We talk with NW Iowa farmer Nathan Anderson about how building a network has benefitted his farm. We then explore how making small adjustments to your farm can have a large impact on the bottom line.
The laws of small changes
Introduction
What’s happening
Reminders:
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Send to farm4profitllc@gmail.com
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Jason Mauck of Constant Canopy - Keynotes
What’s working for Ag – listener or farmer feedback (Nathan Anderson)
Networking: Building, maintaining, and utilizing human networks.
Creating friends of the farm rather than enemies
Having those around you that you can ask for help, borrower equipment, trade services (grain bin moving story)
Continued learning through others
Hosting or attending field days to learn about best practices and meet others with more experience
Connecting with area politicians
Taking advantage of paid lobbying trips, talking to those in DC, get in conversations with those who have little in common with you.
Breaking the stigma of an “Independent Family Farm”
Farmers should be very dependent on others. That is the way is used to be with shared equipment and labor. Becoming “Interdependent”
https://practicalfarmers.org/
https://www.iowafarmbureau.com/
https://agsolver.com/
Topic of the Week: Why do small changes matter?
People don’t fear or resist change in general. It has to be exciting, clear, and obtainable to get the human psyche on board. People cut their hair, buy new equipment, try new food all the time = change
It’s intimidating to think about cutting something out of your life completely. Instead of eliminating something completely to save costs take a look at the budget and find small areas of savings.
5% less spent on utilities (call and ask for a break), less in interest expense (call and ask or pay down quicker), inputs like wages, seed, chemicals, fertilizer (application rates or dealer price lowering), family living expenses (eat at home)
Sell or produce for 5% more – more sources of revenues
What would it take to boost your yields by 5%? 200 bushel is 10 more bushel 50 bushel is 2.5 more, 3 lbs per day rate of gain is just an extra 15 hundredths daily
What would it take to sell your crop or animal 5% better than you have in the past?
Use a broker? Follow a plan? Set target dates?
Could you grow your gross revenues by 5% by doing something else?
Custom farm, contract or sub work, become a dealer, network referrals, board position?
If you could grow or raise your commodity for 5% less cost at the same time as selling it for 5% more your actual net profit increases. The profit you produce doesn’t just increase by 10% though it will be more! $50M into $62.5M is 25% more while $5 into $15 is 200% more (chocolate bars)
Buy 100 chocolate bars for 95 cents each and sell them for $1 apiece. This leaves you with 5% margin or $5 profit at the end of the day. However, if you find a 5% off coupon and by them for 90 cents each and sell them for $1.05 you have a profit now of $15 or 200% more than before.
Summarize
This doesn’t just apply to purchasing and selling. Making small changes in habits, mental and physical health, management techniques and more will pay off.
Management, health, and more to be covered in future episodes.
Challenge
What are some easy areas for you to make 5% changes in your operation? Where are the harder areas of changing going to be? Focus on assigning a dollar of impact figure to each category and focus on the areas of largest impact first. They may not be the easiest or most fun but will be the most rewarding.
Conference Update - Jason Mauck of Constant Canopy will be one of the Key Note speakers