One of the things that really jumps out at me is just choosing your team of trusted advisors – whether that’s an agronomist, a seed salesman, banker, accountant, etc. and just utilizing those people to bring good information to the table and help producers make informed decisions. The key is knowing who you want on your team and making sure that you are surrounding yourself with people you trust to help make your decisions.
The next part then becomes figuring out how you are going to take the emotion out of the decisions. That team can help to do that. Marketing can be a very emotional thing and there needs to be a part of the process that is objective and helps to take the emotion out of the decisions.
Thirdly, this goes hand in hand with taking the emotion out, becomes knowing your breakevens on a farm-by-farm basis and what price point we need to be at to breakeven – not just breakeven because most people are not in the business to just breakeven. There is an ongoing need for capital expenditures. Equipment needs to be upgraded and traded and debt that needs to be serviced.
Following that would be knowing your risk tolerance and how it coincides with the financial position you are in. What kind of risk are you able to take? What kind of risk do you want to take? Those are decisions that should be made jointly with the producer and the lender.
Lastly, just make the best decision you can with the information that you have and then don’t look back. It is easy for people to get caught up in the emotion and listening to those who try to predict the market. Ultimately nobody knows. We only know what is in front of us today and the facts which are in the numbers. I try to encourage people to not second-guess themselves. If a decision is good today then then it’s a good decision. Success or failure isn’t dependent on hitting a home run.