Saskatchewan Agrivision Corp (SAC) surveyed successful farmers in Eastern Canada (Ontario and east) and identifies 16 "best management practices" that make them successful. Here are the practices:
COST MANAGEMENT - Top producers know their cost of production is, not approximately, exactly.
ENTERPRISE GROWTH - Whether it is a means of spreading fixed costs or a strategy to counter cost increases, enterprise growth has been a practice used by many leading producers.
PRODUCE MORE - In all types of farming enterprises, top farmers produce more from their asset base than the average producer. Whether it is litres of milk, bushels per acre or pounds per calf, top producers achieve higher gain.
TECHNOLOGY - Top producers use technology as a tool to achieve higher performance but they are not driven to acquire the next newest invention simply for the sake of having it. From a technology perspective, some of these producers could be categorized as "innovators" but the majority of these farmers are probably "early adopters".
MARKETING EXCELLENCE - The marketing of agricultural products is driven differently depending on the sector. In some sectors marketing rests in the hands of the producer. In other sectors, marketing is delegated. In all sectors, achieving top returns for their product or commodity is extremely important and a key factor that differentiates top producers from average producers.
FINANCIAL WHERE-WITH-ALL - A properly capitalized business is a healthy business. And a farm with the financial where-withall to support the business and the business plan is in a considerably stronger and less vulnerable position than an under-capitalized operation.
RELATIONSHIP BUILDING - Top producers see great value in developing long-term business relationships, especially relationships that provide them a link to information. Just to what extent the producer has to go to find and develop these relationships depends on the sector. Many leading producers are active in groups and organizations at a local, provincial and national level.
CONTINUED LEARNING - Leading farmers are strong believers in ongoing education. The majority of top producers have some level of post-secondary education, and they take advantage of continued learning opportunities. These opportunities provide a source of outside stimuli and are accessed through formal certificate or diploma programs, on-line education and one-day seminars.
MANAGEMENT TEAM CLEARLY DEFINED - Management of a successful farm, like any successful business, requires sound management. Larger operations have the ability to divide the management responsibilities among various individuals while the majority of tasks must be completed by one or two people in smaller operations. Whether the heads in the hats are few or many, having an efficiently functioning management team working in unison toward the goals of the business is a key to the farm's success.
MANAGEMENT OF TIME AND LOGISTICS - Top producers identify time management as a critical component of success. They acknowledge that managing their time effectively is a challenge but one they are continually working to improve. Effective time management brings greater efficiency and profitability to the operation.
ADAPTABILITY - Diversified or specialized? That is a question producers have been wrestling with for generations. And it appears there is no right or wrong answer; it depends on the operators, the farm enterprise and the situation.
BENCHMARKING Top producers understand their farm business. They know their financial and production profiles. And they use benchmarking to compare the performance of their farm operation against that of their peers. Benchmarking assists them in identifying strengths and weaknesses of their operation as well as areas in need of improvement. It also allows them to set future goals and improve their production levels.
RISK MANAGEMENT - While entrepreneurial by nature top producers prefer to limit risk wherever possible. These producers utilize a variety of risk management tools in running their farm operation. They also have the sense of awareness to continue searching for new and better tools to include as part of their risk management strategy.
OUTSIDE ADVISORS - The quest for knowledge is a common trait among leading producers. They realize information is key to the operation of a successful business and obtaining this information from informed advisors can be very beneficial.
PEOPLE MANAGEMENT - Leading farmers are also good people managers. They place value on employees whether they are family members or hired workers.
TAKE TIME TO THINK - Today's leading farmers take time to think. When and how this time occurs depends on the individual. It may be a day off to go fishing, to catch up on some reading, to go for a drive or even to get on the tractor for a day. For many leading farmers it may take the form of a planned vacation away from the farm for a week or more. These longer vacations are often combined with business, providing the best of both worlds is time to recharge their batteries and a chance to network and increase their knowledge base.
All 16 of the best management practices combine to create a successful farm business, it says in the study.
COST MANAGEMENT - Top producers know their cost of production is, not approximately, exactly.
ENTERPRISE GROWTH - Whether it is a means of spreading fixed costs or a strategy to counter cost increases, enterprise growth has been a practice used by many leading producers.
PRODUCE MORE - In all types of farming enterprises, top farmers produce more from their asset base than the average producer. Whether it is litres of milk, bushels per acre or pounds per calf, top producers achieve higher gain.
TECHNOLOGY - Top producers use technology as a tool to achieve higher performance but they are not driven to acquire the next newest invention simply for the sake of having it. From a technology perspective, some of these producers could be categorized as "innovators" but the majority of these farmers are probably "early adopters".
MARKETING EXCELLENCE - The marketing of agricultural products is driven differently depending on the sector. In some sectors marketing rests in the hands of the producer. In other sectors, marketing is delegated. In all sectors, achieving top returns for their product or commodity is extremely important and a key factor that differentiates top producers from average producers.
FINANCIAL WHERE-WITH-ALL - A properly capitalized business is a healthy business. And a farm with the financial where-withall to support the business and the business plan is in a considerably stronger and less vulnerable position than an under-capitalized operation.
RELATIONSHIP BUILDING - Top producers see great value in developing long-term business relationships, especially relationships that provide them a link to information. Just to what extent the producer has to go to find and develop these relationships depends on the sector. Many leading producers are active in groups and organizations at a local, provincial and national level.
CONTINUED LEARNING - Leading farmers are strong believers in ongoing education. The majority of top producers have some level of post-secondary education, and they take advantage of continued learning opportunities. These opportunities provide a source of outside stimuli and are accessed through formal certificate or diploma programs, on-line education and one-day seminars.
MANAGEMENT TEAM CLEARLY DEFINED - Management of a successful farm, like any successful business, requires sound management. Larger operations have the ability to divide the management responsibilities among various individuals while the majority of tasks must be completed by one or two people in smaller operations. Whether the heads in the hats are few or many, having an efficiently functioning management team working in unison toward the goals of the business is a key to the farm's success.
MANAGEMENT OF TIME AND LOGISTICS - Top producers identify time management as a critical component of success. They acknowledge that managing their time effectively is a challenge but one they are continually working to improve. Effective time management brings greater efficiency and profitability to the operation.
ADAPTABILITY - Diversified or specialized? That is a question producers have been wrestling with for generations. And it appears there is no right or wrong answer; it depends on the operators, the farm enterprise and the situation.
BENCHMARKING Top producers understand their farm business. They know their financial and production profiles. And they use benchmarking to compare the performance of their farm operation against that of their peers. Benchmarking assists them in identifying strengths and weaknesses of their operation as well as areas in need of improvement. It also allows them to set future goals and improve their production levels.
RISK MANAGEMENT - While entrepreneurial by nature top producers prefer to limit risk wherever possible. These producers utilize a variety of risk management tools in running their farm operation. They also have the sense of awareness to continue searching for new and better tools to include as part of their risk management strategy.
OUTSIDE ADVISORS - The quest for knowledge is a common trait among leading producers. They realize information is key to the operation of a successful business and obtaining this information from informed advisors can be very beneficial.
PEOPLE MANAGEMENT - Leading farmers are also good people managers. They place value on employees whether they are family members or hired workers.
TAKE TIME TO THINK - Today's leading farmers take time to think. When and how this time occurs depends on the individual. It may be a day off to go fishing, to catch up on some reading, to go for a drive or even to get on the tractor for a day. For many leading farmers it may take the form of a planned vacation away from the farm for a week or more. These longer vacations are often combined with business, providing the best of both worlds is time to recharge their batteries and a chance to network and increase their knowledge base.
All 16 of the best management practices combine to create a successful farm business, it says in the study.
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