Common Ground Blog

Find trends, outlooks and more on financing rural America from Frontier Farm Credit.

More Content

Challenges of Today Present Opportunities for Tomorrow

Agriculture is laden with risks and managing them is a critical part of what producers do every day. But to manage risks, you must actually take risks.

That’s not always easy for young and beginning producers, particularly when it comes to one of their biggest hurdles – access to land.

When asked what they would do differently if they could go back in time, many producers will respond, “Buy more land.” They often can point to the specific tract they passed up. For some, the regret comes from realizing in hindsight that they could have managed the risk.

Passing Up Opportunities

This doesn’t mean throw caution to the wind and plunge into debt to buy every piece of land for sale. Rather, know that taking risks is foundational to growing an operation. This is especially true for young and beginning producers.

The key is to fully understand the risk you are taking and the steps needed to manage them. Consider this conversation with a young customer who had a nice start on his operation and had the opportunity to buy a tract adjacent to his farm. To buy it, the young producer would need to buy a record per-acre price for his county.

  • How long will you own it? “Forever,” he said.
  • Where will land prices be in 30 to 40 years? “Probably higher,” he acknowledged.
  • Can you make the payments? “Yes,” he said.
  • Even under two to three years of adversity? “I think so,” he said.

There were additional – critical – facts to be considered, including his cost of production and how the new purchase would affect his fixed and variable expenses. But he first needed to get comfortable with taking a risk.

Commit to Your Goals

Other young and beginning producers will come across their own land opportunities. Be ready by asking, “What would it take if I . . .”

  • had to buy the farm I lease?
  • could add another lease to my operation?
  • wanted to double my operation in five to seven years?

After you identify how you can position yourself for opportunities, take the next step. Commit to your goals. This might mean doing things differently, sitting down with a broker to devise a better marketing plan or developing relationships with trusted advisors.

It has never been easy to get started in production agriculture. But even in challenging conditions, opportunities will come along.

Are you ready?

COMMENTS

Load more comments
Your comment has been received and is being reviewed.
avatar

Comments are moderated and reviewed before they are posted on the site. View our terms of use.

YOU MIGHT BE
INTERESTED IN

Jul 28, 2023 | The Business of Agriculture

Building and Improving Your Bench of Trusted Advisors

Watch as we discuss the importance of peers and advisors that improve your thinking and discuss strategies for getting started.

Feb 22, 2024 | The Business of Agriculture

Why Every Producer Needs to Take a Fresh Look at ARC and PLC in 2024

Discover which economic and crop insurance changes need to be factored into 2024 risk management plans ahead of March 15.

Nov 17, 2023 | The Business of Agriculture

Farmland Prices Rebound to Near Highs

The real estate market for farmland rebounded in the third quarter of 2023 following several months of stabilizing prices.

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

Frontier Farm Credit serves farmers, ranchers, agribusinesses and rural residents in eastern Kansas. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.