Why Run the Farm Like a Business?
Our study reveals the best farmers see themselves as CEOs of their business.
Bryce Knorr
Published: Dec 28, 2010
Top farmers share many characteristics with corporate America. According to a joint study between Purdue University and Farm Futures, the best see themselves as CEOs of their farming business.
That mindset holds true even if they're smaller operators, who of necessity must spend most of their time on production chores.
What sets them apart? While these successful CEO farmers outscore others on a broad spectrum of management skills, the biggest difference was noted on "the vision thing" - thinking strategically about their operations. They're more than two times as likely as average to have a real vision for their farms.
In addition, they're more likely to assess their advantages and disadvantages compared to competing farms and to capitalize on new and emerging markets.
Bruce Erickson, Director of Cropping Systems Management at Purdue University, noted the study looked at seven broad areas of management expertise. While producers in the past did well by focusing on production skills, Erickson said this survey found producers ready to focus on other topics, possibly a response to today's economic environment and markets.
"Of the seven categories we studied, producers rated the importance of financial and risk management skills higher than the others," says Erickson. "Producers also indicated a higher level of adoption of financial management practices than some of the other categories."
Indeed, successful producers strive to achieve a standard of professionalism in all aspects of their operations, from improving their production practices with technology to keeping financial and field records. That may be why most farm together with other family members, who can focus in a facet of the business.
"Farming is more complicated than ever," says Erickson. "It seems pretty safe to say that succeeding in today's environment probably requires a somewhat different set of skills than your parents or grandparents had."
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Tagged: farm, farming, Purdue University, farm futures, financial management
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