Roy Smith's advice for those with the urge to farm
Sacrifice, off-farm income, and a break or two are still necessary
 
By Roy Smith
Semi-retired farmer
 
11/22/2005, 2:11 PM CST
 
 
Roy Smith, Nebraska farmer and market analyst

This year, I planted the second crop of my semiretirement. I gave up the rental land that comprised 780 of my 1,000 crop acres. My wife, Sharon, completed her final year of teaching. I look forward to a slower pace for her, much as I enjoy a slower farming pace. I still do the marketing talks and writing that I have done for several years.

It is interesting to look back at my career to see how I might have managed with perfect hindsight. If I knew then what I know now, I am not sure I would have tried it. Still, the urge to farm was overwhelming for me as it is for many young people. The challenge of starting a business with almost no resources did not seem as formidable when I was 28 as it would now.


Getting some breaks

I started farming after getting two college degrees, serving a stint in the military, and teaching for five years. Because of that, I was older than most of my contemporaries. I also had a wide range of experiences and two children. I started with a little money I saved up while teaching, but not much else.

My parents owned a quarter section of land. Sharon's parents owned 80 acres. Our crop base was less than 240 acres rented from family members. I bought Dad's machinery for $1,200, market value at that time. I paid him with a note, of course.

My second year, I was fortunate to rent 310 acres and additional machinery from a neighbor who discontinued active farming. He didn't sell his machinery because much of it was homemade with little sale value. The four years using his equipment were difficult with frequent breakdowns. However, it gave me additional land and allowed me to build equity. And, I generated enough cash flow to put food on the table.

Because I needed cash, I took any extra work I could get. The first year I did some substitute teaching. I quickly discovered that the small amount of pay did not offset the lost time away from the farm. I took on a grain bin dealership in 1972. The income was better, and I could adjust the workload to suit my farming operation.

At first, I kept separate the income from the farm, the bin business, and Sharon's substitute teaching wages. As I compared my situation to my start-up colleagues, I observed that everyone had some source of income other than the farm. I quickly understood that I didn't need to apologize for using outside income to build the business. The economy (then and now) makes it unrealistic to start from scratch and be successful without it.


Everyone needs a head start

While in school in the 1950s and 1960s, I thought that a good manager could start by renting a quarter section of land and raising livestock. I quickly discovered that everyone needs a head start. It could be family-owned land, or equity built up early in life through FFA or 4-H projects. For me it was off-farm income. The other avenues were not adequate to provide for my family and build the farming business.

I was lucky that my grain bin business had several profitable years when I needed extra income. The fact that my wife had good earning potential and the desire to use it helped, too.


All your resources

The lesson in this is that a young person needs to use all of the resources available to make a farm business profitable. That may mean an outside job and farming part-time for a while. Or it may mean living on a spouse's income so that profits can be left in the business. It certainly means doing everything ethically possible to acquire an adequate production base. Being a good neighbor to potential landlords is crucial, even though their land may never become available.

Some people think that prices exceeding the cost of production should be guaranteed. My 34 years of farm experience tells me that will not happen. There is not enough available land for everyone who wants to farm. There will always be competitors who will pay more for land because they have an economic advantage. It may be as simple as being willing to live at poverty level. It may be as complicated as having outside income and the willingness to invest it in a farm business.

It is a tough world. Anyone wanting to farm needs to have realistic expectations along with the skills to compete.

Not everyone can farm. To be successful you must be a survivor!



 


 

 

 

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