Bad decisions cost...

Don't let emotions deny you profits It's the first farm you bought. There's no way you could part with it, even though payments and taxes are costing much more than the cost of renting the same land. Besides, it's probably a good long-term investment.

You're not using that big tractor as much as you used to, but it's paid for. So is that other equipment parked in the weeds and under the shelters. One day they might come in handy, so you hold on.

Bad business decisions. You have to learn to separate emotions from business and investment decisions from productive farm business decisions.

The same goes for commodity marketing decisions. Without a clear plan in place, with realistic expense figures on paper (or on the computer) it's nearly impossible for a busy farmer to know when to pull the trigger on critical marketing decisions.

A steadily growing number of Southern farmers are learning to take control and make more informed farm business decisions that return more profits to their farms. Some of these farmers are taking advantage of practical and intensive Executive Farming, Debt Management and Developing a Marketing Plan seminars offered through Clemson University's Cooperative Extension Service and the South Carolina Farm Management Association. Similar programs are available around the country.

"The Executive Farmers seminar was a real eyeopener for me and other farmers worried about the bottom line," recalls Vikki Brogdon, Manning, S.C., corn and soybean farmer. "We used our own figures. We broke all our assets down into productive and non-productive assets. We looked at all our income and expenses.

"The first thing made clear to me was the farm I was buying and paying for, the first farm I ever bought, was a non-essential and non-productive asset. It might have been a good long-term investment, but that investment had nothing to do with the operating efficiency of my farm. It was not necessary for me to own that farm for me to operate. I sold that farm and made my whole debt structure look better.

"If you're a good farmer and a good caretaker of the land, you can find landlords who will rent you the land you need to keep your business going," Brogdon says.

Along with selling the farm, Brogdon also decided to sell a tractor that used to belong to her father, along with six other pieces of underutilized equipment. She had a sentimental attachment to the tractor, but it was larger than she needed and she seldom used it. With the cash she generated from these and other sales, Brogdon restructured and paid down debt.

She emphasizes that she didn't use the "extra" cash to buy a boat or a new truck, other non-essential assets.

Brogdon has been a member of the South Carolina Farm Management Association since 1988. With the assistance of specialists like Scott Mickey, she has recorded and analyzed all of her farm assets, income and expenses. These real cost figures have become especially valuable as she develops corn and soybean marketing plans.

"I've gotten a lot out of the marketing seminars," Brogdon says. "We've had three years of drought around here, including this year. But I've done a pretty good job of marketing what I had to market. I guess you could say I'm doing a pretty good job of treading water."

She said she would not have sold corn when she did this year without what she learned in the seminars. "But with the LDP I got $3.14 for my corn. I had a target price based on what I needed to cover my costs and make a little money. I had the figures on paper and I was watching the markets. Then all I had to do was pull the trigger and sell when the price was right."

Brogdon has learned to stop using the "hope and pray" strategy of marketing. "I've finally learned that as long as you have all of your figures together, you should know when to pull the trigger and sell. If you can't pull the trigger yourself, hire someone to do it for you, based on your business figures."

Brogdon says she has gone from intimidated to analytical, beginning with joining the Farm Management Association and later attending the business management and marketing seminars. She likes to attend marketing conferences in January, when new crop contracts are young.

"I like to go to the marketing conferences with all of my business records in hand," she says. "I look at the price outlooks, supply and demand figures and the expenses I can anticipate, and I put together a marketing plan. That makes sense. I hate to go to a marketing seminar in July and hear someone tell me that I could have made this much profit if I had done something back in February."


Clarksdale, MS 662-624-9645 Osceola, AR 870-563-4606

One question frequently asked is: Aren't all crop insurance agents basically the same? The answer is not as simple as it may seem.

For example: If two agents quote a 65% buy-up soybean policy with a 40 bushel yield in Boliver County, Mississippi, the premiums should be exactly the same. No agent or company writing a multi-peril crop insurance policy that is reinsured by USDA can alter or change the published rates. However, in working with a knowledgeable agent your farm operation may be a perfect fit to use a basic or enterprise unit discount. In many cases saving thousands of dollars in premiums.

Things to consider in selecting a crop insurance agent: 1) Does my agent have the experience and knowledge to handle my account? An agent must be familiar with added land, substitute yields, reconstitutions, skip row factors and many other variables that directly affect coverage.

2) Does my agent keep regular business hours? Is he accessible and easy to reach when you have questions concerning your policy?

3) Does my agent have the ability to write business with several companies? Many companies today are in the process of developing additional products to enhance and improve existing multi-peril products.

What your agent doesn't know or understand can cost you plenty.........

Crop Insurance Hints: - If you expect to have a claim on your 2000 spring crops and have not contacted your agent do so immediately.

- 2001 wheat planted acres should be reported to your agent by December 15, 2000.

- Sales closing for 2001 spring insurance is February 28, 2001. This is the last date to add crops, change levels, etc.

- If you have added land to your farm operation last year or plan to this year, your insurance coverage may be affected.

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