Farmers and ranchers must be strategic thinkers and planners
Strat-e-gy: A plan or policy designed to achieve a major or overall aim. In the military sense: A plan for military operations or movements during a war or battle.
One more I really like: A method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.
Regardless of how you define it, our farmers, ranchers and agribusinesses use strategy daily. Modern agriculture represents the classic need for strategic thinking and planning. Consider the variables involved in decision-making involving agriculture.
Farmers face a wide variety of factors when making business decisions, including weather, forecasting, commodity prices, opportunity costs on one crop or product vs. another. Other variables include markets, trade issues, local factors, environmental concerns, financing options and neighbors.
Given the sheer efficiency of ag producers, it’s amazing to consider all the options and variables involved in their decision-making and strategic processes.
We can use this same process in our personal and business finance decisions. With the availability and ease of using the internet, we can make better financial decisions.
Considering buying a truck or tractor?
Here are some questions and considerations:
• New or used
• Cost vs. savings
• Brand and size
• Application and likely usage
• Implements needed
• Purchase or trade
• Ease of use/who will use this
• Buy or finance
• Local or distant purchase
• Servicing when needed
These and many more decisions often come automatically to our farmers and ranchers. That doesn’t mean they get ignored or receive less impact in the decision-making process. This is just an example of a regular occurrence for our farmer-producers.
Setting goals is important. Just know there can be a close relationship between effective goal management and strategic thinking and application. One compliments the other.
Another strategic concept involves the use of available resources as we strive to do our jobs and conquer new opportunities. The more we use all available resources as we take on a task or challenge, the better the result. One of the best ways to do this is to talk to others who have “been there, done that.”
If you know a neighbor, friend or associate who has dealt with a similar problem or task, tap into that resource. The more we learn, the less likely we are of making the same mistakes. Most people are happy to share their knowledge and often their past mistakes in order to help us. What a great resource. No doubt you’ll return the favor in some other area when you can.
I can’t overestimate the power of the internet as a resource. If you can think of it, it’s highly likely someone has identified a similar issue online. Use it, but not at the expense of ignoring the great people resources available next door or at a local farm store or dealership. There’s no better lesson than one learned the hard way. Let’s learn from others when possible. That in itself can be strategic.
Ken W. Knies is an agricultural and rural consultant. He holds a bachelor’s of science and arts from the University of Arkansas and a master’s of business administration from Webster University in St. Louis, Mo. He formed Ag Strategies, LLC as a business unit focused on quality borrowers and lenders.