My Road Warrior travels took me to upstate New York at the head of the Finger Lakes to Geneva. After a refreshing five-mile run by the lake, my duties included moderating a panel of producers for the New York Bankers Association. The panelists included a grain producer, a wine and grape producer and a dairy and grain operation. All were third- to fifth-generation businesses, and two of the panelists happened to be my former students and assistants while I was doing graduate work at Cornell.
What advice did they impart on New York State lenders?
- First, all were burdened by regulation and paperwork from government and regulatory bodies that tended to have “can’t do” rather than “can do” attitudes.
- One producer is focusing on intelligent growth of the business by having a culture that attracts bright intelligent people. Though they were family businesses, all were profiting by hiring good business partners outside the family structure.
- Two of the producers were “chasing the rabbit” of scale. That is, reducing cost by increasing the scale of production through partnering. For example, eight producers that harvested 6,000 combined acres of corn with nine choppers had reduced the number of choppers to two while increasing acreage to 8,000.
- John Noble of Noblehurst Farms in western New York, who operates a 1,700-cow dairy, had a cutting edge idea. As a business owner he attempts to keep 60-90 days of cash for self-financing just in case another financial crisis occurs and a liquidity crunch is on the scene.
- All three producers encouraged lenders to tell the story of agriculture to young people as a possible future endeavor. The panelists stressed that a media strategy is a definite “must” for all businesses and industries.
P.S. I encourage many of you reading this column to take a vacation and tour the Finger Lakes. Experience wine country and some well managed and very diversified farm businesses. The Finger Lakes are one of the best-kept secrets in America.
Editor’s note: Dave Kohl, Corn & Soybean Digest trends editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups. He can be reached at firstname.lastname@example.org.