What does farm management mean to you? Is it managing inputs, land, marketing, labour, assets, time?
Yes, yes it is.
Farms can be successful, even though they are poorly managed in many of these areas. And well managed farms can be financial failures. It is the nature of farming that a big piece of luck is generally required for success, especially in the dry land grains and oilseeds business.
Most farms are operated by couples or individuals who are related. Often that big 12,000 acre corporate farm is really four couples and an individual or two, averaging 2,400 acres per person. Older members of the group often own or rent a few more acres than the younger partners, which tends to shift over time.
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The farm grows a little at a time, but often doesn’t get any bigger than it has to be to provide a living for its members. This is largely because of risk or other management restrictions and a reliance on shared risk and luck.
Luck management is what allows most dry land crop producers to remain in business and in farming.
I am a true believer that you make your luck. You have to have some lentils in the rotation when they top 50 cents per bushel. You need to grow a big canola crop even when the price is likely going to be $8.75 per bu., and it ends up being $10.50.
Farmers who had a couple hundred cows five years ago weren’t feeling all that lucky. They do today.
A quarter section of alfalfa might not have paid its way three years ago, but a crop this year was a different story. If you owned land in 2007 and still have it, it likely tripled in price. None of these things were predicted.
Managing luck starts with managing as many things that can be controlled as possible.
I just spent time with members of Farm Management Canada at their annual conference. They are farmers interested in making their own luck or making the most of the luck they get. I felt lucky by the end of it.
I am thinking of buying 500 cows this year. Now, if a couple of hundred cattle producers are feeling lucky, they could each pony up a few bucks and send it to me, in ex-change for me not doing that. Generally if I’m getting out, you should get in. If I am buying, sell.
I sometimes fail to manage my luck effectively, especially with cattle. Just saying.
