Being a Contrarian

As parents, we watch our children conform to the crowd and hope that they make wise decisions that possess a sound foundation. We may have asked them "If everyone else jumps off of a bridge, will you jump too?" Kids want to do what their friends do because peer pressure is strong and swimming upstream takes courage. As farmers we may find ourselves in that same predicament. While you didn't decide when to start planting based on the neighbors' first day in the field, you feel the stress caused by watching them start a week or two ahead of your intended date. Second guessing ourselves based on the decisions of the majority can be dangerous.

Think about this in relation to marketing decisions. You make a decision, and then you question your choice based on what others chose. There is some innate security in holding the same view as a group. This type of security may lead to poor marketing decisions. To quote Warren Buffet again regarding trading stocks, "Be fearful when others are greedy, and be greedy when others are fearful." In 2008, when many stocks were low and stockholders were fearful and liquidating, then was the time to buy.   

Our company looks at financial numbers differently than most. We use what is called an accrual method of accounting. It's fairly uncommon in agriculture and yet it helps with accuracy. It's best to know what a decision means to your bottom line as quickly as possible. The sooner you have accurate numbers the better your decision making ability. This gives you the advantage to seize opportunities that "crop up" before others are aware that the opportunity exists. It will also help you forecast what your year will look like financially.

What other advantages may exist if you think contrary to the masses?

Tax planning – Many farmers like to make purchasing decisions in December to avoid paying taxes. It's a contrary view to choose to pay taxes instead and build your working capital, but it's probably a better decision if your operation didn't really need that equipment yet.

Strategic planning - Think of yourself as the CEO of your farm. If you had to satisfy stockholders (and it's possible that you do, based on your family's succession plan) it's easier done with a strategic plan in place.

Input purchasing – If you buy when everyone else buys, it is unlikely that you will obtain the best price.

These are just a few points to challenge your thinking.  It's likely other points have come to mind. Think like a contrarian. A quote from a source unknown, "If all my friends were to jump off a bridge, I wouldn't jump with them, I'd be at the bottom to catch them."