Developing A Strategic Plan For Your Farm By Benedict T. Palen, Jr.

It is a common practice in corporate America, in companies large and small, to have strategic plans to guide the business over, say, the next five years.   These strategic plans serve as road maps for each part of a company, and they are revisited, say, once a year, for updating, and progress reviews.

How many farmers have a strategic plan? Anecdotal evidence suggests that the percentage is well under 50%.  Reasons for not having a plan run the gamut from believing it is unnecessary, to concerns about cost or the amount of time that may be required to put one together.

From my perspective of 40 years in agriculture, a strategic plan is a key for helping to ensure that a farm can deal with the headwinds, cycles and opportunities that have been persistent features of agriculture for decades.    One example—of many—is that factors such as GMO crops, precision agriculture, and blockchain, which are in the forefront of today’s agriculture, were just blips on the horizon not too many years ago.  In other words, change is a constant, and a well done strategic plan is a way to deal with that inevitability.

Understandably, farmers maintain a very intense focus on what is right in front of them—their crops—throughout the growing season.   But it is important to step back, and see the big picture, because it is from there that elements of a good strategic plan will emerge.   I recommend that farmers engage a consultant who can offer a deep and thoughtful perspective on the farm business, someone who knows which questions need to be addressed. 

These can run the gamut from how operating decisions are made, to company culture, succession planning, capital structures, and marketing programs—just to name a few things on a long list.

The consultant will take the time to understand the farming operation, and to observe its processes, and its people.  This is an effort that should take place over a period of several months so that, for instance, a crop is followed from start to finish.  With the knowledge gained on a specific farm, and coupled with the consultant’s overall knowledge base, the ingredients of a good strategic plan can be developed, and discussed, along the way, with the stakeholders.

Steps To Precision Agriculture By Benedict T Palen Jr

After zone mapping a field with the VERIS machine, it would be worthwhile for a farmer to compare the results with NRCS soils maps.  In many instances, those soils maps are more than 40 years old, and their margin of error could be plus or minus five to ten acres—as compared to sub inch accuracy with GPS devices and today’s high tech tools for agriculture.

 

The soils from each of the zones in a field should be sampled, and then lab results obtained that will provide details on nutrient levels, but also for organic matter, pH, and soil texture.  It is important to know the inherent fertility in a particular soil, the water holding capacity of that soil, and the potential for enhancement of crop yields on each soil type.

This precision soil testing will likely involve hundreds, if not thousands, of soil tests on a typical farm.  While there is a cost associated with this task, these are some of the best dollars that a farmer can spend to gain an in depth understanding of the “bones” of the farm.  

Further, it will then be possible to do a cost/benefit analysis for the precision ag tools needed to implement a changed farming program, along with the change in inputs needs (more in some areas of a field, less in others), so that a precision farming budget can be developed.   In those cases where a farmer seeks additional financing to make these changes, the level of detail produced from the zone soil mapping, and the subsequent financial analysis, can be a persuasive tool for lenders.  Likewise, on rented land, with leases where there is landlord participation in certain costs, the same could be true as far as getting some financial participation from the owner for these improvements.