For Release January 4, 2000

AGRI-VIEWS
by Chuck Otte, Geary County Extension Agent

This column has absolutely nothing to do with Y2K! (Isn’t that a relief?!) What it does have to do with is what direction your farming or ranching operation is going to take over the next five years. It doesn’t take a Ph.D. in agricultural economics to figure out that agriculture is in a big transition period right now. Unfortunately we have a lot of farmers and ranchers in this country that probably won’t be as directly involved in agriculture in 2005 as they are now.

Most people are not very fond of change and the bigger the change, the less we like it, and the older we get the more uncomfortable we become with change. Change is even less palatable when some one else is calling the shots. So, while you are going through that gut wrenching, marriage testing process of closing out your 1999 records and getting ready for taxes, don’t even think about your future in agriculture. You will be under enough stress already. But, shortly after you finish the process, while all those facts and figures are still in your head, start spending some time thinking about the future direction of your business.

One of the management practices that most farmers, ranchers and other small business owners, don’t do enough of is planning where they want to be at some point of time in the future. I think we’ve all heard the old saying that if you don’t know where you’re going how will you know if you’ve arrived? There is a lot of truth in that. But an even bigger problem is when the farmer/rancher is going through the daily motion and has never thought about where they want to wind up.

I don’t have the specific answers for any one involved in agriculture. I don’t know where we are going to be in five years, I don’t know if the international markets are going to get better, I don’t even have a clue what to expect for weather the rest of this winter. What I can offer is a series of questions that you need to be working through to help you steer yourself through some tough decision making. Let me share a couple of those with you.

What I feel to be the first critical question is whether you are making enough money to meet family living expenses. You may already have off farm income to help with family living expenses. What are average family living expenses? This is sometimes difficult for the farm family to determine because much of the family living expenses may be mingled with farm expenses. According to Kansas Farm Management Association records, a family of four in north central Kansas has average annual family living expenses of $30,160. For a husband and wife only it isn’t much less, $28,582. If you are not making family living expenses and you don’t have off farm income, then something will have to change.

The next question is whether the ag enterprises you are involved in are making money. Don’t look at just one year, but look at three or five or seven years worth of data. The last couple of years may not have been that great, but what about the years before that? If you haven’t made money on cattle for the last ten years, why are you still trying? If you haven’t made money is there something you can do differently to turn it around? If your only response is to get better prices, what are you going to do about that or what can you do about that? Can you develop a niche market? Can you direct market? If you aren’t making money and you don’t want to change anything... well, I don’t know what to tell you.

To wrap this up, the big item to consider is change. If you aren’t making money what can you change. If you are just waiting for markets to improve then the end may be near. But if you are willing to look at options make some plans and make some perhaps drastic changes, I think I can help you stay in business for another decade!

-30-

Return to Agri-Views Home Page

Return to Ag Home Page