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Attributes Of Successful Grain Farmers
Grain farmers in the upper Midwest have become world-class in production with bigger and bigger yields. But does production alone make a farmer profitable?
Jim Knuth is a senior vice president with Farm Credit Services of America. He says it’s not those with the biggest yields that are succeeding, it’s the producers who are running their operation with a business, financial, and marketing perspective. And they make these decisions on a holistic basis based on their cash flow and the cost of their entire operation.
"In other words, here’s how they think. Working capital per-acre on my entire operation. Machinery and equipment costs per-acre on my entire operation. Land costs per-acre on my entire operation," says Knuth. "The holistic view is what matters and should drive their business decisions."
He says successful grain producers know their numbers, they don’t guess. They know what they can afford and what they can’t. They get better before they get bigger and that process never stops.
"The continual improvements, the adjustments. This is not a one-time thing, or I did something last year," he says. "Every month, and every quarter and every year, they plan and plan and plan on how to make their operation work. These are the attributes that we see time and time again in those who are being successful. They’re great producers too, but the dividing line all comes back to the business."
Knuth says they also put more time, attention, and priority into a marketing plan.