During the past six months, my partner Terry and I conducted seminars across the U.S. for a major company.
Part of that work involved hosting a panel of the best farmers from each area of the country where we worked. A wide variety of farmers from the East Shore to Montana and from Minnesota to Mississippi provided valuable input.
They shared their thoughts and concerns, and issues that keep them awake at night. It was a pleasure for us to meet and get to know such a fine group of producers.
Most of the panel members had major concerns involving future profitability, commodity prices, rising land and rent values and weather. We can't do anything about the weather, other than go to church, but future profitability can be managed. Hopefully, we can help producers improve profitability by leveraging opportunities.
What also surfaced more than I expected was an attitude that there's not a good future in production agriculture. Others had very positive attitudes, and are constantly looking for the opportunities that lie ahead.
In my 32 years of business and people management experience, I've found attitudes play a large part in one's success. If we spend our time working on things we can control and less on areas we can't, our chances of success improve greatly.
Things we can control are marketing plans and decisions, equipment cost management, inventory management, managing people and agronomic management. We can't control the weather, the markets, the government and our competition.
Moe Russell is president of Russell Consulting Group, Panora, IA. Russell previously spent 26 years with Farm Credit Services as a division president. For more risk management tips, check his Web site (www.russellconsultinggroup.net) or call toll-free 877-333-6135.
Farmers regularly ask us about competition from South America. Last week, my partner hosted 22 farmers from Brazil and Argentina, and nearly 50 from Colombia and Venezuela. Collectively, these countries cover about 75% of South America. He spent time hammering out numbers in the accompanying spreadsheet, which proved to be quite an experience.
He said farmers from Brazil and Argentina often disagreed about their costs, but finally came to a consensus. I'm sure the group of U.S. farmers I talked to would have some of the same challenges.
The worksheet showing soybean cost and revenue comparison is interesting. In the first column we used Iowa State University data for land and machinery costs. The second column translates this data from acres to hectares. The third column is the group's consensus from South America.
It's interesting that the net is about the same. The return on equity doesn't look great, but if you could reduce U.S. machinery costs by half, which many of our producers have, you have more than 10% return on equity for the Iowa farmer.
This supports my beliefs about Brazil and Argentina. When asked about South America, my response has always been: “With so many opportunities here in North America, why would I want to go to South America?” We have many competitive advantages if we just keep looking for them.