Tips to help farmers manage when normal is not normal
Hello Coshocton County. The month of May started out cold and wet, but the weather over the last half of the month has been picture perfect for farmers and gardeners across the region. It has been great to see how many acres of corn and soybeans were planted over the past 12 days and to see some incredible first-cutting hay being made.
The beautiful stretch of weather was a breath of fresh air for all of us. I know many were getting concerned early in the month. However, I know many of our farmers would echo the words of my dad, who said to be patient and be prepared because good weather will come. And when it does, make hay while the sun shines. And when the rains return, then you rest.
As we transition out of the coronavirus pandemic, we will still need to work on our patience as the ripple effects of labor and supply-chain shortages may be with us for quite some time. Recently, we have been hearing news reports of shortages of everything from fuel and lumber to chicken, chlorine and semiconductors. And fast-food establishments are having to ration ketchup packets due to a shortage in ketchup.
We also are feeling this pinch in agriculture. As I have visited with farmers and local ag dealers, they are indicating tight supplies of herbicides, fertilizer, equipment, machinery parts and fence posts. A pinch on plastic supplies also is causing shortages in drainage tile, bale wrap and other plastic-based materials. And when you can find these products, there is usually some sticker shock. I found this to be the case when I ordered fertilizer for our hay fields a few weeks ago — it was almost double in price from a year ago.
Recently, I brainstormed with my colleagues Chris Zoller and Mike Estadt on tips for managing when normal is not normal. Here is some food for thought from our discussion.
First, having sound business practices and structure is the foundation for businesses to fall back on when facing internal and external disruptions. Hold family meetings to discuss finances and review your mission statement, business goals and operating procedures. Post pandemic also is a great time to conduct an SWOT analysis, reviewing the strengths, weaknesses, opportunities and threats related to your business.
Second, work toward being a low-cost producer by knowing your cost of production. The recent higher prices for corn and soybeans can be a temptation to not be as detailed in tracking expenses or critically analyzing purchases. Make sure to track and monitor both variable and fixed expenses.
Our homes and businesses also have been infused with supplemental income through federal stimulus or pandemic relief programs. Our caution is to not bank on future ad hoc government payments, personally or for your farm. Mid-year is a great time to review the budgets you made at the beginning of the year and how they are faring as we reach the mid-part of the year. Make sure to check out our recently updated OSU crop budgets at https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets.
Third, develop contingency plans and emergency-preparedness plans for overcoming disruptions that could impact your family and business. Do you wait to the last minute to purchase items for repair? If so, your patience may be tested by our current supply-chain issues. How will work get done if employees get sick or if you can’t find employees? How will you overcome future slow-downs in the supply chain? What is your plan B when you can’t get equipment parts or supplies like bale wrap or twine that you need? What happens if crops or livestock cannot be received by their end market?
So how will you manage when normal is not normal? As you ponder your future normal, know we at OSU Extension are here to help you with your farm business planning. Just give me a call at 740-622-2265 or drop an email to marrison.2@osu.edu.
To close, I offer the following quote from Kristin Armstrong: “Times of transition are strenuous, but I love them. They are an opportunity to purge, rethink priorities and be intentional about new habits. We can make our new normal any way we want.”
Have a good and safe day.
David Marrison is an associate professor and extension educator of agriculture and natural resources at Ohio State University Extension. He can be reached at 740-622-2265 or marrison.2@osu.edu.