Looking back, looking ahead

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As Thanksgiving festivities conclude and the chain stores decorate for Christmas, the agriculture community can utilize this time to assess 2011 and plan for 2012. 

The evaluation of a calendar year seems pretty simple.  Was it too hot, too dry, or too wet?  What was the success of your cropping options?  What did the calf crop weigh?  How many cows left the herd, etc.?  Once the obvious is stated then the bigger issue becomes why?  Why did my cattle not perform?  Why was my hay crop disappointing?  Why did I not improve my bottom line profitability?  It is easy at this time to blame outside issues such as the weather, the markets, etc., but often the real answers lie deeper and more internal to management.  This is the time of year to ask “What could I have done better in 2011?  Should I have managed soil fertility better?  Should I have invested in better genetics?  Should I have spent more time managing input costs and what did I do that hurt the output and subsequent profit side of my operation?”  These questions and often the answers are the real management decisions keen producers ask and derive.  All of us can improve in some aspect of our operation, so now is a great time to be critical of where you fell short.  The old condition of barn blindness can often cloud this issue and thus often outside unbiased input may be needed.  Often Cooperative Extension is best positioned to provide an honest and open minded assessment of what may have been done differently in the last 12 months.  Take the time to visit with your local agent or team of agents to direct attention to your operation’s areas of needed improvement. 

Now is also a great time to pat yourself on the back and ask what you did right, what worked and what you should repeat.  It’s easy to have a glass half empty attitude in farming but often the glass is more than half full.  What were your successes in 2011 and how can you repeat them?  Were they a function of your management or good fortune?  Ascertaining the root of your success is critical to replicating the same in 2012.  Ascertaining the root of your success and passing that information on to subsequent generations is also a main factor in a family farm’s ability to succeed multiple generations.  Beware! – That may mean the younger generation will actual be comfortable in taking the reins of management.   

Finally, as we wrap up the calendar year we must look in to our crystal ball and do our best to prepare for 2012.  What we know is that the agriculture community is more tied to global issues than ever before.  How will that impact us in 2012 and how can we best buffer against this increasing volatility?  World markets continue to swing wildly and that will continue to bounce commodity market prices with great fluctuation.  This presents great challenges whether we plan to market commodities or purchase inputs.  Where are your risk management tools and which ones are best to protect your operation?  In addition, now is the time to assess what you need to accomplish in 2012.  What are the main focus points in your operation?  Do you address your natural resources, do you grow your operation to take advantage of economies of scale, or do you become more specialized in focus?  Every operation is different; no one answer fits all, but everyone needs to take the time to think about what lies ahead in 2012 and how best you can manage these challenges and how these challenges may be opportunities.  The U.S. agriculture industry is poised to be the shining beacon in a weak U.S. economy.  Protein producers are seeing record prices and commodity supplies will remain tight for the foreseeable future.  That said, sloppy management yields sloppy results and now is the time to fine tune your operation to better capture the upside of the market and prepare for tougher times when they come, and we all know they will come.

We look forward to helping you in your management decisions.  Our success as an organization is measured by your success as a farming community.  Happy Holidays and Best Wishes for a happy and bountiful 2012.

Source: Matthew I. Miller, Extension Agent, Farm Business Management, Southwest District



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