The Ag Globe TrotterDr. Dave M. Kohl
Welcome to the weekly edition of The Ag Globe Trotter by Dr. Dave Kohl.
The decade of the 2020s is one of accelerated change. The COVID-19 pandemic, geopolitics, military unrest, consumer demand shifts and technology all appear to be converging, which is creating both challenges and opportunities. In the midst of these shocks, new waves of producers are entering the agriculture industry. Let’s discuss how these producers are getting their start.
Transition planning: family and nonfamily
When I visit with young farmers and ranchers about their biggest concern, transition planning tops the list, particularly for those in the second to seventh generation. Often, the transition planning process is a long-term endeavor that can take multiple years to complete. However, sometimes the urgent day-to-day activities become a priority over the important tasks. For example, planting the crops and caring for livestock can jump to the front burner over the long-term transition plan.
If done properly, transition planning can energize the business with new skill sets and, in some cases, the business culture and mindset can be improved. It is a great opportunity to extract the best experiences of the previous generation and mesh it with the youthful thinking of the next generation. With 21% of the senior generation in agriculture with no family to take over, transition planning is a great wave of opportunity to be pursued by both generations and it is not necessarily just for family members.
One observation from my seminars with young farmers and ranchers is the amount of “boomerangers.” These are entrepreneurial individuals who want to enter the industry or return to their agricultural roots. Some will enter the agriculture industry through family or non-family businesses, as discussed previously. Other boomerangers will start their own business and bring equity, cash flow, and a wealth of knowledge and experiences that can be applied to their agriculture endeavor. Some boomerangers will enter the commodity markets, while others will cultivate niche markets to directly serve the consumer.
Another wave of participants is starting up from scratch. They endeavor the challenge that it cannot be done. Some producers start very small, while others will launch bigger businesses. They often utilize outside income or side “gigs” for additional revenue. This outside revenue often leads to engagement with others that can create new business ideas and markets for products and services. These producers have the entrepreneurial spirit, commitment, vision, and a focus on goals and objectives that are creating a new heartbeat in American agriculture.
This new group of agriculturalists is “getting it done,” regardless of what is thrown their way. They are very eager to learn and, in some cases, desire mentorship. They also exhibit a good, old-fashioned work ethic and commitment that is characteristic of many who have been successful in previous generations.
Dr. Kohl is Professor Emeritus of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agricultural and Applied Economics at Virginia Polytechnic Institute and State University. Dr. Kohl has traveled over 8 million miles throughout his professional career and has conducted more than 6,000 workshops and seminars for agricultural groups such as bankers, Farm Credit, FSA and regulators, as well as producer and agribusiness groups. He has published four books and over 1,300 articles on financial and business-related topics in journals, extension and other popular publications.
© Northwest Farm Credit Services 2022
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