financial decisions. Three other
young producers, all in different
locations, are sharing one of the
industry’s top combine to harvest
their crops. The producer on the
West Coast starts with the
equipment and then, sends it to
across the country, ultimately
reaching the third producer on the
East Coast. Of course, this reduces
fixed costs for each, and also
allows each of them to benefit
from today’s best technology.
Even those just entering the
agricultural industry have heard
the various horror stories related to
taxes and farms. A critical practice
of today’s young producers is
managing taxes instead of strictly
minimizing payments. They
understand that paying income
taxes is a necessity for businesses
building working c apital and cash.
In many cases, minimized tax bills
tend to build higher amounts of
overhead costs as well as assets that
quickly depreciate. In the end,
taxes must be paid and this
younger generation has shown the
willingness to factor in that
obligation.
Another attribute of all
successful young producers is
character. As part of the “Five C’s”
of credit, this element requires one
to follow through on that which
has been committed. In other
words, it is crucial for young
producers to do what they say they
are going to do. For example,
using borrowed money only for its
intended purpose is a matter of
character. And when financial
problems arise, open
communication with lenders and
suppliers is also a necessary
element in building honesty and
integrity in business relations.
A profit plan is also a high-
priority practice for successful
young producers. Profits are first
used to build efficiency, and then,
growth. In other words, the
familiar phrase of “better is better
before bigger is better” is being
implemented with this group.
Along with profits, this group of
young business leaders is building
and maintaining working capital,
and strengthening the top half of
the balance sheet. They are
experiencing the economic reset in
a way that shows them the
importance of building cash
reserves during more profitable
years to use as a bridge or self-
insurance for circumstances like
today. And as those looking for
opportunities, they see the value of
cash and liquidity in negotiations
and flexibility.
Next, this group demonstrates
a willingness to collaborate and
cooperate with others. Specifically,
these individuals often utilize
mentors to help guide the decision-
making process. Increasingly,
mentors are outside of the
producer’s locality with some even
benefiting from the international
perspectives of their mentors.
Similarly, these young producers
are building professional networks
that not only include industry
mentors, but other professionals
outside of the agriculture industry.
These groups are being used for
formal brainstorming, as well as
informal sharing and discussions.
There is an old saying that one’s
net worth financially and
emotionally is directly correlated
to one’s network of people. It
certainly appears that today’s
young leaders believe in this
“power zone” of people and idea
collaboration.
In my travels, I have observed
both the desire and pursuit of
better balance among the more
profitable young producers. They
understand the contribution of
business, family, and personal
endeavors, but also incorporate the
demands of each in balance with
the other. Much like the older
generations, they are beginning to
realize agriculture has something
unique and special to offer in
raising a family, which makes the
balance even more regarded.
Finally, this emerging group of
young, successful agricultural
entrepreneurs exhibits the
“G.W.C.” approach, which means
they get it, want it, and have the
capacity to get it done. Of course,
all three are necessary to be
sustainable and viable as a
business, family and individual.
Thus, it is true that younger
farmers and ranchers face
formidable challenges as they set
out in a capital-intensive industry
with larger and more experienced
competitors. However, these
practices are common among
those that are most successful in
profits, production, and business
management. Ultimately, it is not
the amount of land, make of
equipment, or even the enterprise
that brings success. Sustainability
is the result of consistent practices
and habits that bring logic,
balance, opportunity, and return
to one’s life.
HEARTBEAT | WINTER 2017 13