By Susan Crowell / editor@farmanddairy.com
“We have a farm economy that is facing increasing financial challenges and is not going in the direction we think it should or know it can.”
That’s what U.S. Secretary of Agriculture Sonny Perdue told the House Committee on Agriculture May 17.
According to USDA economists, net farm income this year, accounting for inflation, will be the lowest since 2002. Credit is tightening, delinquency rates are headed upward and debt-to-asset ratios are headed in the wrong direction.
Hardest hit are the farmers we need the most: Some 28 percent of young farmers, 34 and younger, have an aggregate debt-to-asset ratio of 40 percent or higher — and that was in 2015.
The only thing propping up assets are strong land values — but we all know the saying, “land rich, cash poor.”
So Perdue understands the dismal state of farm affairs, and you live it — but consumers are clueless. (That’s fodder for another column.)
Early in my years with Farm and Dairy, we published an annual “June is Dairy Month” supplement, which evolved into our annual Progress Edition, which is inserted in this week’s issue, and will continue next week. Our theme this year is “Farming for the Future,” because rather than dwelling on the negative, we prefer to focus on the positive — how some of today’s farms and agribusinesses are looking ahead.
Planning for tomorrow means different things to different farms, because no two farms have the same assets, the same management, the same strengths.
Several weeks ago, I heard George Blankenship, former executive at Tesla Motors and Apple Computer, speak on business growth and potential at the Alltech Ideas Conference in Lexington, Kentucky.
At growth companies, Blankenship said, “there is no status quo.” These companies are always looking for one thing they can do to improve, to innovate, to grow.
“Somebody is going to revolutionize what you do,” he added.
Do you think hotel chains ever thought people would open up their homes and rent rooms to strangers? Airbnb is now worth some $30 billion.
Do you think taxi or transit companies ever thought people would jump into the cars of strangers? Uber is now worth $68 billion.
Simplify, Blankenship emphasized. Focus only on what’s important. Then have courage. Don’t listen to outsiders, and “don’t let anyone stand in your way.”
“To change the world,” Blankenship said, “sometimes it feels like you need to do the impossible.”
But, he added, “it’s not impossible, it just hasn’t been done yet.”
Start thinking. Think about your farm, your business, your goals. What is it YOU want to do? You don’t have to do things the way they’ve always been done. You can move. You can stop. You can start.
Another speaker at the Alltech conference, Jack Bobo, senior vice president at Intrexon, a biotech company, said something that made me sit up: The next 35 years will be the most important 35 years there will ever be in agriculture.
Think about all the changes and innovations we’ve experienced within our industry. Then think about the huge task that faces us through 2050 — the environment, world population and agricultural productivity.
The next 35 years will be the most important 35 years there will ever be in agriculture.
How are you farming for the future?
