Why the Optimism of Next-Generation Producers?
Results from the 2017 U.S. Census of Agriculture have been published, and the picture of farming is changing. There are over 321,000 producers under the age of 35, and that ratio is growing as older generations pass on management of their farms. The USDA report says, “Farms with young producers making decisions tend to be larger than average, in both acres and sales.”
Born between 1982 and 2000, Millennial farmers are largely optimistic about the future. They’re comfortable with technology and excited to apply better data to their farming practices. We talked with three of these next-generation producers at the Farm Futures Business Summit. In Episode 17 of our podcast, you’ll hear from Brett Heineman and Scott Henry, both from Iowa, and Brad Walk from Illinois:
Here is what these next-gen producers see on the horizon:
Opportunities to expand: “I’m very optimistic,” says Walk. “There’s a ton of opportunity. The age of farmers today is rising, and that turnover is going to give a lot of opportunity to guys coming up. They just need to buckle down and manage their risk.”
Better information: “I’m really excited for what the future holds in our industry,” says Henry, “specifically the insights that are going to come from data that’s truly analyzed and aggregated across a larger spectrum as adoption rates grow. I firmly believe we’ll be able to understand and implement better new practices that can bring immediate returns to our bottom line.”
Fulfilling challenges: “I see [this ag economy] as a challenge to get better,” says Heineman. “I’m not afraid of it as much as learning how to do more with less. It comes more down to efficiencies. Is there a more efficient way for us to grow a crop with less?”
Gaining the right skills and using them proficiently is key for this new generation. The census found that one out of four farmers today is a beginner with less than 10 years of experience. Our featured producers say newcomers to farming should hone these practices:
Track your finances: “The biggest thing is just having a balance sheet—knowing where your break-evens are,” says Heineman. “It takes time to build your first one, but once you get it built it’s very helpful. Also, look at ROI: ways to increase yields on what you have.”
Control costs and market better: “Always assume you can cut more out of each line item in the budget,” advises Henry. “Look at everything on an annual basis and try to negotiate a better position for ourselves to make sure that those line items are working in our favor. The second piece [of advice] would come from our grain marketing approach. We use options such as puts and calls as part of our hedging strategy to remove some of the risk (albeit it at a slight premium) and be able to sleep at night.”
Grow carefully: “[Producers] can’t get too big for their shoes too fast,” cautioned Walk. “That’s one thing I ran into when I went to school. My university professors were telling me I’d have to double my size every three or four years just to stay competitive. But it’s not about growing fast. It’s about being smart.”
If you’re a young producer assuming more management of your family farm, congratulations! We share your optimism and agree there’s power in data to manage risk. That’s why we’re constantly improving technologies that bring meaningful information right to your smartphone or tablet, to support better grain marketing and fertilizer purchasing decisions.
Specifically, these apps and platforms include:
ADM Offer Management*: Make cash offers on grain and put in bids to buy fertilizer at prices that work for you.
ADM FarmView*: Check markets, compare local cash bids, and access your ADM account information, including deliveries, contracts, payments, and storage records.
ADM Wait Time*: Minimize wait in line when delivering grain to ADM.
GrainBridge: Calculate your fixed and variable costs and track profitability in real time as you make grain marketing decisions. Big enhancements are underway in a joint venture with other grain companies, but the platform is already a powerful risk management tool. (Open an account at GrainBridge.com.)
*Available from the App Store or Google Play.
As you wear many hats in your operation, remember your local ADM team is here to help. Beyond time-saving technologies, we have valuable experience in marketing grain and supplying bulk fertilizer—a combination that can widen your margins substantially. We invite you to an open and engaging conversation. We can calculate scenarios to see what strategies may work best for your operation.
We’d be honored to help your growing operation remain successful for years to come.
Past performance is not indicative of future results.
ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. The sources for the information and recommendations in this communication are believed to be reliable, but ADM does not warrant or guarantee the accuracy of the information or recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication. The information and recommendations in this communication are subject to change without notice.