Hello, northeast Ohio! Almost 16 months ago, the first case of the coronavirus was confirmed in the state of Washington. Since that time, life has been anything but normal or predictable for families and businesses. Even though we are getting more glimpses of normality, it is apparent to me that how we operate in the future will never be the same.
Even today, the ripple effects of the past year continue. Labor shortages and supply chain issues are showing up, with many of these shortages predicted to linger into the 2022 cropping year.
Impacts
The pandemic has revealed how dependent our agricultural supply chain is on the timely delivery of goods and services and having healthy and available agricultural workers. Most of us are aware of the shortage of lumber, but other issues are creating headaches for farmers across the country.
As I have visited with farmers and local ag dealers they are indicating tight supplies of herbicides, fertilizer, tillage parts and fence posts. A pinch on plastic supplies is also causing shortages in drainage tile, bale wrap and other plastic-based materials.
As we analyze the crazy pandemic year and its lingering impacts, we have been asked how successful farm managers should plan for the future. Recently, I brainstormed with my colleagues, Chris Zoller and Mike Estadt, on tips for managing when “normal” is not normal. Here is some food for thought.
Foundation
First, having sound business practices and structure are the foundation for businesses to fall back on when facing internal and external disruptions. Make sure to take time to develop or review your farm’s written mission statement. Involve family and employees in the discussion.
We also recommend developing written goals — both short-term and long-term. You are more likely to achieve goals that are written and shared with others. Post pandemic is also a great time to conduct a SWOT Analysis, to review the Strengths, Weaknesses, Opportunities and Threats related to your business.
Suggestions
Secondly, we offer the following suggestions for you to consider as we move forward:
Do not rely on government farm programs as income sources as you develop enterprise budgets specific to your operation.
Work toward being a low-cost producer by knowing your cost of production. Higher crop prices can be a temptation to not be detailed in tracking expenses. Make sure to track and monitor both variable and fixed expenses.
Develop contingency plans and emergency preparedness plans for overcoming disruptions that impact your business. How will work get done if employees get sick or are in quarantine? How will you overcome future slow-downs in the supply chain? What is your plan B when you can’t get the parts you need? What happens if crops or livestock cannot be received by their end market?
Enroll in the Ohio Farm Business Planning and Analysis Program to fully understand your farm operations financial strengths and weaknesses. Learn more at farmprofitability.osu.edu.
Review leases and contracts annually.
Hold family meetings to discuss finances, review your mission statement, complete a SWOT analysis and develop goals.
Network with your peers. Share successes and challenges.
Form and meet with a farm business advisory team that may include an extension educator, accountant, lender, nutritionist, crop advisor, insurance agent and others important to your business.
Use OSU Extension resources, like Ohio Ag Manager, Farm Office, Crop Observation and Recommendation Network, Beef Cattle Newsletter, and Buckeye Dairy Newsletter to help stay up to date.
Opportunity
So how will you manage, when normal is not normal?
As you ponder the future, I offer the following quote from Kristin Armstrong, who said, “Times of transition are strenuous, but I love them. They are an opportunity to purge, rethink priorities, and be intentional about new habits. We can make our new normal any way we want.”
