Thursday, August 21, 2014

SCHLAGECK: Continued ag success depends on change

By JOHN SCHLAGECK, Kansas Farm Bureau | 1/10/2014

With the advent of the New Year, Kansas farmers and ranchers must once again look to the future with an open mind and the flexibility to develop new ways of marketing their products.

Customers and consumers are driven by changes in personal preferences and increased income levels. “Give consumers what they want” will never ring truer than it will in 2014.

Today’s consumers have money and they want to spend it on what they want. Convenience also is very important, and while price is less important, it will still be a major piece of the buying equation.

Our future agricultural economy will continue to be driven by consumer demand. Consumers become wiser, and savvier every day. Tomorrow’s well-informed shopper will want, and demand, more information about how and where their food is produced. It will be up to the producer to help provide such information.

Consumers must never be viewed as adversaries. They are the folks who buy agricultural products and keep farmers in the business of producing food, fiber and fuel.

We can never discount consumers’ intelligence. Rather, we must seek input from them, and, once we understand what their needs are, provide for them.

Along with giving customers what they want, agricultural producers will be once again be called upon to become better risk managers, especially as they continue moving into a market-oriented world arena.

The successful farmer in 2014 and beyond will be the one who manages yield and price risks by knowing exactly what break-even costs of each crop will be. They will incorporate specific goals that ensure profits and include prudent risk-management strategies.

Flexibility will also key future success on the farm and in the market place. One day soon farmers will no longer be able to rely on government disaster relief. Farmers must examine sound, new marketing techniques and the latest crop insurance options coming down the pike.

One attribute many farmers share is common sense. Don’t forget to use this vital tool during the upcoming year.

Remember, that past performance never guarantees future success. Avoid greed when marketing. Never wait to sell at the top of the market because you rarely will.

If something sounds too good to be true – it generally is. Always, and this means all the time, explain risk strategies you are considering to your spouse or partner. If they cannot reiterate what you have said and have it make sense, then you may want to reconsider.

While relying on common sense is helpful, it will not always make you a successful farmer. Being thought of as a good farmer will not always ensure profitability either. But, becoming a keener business specialist is a prerequisite to continuing in the profession of farming in the New Year while providing customers what they want.

John Schlageck is a Farm Bureau commentator, specializing in agriculture and rural Kansas.

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