Making Your Small Farm Profitable :: Chapter 6 Book Report

Farm goals and planning were the topics for chapter six of Ron Macher's book, "Making Your Small Farm Profitable". This seems to be a pretty popular topic in the small scale farming periodicals, books, seminars, and even blogs I guess (since I have mentioned it a few times). I think the emphasis on goal setting, building a business plan, and holistic management is one of the things that sets new smaller scale or un-conventional farmers apart from the bigger conventional farmers. Not that they don't have goals or a business plan, but rather that it is more often based on what the neighbors are doing instead of what would work best for the farmer, the family, and the farm.

Mr. Macher takes a little bit different approach than some of the other books or articles I have read on the subject. Carol Ekarius in, "Small-Scale Livestock Farming" takes quite a bit of time explaining planning and management. That book, which I have read and will post some book reports on later, is full of the whys and hows and nuts and bolts of how to go about writing and planning. Mr. Macher gives a brief introduction on planning and goal setting and ends the chapter with some thoughts on achieving your goals and developing a farm plan. Sandwiched in between is a set of sample goals. I found it pretty interesting to read these hypothetical goals and his thoughts on each one. Also, he broke the goals down into groups of ... "Long-Term Goals" ... "Medium or Intermediate-Term Goals" ...and... "Short-Term Goals"

I thought I would choose one from each of the sections that stuck out as I was reading. Remember these are not my goals ... but they do make a lot of sense to me...

• Long-Term Goal: We are from the city, so I will work part time for a farmer, maybe on weekends, to learn basic skills and ask questions, questions, questions, so that I can gather an idea of what I want to do. I will work for free if necessary to achieve this goal.

-I think that is a great goal for the beginning farmer and I do it as often as I can when I go and work for my uncle and other family. That isn't any better learning that doing around someone who does ... or something like that


• Medium or Intermediate-Term Goal: I will purchase breeding stock, machinery, buildings, and such on as low-interest loans with 3- to 5-year terms.

-Debt sort of scares me like the plague ... we have never had any, and I think we would be perfectly happy to live our lives without any. But, with that being said I know that there is a place for debt when managed and accounted for properly. I think one key to handling debt is to have a good set of goals and a great business plan in place. Not just a good enough business plan to convince the banker ... but, something good enough to convince yourself!


• Short-Term Goal: We will figure in time for rest and recreation this fall.

-I think the reason that this one stuck out in my mind is because it is something that I'm not very good at doing. We have not taken a vacation or real break from my job in a long time ... it is just something that has been difficult for me to do for many reasons. But, after writing about the "farmer burnout" article, and looking at my own life I think this is an essential goal for the small scale farmer ... or anyone!

Does your farm have business plan (no matter how big or small)? Does your farm have goals? Were those goals put down as an entire family? All good things to think about, and questions I asked myself after reading the chapter.

More Thoughts From Allan Nation's Editorial...

Yesterday I wrote some of my thoughts on Allan Nation's editorial from the November, 2007 issue of "The Stockman Grass Farmer". It was a long essay on the issue of scalability in the business of farming and it really made me come to two conclusions. First, I realized that this was an important issue for the farmer that wants to make a profit in the every changing farm economy. And secondly, I was reminded how important the "business" side of farming is. Farming is not just a romantic pastime (at least the way I would like to do it), but rather it is a business that takes thought and planning so you can come out ahead. In fact, it is a business that possibly takes more thought and planning because you have all the things going on in the business side and all the things happening on the livestock/crop side. I've got a lot to learn, but I feel like I am truly on my way now.

But, scalability wasn't the only topic he wrote about in the article. He also brought up a book that he had recently read titled, "Small Giants" by Bo Burlingham. This is not a farming book at all, it is purely a business book. I decided I really respect farmers (or farm writers) who branch outside of just the nuts and bolts of agriculture and try and bring in new ways of thinking from the business world.

According to Mr. Nation the gist of the book is that most advice on running a business is, "written by and for employees of public corporations, which have low capital costs and a stockholder mandate to grow as fast as possible." It is all about growing quickly and then selling off parts of your business because you have grown so quickly.

The alternative according to the author of the book are businesses running at what he calls the "human scale". Businesses who decide to grow slow and concentrate on their profit margins run on the "human scale". Businesses who do not require outside investors, mega-lenders, or stockholders run on the "human scale". Businesses who want to keep their business private and under their control run on the "human scale". And when I think of the ever-changing agricultural markets these days and the corporate structures creeping (or busting) their way into farming I think the "human scale" is the only scale that successful farmers can work with.

Check out this quote from Mr. Nation. "But, if your goal is a pleasant life in the country, you need to concentrate on creating as much margin per unit of production as possible." Think about that! If you have a wide profit margin on a few units produced you will be able to self-finance your farming business and expand (or not expand) according to your desires.

The way you get those wide margins is by combining low production costs with higher sales or marketing prices. I have always understood this concept and it is why I have put so much effort into researching grass fed beef, year around grazing, alternative crops, u-pick fruits and vegetables, and so much more. If I wanted to farm like everyone else in the state, even if I found a farmer that would let me transition into his farm, I would have to work the off farm job so that I would have enough money to be able to get the loan that would allow me to buy that piece of equipment that I needed to keep up with the ever-changing agricultural world. Did you follow that? Well, I barely did and I wrote it!

I decided early on that I needed to work on this farming idea slowly. I know that I need to get all of my information and ideas together as much as I can so that when I start to grow I will be able to keep up with it. I know that I cannot become attached to lenders and debt or I would probably never get out. I know that I have to find the different markets and productions models so I can have this wider profit margins. It does seem daunting, but I believe it is the only way that I can attack my desire to be a farmer.

There is more to farming than early morning chores, wet dew on the grass, and cattle chewing their cud under a big old tree in the pasture (although that sounds very inviting). I believe successful farmers that aren't doing things on a corporate level are some of the most intelligent artists out there! They have to be an artist because so much of farming is an art of knowing just when to do things and just how to do them, and they must be intelligent to compete in a world that feels like it needs super-size everything ... including their farms.