc. At most, you may imagine the farmer loading some goods into a cart/truck and taking them to a market or county fair from time to time.

But in real life, how difficult is it for a farmer to get their produce/animal products into the supply chain? Is this something that sort of solves itself - I.E., everyone needs basic foodstuffs like milk, vegetables, beef, whatever, or does a farmer need to have any sales skills similar to those needed by any mainstream businessman in order to sell their wares and turn a profit?

Let’s say someone starts out as a farmer and establishes a farm. Assume for the sake of simplicity that this person has all the necessary skills for operating the farm. How easy or difficult would it be to begin placing the produce they grew and/or the meat and dairy products they produced on the market and where would they actually go in the modern world to do so? Would they just wait for someone to come to them? Spend time hanging around farmers’ markets? Or would they go around marketing their products in the same way for example Microsoft markets their software (I’ve never seen any real marketing for a farm, so go figure) and worry that they will not find a place on the market due to better-known competition? I’ve never heard of farmers having to deal with such things. Do they in actual fact?

2

I’m not a farmer or expert, but I’ve done some work on the financial side. From that limited perspective, I know the very largest farms will employ brokers to do the selling, or be part of a co-operative like cranberry growers (not sure if that’s still a thing, but Ocean Spray seemed to control all the bogs around here before they all converted to golf courses).

For smaller farmers, even the little hobby farms, yes they have to do more work - farmer’s markets, or arrangements with grocery chains or restaurant chains. You can also go to some of the farms here and buy directly.

I thought you were going to ask more about technology and finance, I’d note that larger farms now use predictive models and technology from vendors to monitor their crops on a daily or even hourly basis. They’ll also buy crop insurance every year and spend a fair amount of time doing the math on prices & yields to figure out whether filing a claim is worth it.

3

I used to do a fair amount of work with grain farmers (corn, soybeans, wheat) as part of my job.

First of all, other than very small hobby farms, nearly all U.S. farmers do not sell directly to consumers (or if they do, it’s a small part of their business, at farmers’ markets, county fairs, and the like). They are selling to a processor, or (as is the case with dairy farms), they may be members of a co-operative. Either way, they hand off their crops/output to some sort of processor, which aggregates the output from many farms in order to produce what eventually winds up at the grocery store, and on your dinner table.

It may not be “sales skills,” per se, but successful farmers absolutely need a range of business skills. They enter into contracts to sell their crops (in this case, to an ag processing company, like ADM or Cargill), and as the prices of commodities (and in those contracts) go up and down, they have to weigh the cost/benefit to signing a contract today, or waiting to see if the prices go up.

Their materials (seed, fertilizer, etc.) and equipment (tractor, combine harvester, trucks, etc.) can be extremely expensive investments, and again, they have to weigh the cost of purchases versus the anticipated pay-out, or other options. A new variety of corn may have a higher yield, but the seed may be more expensive – will they get their investment back? Do they buy a new combine this year, or keep their fingers crossed that they can get one more year out of it? (A new combine costs about $300K-$500K, and despite the fact that they are only used for a few weeks out of the year, they can wear out in a decade or less.)

Every farmer I dealt with back then was very computer-savvy – they all had PCs in their houses (or barns), and they kept abreast of the contract prices, weather forecasts, etc. on a daily basis (if not even more often). They use GPS extensively, to track yield of their crops when they harvest, and then apply more or less fertilizer in different areas.

Also, most farm operations – even family farms – are bigger operations now than they were generations ago. With grain farming, the farmers pretty consistently told me that, in order to make their investments in equipment pay out, they had to farm a lot of acreage – minimum of at least 1200 acres (typically a mix of land that they actually owned, and land that they rented, often from what used to be other family farms, in which the family still owned the land, but the “farmer” in the family had retired or died).

And, all of that acreage is almost always dedicated to just one or two crops. Some farmers may do a mixture of things: I knew corn farmers who also grew an acre or two of vegetables, for example – but those secondary crops are either (a) a hobby, (b) something to sell at the local farmers’ market, or (c) for the personal consumption of the farmer and his/her family, rather than being a major focus of their business. The old-school idea of a family farm, where one farm might have a couple of dairy cows, some chickens, some vegetables, etc., doesn’t exist in large numbers any more in the U.S.

4

Good breakdown @kenobi_65 of what modern farmers go through.

I’m grew up in cornfield county Ohio and know many farmers, one of which is my BIL. In that area you don’t just decide one day to become a full time farmer, its something you are raised from early childhood to be. Spending time at farmers markets is something you do with your parents since before you can walk. In school you join the Future Farmers of America and 4H clubs where they teach about the latest farming techniques and have livestock competitions. As an adult you are part of a local co-op along with other farmers you grew to with. You buy, sell and rent land to people you know personally or through word of mouth recommendations. If you are succesfull you end up having a large family to support your farm busiess which is often times is worth several million dollars. Have a couple of bad years or get too old with kids not interested in being farmers then you sell to the big factory farms.

Every desion made is a business decision, just not ones you learn by books.

5

Excellent point. Nearly every farmer I knew was farming land which had been in their families for several generations, and, as you note, they were raised into the profession.

Several of the farmers I worked with mentioned to me that they knew of young people from their areas, who fell in love with farming, but who didn’t come from farm families. For a young person like that, there are other options for working in the farming industry (such as at a grain elevator, working as a farmhand, etc.), but the “cost of entry” for becoming an independent farmer is just so high now, that it’s nearly impossible for someone to become a farmer if you aren’t inheriting a farm from your parents.

6

One of the tallest hurdles to becoming a farmer, if you didn’t inherit the family farm (or marry into a farm family) is the price of agricultural land. As was stated previously, the modern farmer must invest a gigantic amount in machinery, but also must have enough land to make using that machinery profitable. Profit margins are often slim, and the debt you are carrying very large. Your skill at the actual farming part is the least of your challenges if you are competing with global companies with hundreds of thousands of acres.

Here in rural New England there’s a lot of cheering for the small-acreage farmer, but in reality it is a very hard business to make a living at. Most of the small farmers around here survive through some kind of value-added product and/or “experiences” marketed to non-farmers who want a taste of the rural life. There’s a turkey farm near me which makes most of its money from frozen turkey pies, and a berry farm which markets fruit syrups and such. Other farms sell through their own farm stands, which require retail sales chops and a wide variety of produce well-presented all season. Barn weddings, goat yoga, kids’ farm camps.You bet it is all about the hustle and the presentation.

I know a lot of small farmers, and very few don’t have one off-farm wage earner to make sure the mortgage gets paid.

7

This is consistent with the farmers I knew, as well. It was very common for their wives to have jobs “in town,” which helped to smooth out the peaks and valleys of income from the farming operation.

8

It’s just as often vice versa. I’ve a friend who runs a three-section sheep ranch in Saskatchewan, which supports 500-1000 head of sheep, depending on the season; her husband works as a machinist in town, although he would love to stay home and farm. Their place is considered a small farm up there. (A section is a square mile).

9

My grandparents were dairy farmers, and that was exactly how they did it. Grandpa worked the farm, while grandma worked at the hospital in town.

10

I grew up on a small chicken farm. Mom did the bookkeeping, but Dad followed the commodities market so that he’d know what to charge. Individuals came to buy eggs from us, but the majority went to food distributors. If they wanted 300 dozen the day after Christmas, we processed them on Christmas Day.

11

Of course we do.

Farmers need all the business skills that anyone running a business needs. Why would you think that we don’t?

Some farms have long-term contracts. They’re liable to be worth something less than the paper they’re written on, as they often read something like “we will buy X from you at Y price if we decide that we need to buy any X when you’ve got it.”

Farms producing only one or two crops of a type that’s harvested all at once and usually sold in bulk will spend less time on marketing than farms selling two or three dozen different crops to half a dozen different markets, including some direct to the final customers. But farmers in the first category may be studying everything from weather all over the world to availability of trucking and likelihood of wars, trade or otherwise, in order to make their best guess as to when to take that crop out of storage and sell it – and in addition hedging their bets by buying grains futures on stock exchanges.

Farmers selling direct-market, whether at farmers’ markets, through genuine CSA’s, as U-pick operations, or whatever, need to continually research which crops/livestock are likely to sell through those markets (a continuously-changing target), what prices they’re likely to be able to get, what growing techniques will allow them to produce which crops/livestock at a profit and which crops/livestock would be likely to lose money because cost of production’s probably going to be higher than people will pay, what forms of advertising are likely to reach their particular customers, what state and federal regulations cover which sort of sales, etc. All of which are continuously moving and changing targets.

The average age of farmers in the USA is currently about 57 1/2. Even with modern equipment, it’s a physically intensive job.

There are a lot of programs, right now, trying hard to get young people into farming; including programs to link up farmers who want to retire with younger people who want to take over a farm, with various techniques for long-term financing. Anyone who seriously wants to take up farming really shouldn’t give up.

Yeah, it’s not a new problem.

12

That’s true of nearly every farmer i know, too, but there are scattered exceptions. I buy meat from a farm owned by a guy who started his own farm. Granted, his grandfather was a farmer, and he has other relatives who farm. His bio says he started collecting farm animals as a teenager. But he seems to have established his own farm and grown it.

He actually did really well during the pandemic. He had a smallish operation that mostly sold at farmers markets, and he saw demand for meat delivered to homes, and moved into that space. He’s within a two hour drive of a major urban area, so it’s very practical to fill a truck with boxes of frozen meat and deliver them. I keep getting emails about how he’s expanding this or that aspect of the farm, and he now has quite a lot of stock in the on-line store. He markets to people who want to buy local pastured meat, but also to people looking for humane treatment of both the meat animals and the people who process the meat.

He’s clearly a businessman, who engaged in marketing, financing, and managing a complex operation.

13

I highly recommend you watch the show “Clarkson’s Farm,” available on Amazon Prime.

It centers on Jeremy Clarkson, the Top Gear guy. He can be off-putting, because he’s got this smug, superior, know-it-all demeanor. This fits with his role as host of the car show, because he is legitimately an expert, but he can still be irritating because he just oozes “hyperopinionated top dog” all the time.

His farm show is very different. Basically, the premise is that he’s taken his wealth as a TV presenter and bought himself a big rural farm. After a few years of being mostly an absentee landlord, he gets it into his head that he’d like to run it himself, more hands-on. How hard could it be? he says.

Which means the show takes his superior know-it-all condescension and transplants it into a setting where he knows effectively nothing. Every episode, he has some brainstorm or other about how he wants to do something, and he gets the wind taken out of his sails because his plans fail. Early on, he buys himself a top-of-the-line tractor, because of course he does, but then he discovers it’s too tall to fit through the door of his barn.

But the real point of the show is not the comedy of this smug bastard being made into a buffoon. No, because he keeps crashing into the things he doesn’t understand, and local experts patiently explain what he’s doing wrong, that means the show serves as very effective education into the reality of running a farm. You come for the Clarkson, but you find yourself learning the ins and outs of modern farming, to a sometimes remarkable level of detail. In one episode, for example, we see the gauntlet of bureaucracy and logistics he has to endure to get his lambs to market.

It’s a terrific crash course in the real-world challenges of farming, and the comedy framework makes it really easy to watch. If it’s a topic you want to learn about, I’d say you should give it a shot.

14

I’m really glad to hear about this.

15

Spot on. I grew up on a farm/ranch and am surrounded by farms and ranches and farmers today. Most people I deal with are either farmers, farm employees, or sell to farmers.

Around here, we measure land in sections, not acres. A section is a square mile. When I was a kid, one local farmer had 200 sections. I have no idea how much he owned when he passed away about a decade ago, but it was a lot more than 200 sections.

The father of one guy I grew up with was a farm worker. Him and his brother now farm, last I heard, about 70 sections and their goal is to be farming 100 sections before they die and that was about five years ago. They also own several other farm related businesses. One interesting thing about their operation is that they own very little of the land they farm – most is on yearly leases.

The cost of the equipment is amazing. Some tractors go for well over half a million dollars. A combine can cost more than half a million dollars. If a farmer doesn’t have much in the way of business skills, he’s not going to pay for much in the way of equipment, if he can even get a loan.

Selling your crops can take some hard decisions. You generally harvest your grains and store them at a grain elevator. If you have to sell them at harvest time, the prices are going to be low and you won’t earn as much as if you sold them months later.

Today, there are people wanting to put wind generators on the land around here. Some people are happy to do it, some are strongly opposed, and some have a wait and see attitude. I’m firmly of the opinion that farmers need to negotiate the contract carefully instead of signing what is set before them.

I know someone who has had wind generators on his land for a number of years now and his comment is that they pay okay, but nothing like what they tell you they are going to be paying. One big time farmer I know got a large number of wind generators on his land and it is rare to see them even turning. I often wonder whether he would sign a contract for them then if he knew then what he knows now.

And then there is cattle. There are many decisions to be made there. Whether or not to sell them at the sale ring or put them in a feed lot or maybe just finish them yourself. Feed lots are expensive and the last thing you want is for there to be a downturn in cattle prices when you are ready to sell. How much wheat pasture you need to lease for the winter can be another issue.

A farmer without business skills won’t be a farmer for long.

16

The farmer channel I subscribe to, Dodge Brothers, covered that question eighteen months ago in a couple videos.

Can you get into farming if you weren’t born into it? (18 min)

How to start farming with no land or equipment (22 min) where, while wanting to be a farmer since he was a boy, had his family farm sold out from under him.

Executive summary: You have to really want to.

17

Very informative.

Thanks for all your replies. I now have a much better understanding of how the farming world works.

18

Sacramento is really big on the “farm to table” movement (Being right in the middle of California’s agricultural region really helps with that). I get the impression that at least some of the area farms have contracts to sell directly to certainly restaurants. In fact from what I understand a certain cattle ranch was started specifically to supply grass-fed beef to a particular high-end local restaurant, at least that was what their representative who was selling meat at the farmers market said.

19

Some farmers do very well selling to specific restaurants. But I think it’s wise of the people at the ranch you’re writing about to also be selling at other outlets. Restaurants in general are notorious for changing chefs, and then having the new chef not want anything to do with the farmers the previous chef was working with. And some chefs are just plain very hard to work with.

So it is a potential way to do well – but it’s not a guaranteed one, and it’s one that’s liable to require continous good marketing skills, even if the farm is able to keep dealing with the same place.

20

I grew up on a farm for a time, my relatives are farmers and one was a grain elevator operator.

We had a couple of sections of land, and at any given time maybe a dozen or two head of cattle and a few dozen pigs and a coop full of chickens.

The chickens were never sold. We used the eggs ourselves and slaughtered a chicken from time to time for food.

When pigs were ready to be sold, we loaded them into the pickup with bed rails to keep them in, and drove them to a huge farming auction house, where they were sold to, I guess, slaughterhouses. We once had a large sow manage to leap over the rails of the pickup at highway speed, hit the ground rolling, then get up and run into the nearest field, completely uninjured. Retrieving her was fun.

Grain is harvested - we poor farmers shared equipment and labor. At harvest time we all did the rounds from farm to farm, pulling down crops. The grain would be stored in Quonset buildings on the farm. When the time is right, it would be augured into a grain truck and driven to a grain elevator. Thr truck drives up on scales and is weighed. Then the grain is drained from the truck, and the truck weighed again. The difference is the amount of grain you sold.

My grandfather also worked as a hail adjuster for an insurance company, to help make ends meet.

Yes, farmers have to have a number of business skills. But more importantly, they have to be a jack-of-all-trades. Farmers have to be able to handle animals, fix equipment, repair fences, drive heavy machinery, repair their buildings, manage payrolls if they hire people (and be able to manage the people too), understand scientific farming (lots of farmers send a kid to college to learn scientific crop management and animal husbandry), manage finances well, do complex taxes, understand the regulatory environment… It’s not easy. My grandma did most of the bookkeeping.