It’s Just Money…

DSC03742A couple of really smart people told me at the beginning of my blogging journey to never write or talk about money when visiting with people outside of agriculture. The subject is difficult to navigate and often results in negative exchanges.  After following this advice for more than four years, last week I deviated and addressed the topic in the middle of a presentation at a local university.

The University of Nebraska @ Kearney offers classes for retired Nebraskans looking to expand their knowledge. For the past two years, I have presented in a class that teaches about agriculture. This group of “students” provides a truly unique audience as many of them are retired college professors who possess incredibly curious minds and no inhibitions relative to asking questions.

After a 45 minute exchange with the class, I prepared to close my talk when an older gentleman sitting in the third row caught my eye as he raised his hand with a question. He had read an article talking about the commodity markets, in particular the negative margins experienced recently in the cattle feeding business. He asked me how I protected my farm financially so that I could make a consistent profit.

My simple answer, “That is an impossible task”, led to an interesting array of facial expressions across the audience. Another hand immediately went up as the audience started to ask more questions about profit, loss, and farmers’ financial sustainability.   I thought briefly of the advice from my beef advocating mentors , but decided to go with my gut feeling and answer the flurry of questions.

We talked of the recent economic crisis plaguing beef farmers, the need for better risk management tools for farmers, and the importance of diversity in agriculture as a basic protection tool for long term sustainability. One of the hardest lessons that I have learned in my 19 years of caring for cattle is that regardless of the quality of both my animal care and the quality of the beef that my animals produce, I am ultimately at the mercy of the market relative to making a profit.

My favorite farmer’s grandfather learned many, many years ago to not put all of his eggs in one basket. For that reason, our farm grows a variety of products (corn, cattle, alfalfa, and soybeans) to sell into a variety of markets (traditionally grown as well as organic niche sales). This helps to protect us against experiencing paralyzing losses when market volatility strikes. We also follow the old fashioned adage: save when the years are good so that it is possible to sustain in the years that are bad.

The latest issue of Drover’s Magazine reports that feeding cattle in 2015 resulted in an economic crisis where United States farmers lost a total of $4.7 billion dollars over the 12 month period. The Feed Yard Foodie farm was not immune to this industry wide catastrophe, and the cattle portion of our farm has sustained significant losses since April of 2015. While this has been psychologically difficult for me, our farm business is solid enough that we are persevering in the long run.

When the class finally broke for the day, a woman from the audience came over and put her arm around me. I was truly humbled when she said, “I had no idea that farmers ever lost money. I will pray for you and your family because what you do is important and now I understand just how hard it is.”

I learned an important lesson that afternoon – sometimes compassion and vulnerability trump pride, and the truth is often the very best answer.  I do not even know that very special lady’s name, but I will remember her face and her kind words for the rest of my life.  Her compassion serves as a reminder that it is okay to be human, and that at the end of the day it’s just money

17 Comments

Filed under Foodie Work!, General

17 responses to “It’s Just Money…

  1. Bill

    Maybe the advice is meant well, but obscures an important topic?

    • It is a complicated issue and agriculture has struggled to effectively reach out to our customers about economics. I have thought a lot about it this past week, and am thinking of writing a follow up post to more deeply address the “heart of the matter”. You are correct that it is an important topic!

      I hope that you and your family are well.
      Best,
      Anne

  2. Michael

    Thank you for sharing and God Bless you?

  3. It’s often difficult to think that we do all the work and hope to make ends meet regardless how hard we try. Thats why farmers/ranchers are eternally optimistic. Thanks.

    • Yes, you are correct. Sometimes I really struggle with the eternal optimism part. It is a personal weakness of mine, and I am quick to blame myself when the cattle part of the farm looses money. I have a hard time not beating myself up over it — even though I know that I am doing my best and it is sometimes out of my control. It takes a huge psychological toll and can be overwhelming.

      Thanks for the understanding and support. You phrased it very well.

      Best,
      Anne

  4. theranchwifechronicles

    Anne,
    It is so important to be open minded. What a great life lesson, retired University Instructors still learning and the life lesson that you came away with too. Awesome.

    Sounds like you made a positive impact on telling your Ag story and expanding the view non-ag people have of our industry.

    • Thank you, Robyn. Yes, it was a great learning experience for all of us. I agree that being open minded is really important — as is the notion of being a life long learner 😊. It is a win – win deal!

      I hope that calving is going well for you all!
      Anne

  5. Kathy

    We have a cow/calf operation in S. Central Montana. We don’t have running water but wells. 2011 we had record-breaking moisture (we’ve been here 23 years), 2012 fire burned 80% of our rangeland. We’ve had mostly drought since we’ve been here and it’s a struggle. Since 2005 we now lease this ranch and almost own the cows. Year to year we don’t know if we will continue to ranch out here. We are not rich to say the least, thank you for talking about this. It’s much appreciated. People who aren’t in Agriculture don’t understand how Mother Nature can soooo mess things up.

    • I agree, Kathy — it is very hard to truly understand all the challenges of agriculture without having first hand knowledge. I think that I am likely a prime example of this as it really took me several years on the farm before I could properly conceptualize the power of Mother Nature. It took me even longer to wrap my brain around the power of the markets…

      It is a hard subject to explain — or even talk about. But, the combination of Mother Nature and the markets will make long term financial sustainability very difficult for agriculture because it does not make a good environment to attract our kids back home — or even new young people who want to farm/ranch that grew up outside of agriculture to help provide the next generation.

      Stay strong — there is something eternally optimistic about us — I think it is tied closely with our faith and desire to be good stewards to the land. I know that I love the day to day animal care, and there is something priceless about working to live in harmony amidst the great power of Mother Nature.

      Best,
      Anne

  6. Rex Peterson

    The thing that amazes me about commodity markets is how small a change in availability it takes to make dramatic differences in price. All the cattle feeders I know were not aware that beef was building up in the coolers as they held onto cattle waiting for a better price last fall. Sometimes ignorance is certainly not bliss.

    • Ignorance is rarely bliss — especially in agricultural business. Our feed yard remained current during the entire disaster and was still unable to properly protect ourselves. I think that “currentness” at the feed yard level is critical for natural resource management. At the ranch level, there is more flexibility as long as your feed supply remains plentiful. You are correct that those ranchers that held cattle through the fall were at a disadvantage during the winter months due to the heavy feed yard losses.

      Hopefully we will all continue to “get smarter” going into the future, but the markets (and the increasing volatility of them) provide an enormous challenge to farmers.

      Take care,
      Anne

  7. Rex Peterson

    Happy Easter Anne, The Lord is risen and alive in your life!
    As I consider the economics of agriculture we are all pretty much locked into much of what we do, but there is still some flexibility even though that may still not keep us financially healthy. We can share risk by forward contracting or selling on the board or selling a share in what we are still producing. We can modify what we produce by changing class of cattle or how long we keep them. But any of that may not be sufficient in the face of big market forces.
    From your comment, you followed discipline which is one of the best long run strategies. I know a man was responsible for designing the computer system to handle the trading flow for a mutual fund. So I asked him about volume and how it related to big market shifts. He told me the investors who made decisions that way always went the wrong way to protect their money.

  8. Hi Anne,
    Love your blog! I grew up in LIncoln, NE. and am currently a resident of a big city suburb. I am participating in a program sponsored by the Illinois Farm Bureau. Through the program, lucky ‘City Moms’ like myself, are able to tour Illinois farms and learn about farming practices in Illinois. The family farmers we have visited have been gracious and informative hosts. The farmers rarely bring up the topic of money or income but when pressed they have answered questions. I have been amazed at how often the response is something like, “Well, last year we didn’t make any money.” or “This year we barely broke even.” I have loved being a participate in this program. It has been fun and very enlightening. Based on your blog post It sounds like it’s the kind of program that would be welcome and beneficial even in Kearney, NE. Thanks for your blog. Keep posting and I’ll keep reading!

    If you’re interested, links below.
    http://www.watchusgrow.org/
    http://runranfam.blogspot.com/search?updated-max=2015-11-29T08:54:00-08:00&max-results=7

    • Hi Angie! Thanks so much for the nice note. I have read some articles about the Illinois Farm Bureau program and agree that it is awesome🙂 I would love to see Nebraska do something similar for interested folks in the Omaha area. Our family truly loves participating in the NE Agriculture in the Classroom program, and enjoys having a 3rd grade Omaha class each year. It would be great fun to do a program similar to Illinois for adults. My favorite farmer is a member of Farm Bureau so I will ask him about it!

      Thank you for reading and following. I grew up in the city (although I have now been married to my favorite farmer for almost half my life) — I don’t know where the years go! I love life on the farm, and we navigate the challenges as best as we can while also focusing on the blessings of life in rural America. I look forward to hearing from you again. If you ever get back to Nebraska and want to head toward Cozad, we’d been excited to meet you and your family and give you a tour.

      Best,
      Anne

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