Diversity on the Farm: What is it?
For the last decade, I think I can safely say, that most farms have produced just one or maybe two items. Dairy farms produce milk and Ranches produce beef. Grain farms produce soy, cotton, wheat and other grains like oats. Cotton growers produce cotton and vegetable farms produce vegetables. The list goes on and on.
As times have changed and advanced machinery has become more readily available, it seems that most farms either “go big or go home”. Too bad this leaves us dependent upon markets to determine whether we will have a profitable year or not.
Is there a solid solution? I think the simple answer is YES!
Diversity comes in many different forms. It is crucial for the survival of a small farm.
As a producer, how do you get the most bang for your buck? You have to think in terms of a commodity broker, salesman and ultimately a consumer.
Maybe the combination of beef and eggs doesn’t sound good to you unless it’s on your breakfast plate…but, ultimately it may just save the farm. By raising chickens to go along with your beef farm, you create market diversity.
Profitability is always key. Knowing the when’s and why’s are also just as important. As a farmer, it is key to look at the futures market to give yourself an awareness of some potential pitfalls that can be seen. If grain prices are expected to skyrocket, maybe it isn’t profitable for your farm to raise chickens to supply eggs within the local market. If your input costs are nearly as much as what the local market says is a good price per dozen of eggs, you need to consider if having those chickens is really worth the time and effort.
Beef is different. Maybe you have been considering a rotational pasture grazing with minimal inputs of grains or no grains at all. If grain prices are expected to go up, now is the time to take a step back and make a business decision. Don’t get locked into the bubble of: “We have always feed grains, so we are going to stick with what we have always done.”
Too many farms that I have been working with or been on lately seem to have that mentality. If you are one of those farms, I think you need a little wake up call. Okay, maybe a big one in my personal opinion.
If you are operating a farm and are selling goods from your farm to a consumer, you are a business! No matter how you want to argue otherwise, you are a business.
I am now going to give you a comparison to show you how you look to someone else.
Alright, we are going to substitute milk for plain white t-shirts. They have no writing, logos or emblems. No embellishments or decals, just plain white t-shirts.
Now you are the consumer. If you are in need of plain white t-shirts, where would you go? Yup, to that store that sells just plain white t-shirts. But, what happens if you want one with a pocket? Or a design on the front? Then where do you go? I bet you don’t go to the all white, no design, no logo t-shirt store.
Now let’s compare again. Now you have a dairy and beef operation. You only sell milk and whole animals. Converting that into the t-shirts again, now you sell plain white boring t-shirts and colored one’s in bulk groups of 25 only. Can you see how this expands your market but also creates just two niche markets? What happens if a consumer only wants one red t-shirt and one white. The white one is easy to do, but you would be left with a bundle of just 24 red shirts that you would have to find another way to sell.
As a small farm, let’s compare again. We are still operating with a t-shirt comparison. Milk will be plain white, beef will be plain red, and poultry will be yellow. Eggs will be yellow with a logo on the front. Beef halves will be burgundy with a logo on the back. Beef quarters will be pink with a frilly collar. Hay will be green. Custom harvesting will be brown with a cool logo on the front.
I think you can easily see where this is headed. By providing a variety of “goods” you offer the consumer a wider variety and you a little bit more flexibility. And if you really look at all the comparisons above, I didn’t even get into value added products either. Not one mention of cheese, actual butchering and packages of meat or the differences in custom harvesting like wrapping. I didn’t even mention gardening either!
I also hope that you can see how your farm is represented to the public/consumer too. Yes, I know that it is difficult to keep up with the demands of a milking/dairy farm. You just need to sit back and consider the implications of what could happen if milk prices plummet again like they did in 2009. We are a business and some of the farms out there just need a friendly reminder of that fact.
I am fully aware of the passions that drive us into agriculture, it’s just how we choose to live and make an income. Diversity on the farm just eliminates some of the risks for loss. No matter how much we love to farm, we cannot continue to keep fighting what the consumers want. You have to bend a little and be able to provide different products and/or services.
We have such great opportunities as farmers and ranchers to start generating additional income. Now that it is February, let’s put on our thinking caps and see what types of additional items we can add to our “store front” without adding additional equipment or too much in the way of high expenses and let’s get this farms and ranches making some money!
The closing question is:
What is one step that you could do to generate additional income of your farm?