Well, the furry weather forecaster, Punxsutawney Phil, woke up last week and did not see his shadow! According to legend, that means we can expect an early spring. However, the cold temperatures since his prediction are making me wonder if the little fur-ball was correct!
As we wait for spring, it is important for farmers to plan for the coming year as it appears as it will be another tight year for all enterprises.
Do the math
I would encourage farmers to take time to pencil out good budgets for each of their agricultural enterprises. A profitable farm is more complicated than planting crops or milking cows and hoping they pay all the bills by the end of the year. Farmers should consider their operations as a company with multiple profit centers working toward a common goal. Each profit center should pull its own weight without taking away from another.
Successful farmers evaluate each profit center independently and determine how to maximize profits. A good place to start is by reviewing the income and expenses for each enterprise from the past couple of years. Producers can then compare these summaries against the budgets, which OSU Extension has available. Then, realistic budgets can be developed to guide the farm in 2016.
Barry Ward, in our Department of Agricultural, Environmental and Development Economics, does a nice job of coordinating these budgets for OSU Extension. These budgets can be found at: http://aede.osu.edu/research/osu-farm-management/enterprise-budgets/.
Farm succession
The winter is also a good time to set down with your children who are involved in the business to talk about farm succession plans. One of the key aspects of farm transition is the development of a plan to transfer management responsibilities to the younger generation.
One great way to begin is to have an unrushed and open conversation with the younger generation about your farm business and its future. By having a sit-down meeting you will be able to find out what they like about their involvement with the farm and also what frustrates them.
Identifying these frustrations will provide you the opportunity to take action before an “explosion” occurs. Make sure to ask your children for their opinion on the responsibilities they believe they should or shouldn’t have.
Are there changes that need to be made for them to have a continuing interest in the business? You might be surprised on the good ideas that your kids might have for you. Have you taken the time to ask them? One of the biggest mistakes we make is putting off these discussions until tomorrow. After all, we are going to live forever, right?
Take the pledge
I would encourage you to make the 365-day pledge. So what is the 365 day pledge?
Pledge to transfer one piece of knowledge per day to the next generation. Think of it in the context of if you were to die tomorrow, what management knowledge would your family need to know to continue to run the business at a successful level?
Just imagine how better equipped your son or daughter will be a year from now if you follow this pledge. When my dad was diagnosed with pancreatic cancer in 2010, we only had seven weeks with him before he passed away. I can tell you a lot of learning was done by our family in those seven weeks. Wouldn’t it be easier to teach one thing a day over a series of years?
Your 365-day-pledge could include teaching where all the underground electric, water lines, and drains are. Better yet, show them and then draw a map which can be placed in a farm resource book.
Where are all the property borders? Where are the deeds for the land owned by the farm? Your 365 day pledge could include lessons on financial record keeping, maintenance on equipment, tax and employee management, reading soil tests, making cropping and animal nutrition decisions, and the list can go on and on.
Charge up
And finally, the winter is a great time to recharge your batteries. Even if a trip to sunny Florida or Arizona is not in order, maybe a weekend getaway on a “one-tank” trip would be refreshing. Some of our family’s favorite memories have come from a quick trip in Ohio or neighboring Pennsylvania. Take a moment to spend some quality time with your family as none of us know how many years we will have together.
To close, I would like to share a quote from Robert Schuller, who stated, “Never cut a tree down in the wintertime. Never make a negative decision in the low time. Never make your most important decisions when you are in your worst moods. Wait. Be patient. The storm will pass. The spring will come.”
Have a good and safe day!
