Family farms: Family ag tackles industry challengesWritten by Saige Albert
Hasselbrook opened Northwest College’s Spring Roundup on Jan. 19 by explaining why family farm agriculture is important to rural America, as well as what producers can do to strengthen family farms and redirect public policy to build rural America.
“We are headed to a state where communities surrounded by farms and ranches will be operated by a few elite, with a majority of poor laborers and virtually no middle class. That is not progress, that is social decay,” said Hasselbrook, “and it is being helped along by misguided public policy that focuses on subsidizing the rich and powerful and failing to invest in creating a future for rural America.”
Longevity of the family farm
Investing in strategies that enable family operations not only to survive, but also to thrive, is very important to bring in more generations. The longevity of family farms begins with efficient production.
“It is absolutely critical to control and manage costs in agriculture,” Hasselbrook explained. “Competition is intense, so most people are trying to become low-cost producers.”
By adding value to operations or adding an enterprise to production, producers can increase the end value of a product and increase their profit margin, noted Hasselbrook.
“Producers can add more value to what they produce by offering something different that appeals to a particular segment of the market – something that makes the product worth more than regular beef,” he said.
However, value–added products have a caveat, Hasselbrook added.
“If you are going to start with a unique product, it has to be something that is harder to do and requires more effort and skill,” he explained, adding that if it was easy, everyone would produce the value– added products.
“Producers must find their comparative advantage for their operations in agriculture to put themselves in the position to weather the storms,” said Hasselbrook. “They need to look at what they can do at least as well as their competitors.”
Value–added products, such as natural beef, provide opportunities for ranchers to get involved and produce a unique product.
“Country Natural Beef, for example, is a very innovative cooperative that has spread throughout the Midwest,” said Hasselbrook. “They identified a niche in the market and figured out that there is a group of consumers willing to pay a premium for beef produced in a traditional way on a family operation.”
Hasselbrook noted that the operation also learned how to work together to market their product on a larger marketplace.
To isolate potential branches of the market that may provide profits, Hasselbrook said, “By doing a market analysis, you can get an idea of what to go with and start putting together a business plan.”
USDA offers value-added producer grants that are an option to provide funding for some endeavors, said Hasselbrook, adding, “Producers must be willing to put some of their own skin in the game.”
Risk management in
He also added that diversification by adding an enterprise can mitigate potential risks, and that there are several different ways to diversify an operation.
“The key is to not avoid risk, but to manage risk,” said Hasselbrook. “For family operations, often times that involves using skills, management and judgment of the farm.”
Operations that have diversified to manage risk have succeeded by taking advantage of resources such as wildlife and waterways on their property.
“One ranch in the Nebraska Sandhills has a loop river that runs through the operation, so they have a canoeing and floating operation. They have a lot of deer, so their son guides hunters from the cities,” explained Hasselbrook. “Their most profitable enterprise is bird watchers. They bring in high-dollar bird watchers from the city to watch prairie chickens mate.”
Hasselbrook continues that management goals involve managing grass for both the wildlife and cattle, but diversifying the operation has allowed it to support three families, as opposed to only one.
“They were adding an enterprise and continuing to farm and ranch, but they were diversifying their income,” explained Hasselbrook. “The were managing their risk so they have something to fall back on.”
Hasselbrook also said the Internet is a game-changer for marketing opportunities.
“It wasn’t that long ago that business owners had a customer base of just the locals,” said Hasselbrook. “Today, I could operate a business in Lyons, Neb. and my market is the world.”
Internet use on the ranch can be useful beyond reaching a larger customer base, as well, and Hasselbrook said options to add other enterprises to a ranching operation could include running another business online.
“We have businesses running all over the country from small towns that are making it work,” said Hasselbrook. “Producers may have a college degree in something other than agriculture, and they can utilize that by running a business right off the ranch to provide accounting or marketing or payroll services to companies in larger cities.”
Washington, D.C. and
Because public policies have such a large impact on family farms, Hasselbrook said that it is also important for producers to stay on top of elected officials.
“Washington isn’t inherently corrupt, but when we send people to Washington, if we don’t remind them where they came from and why we sent them, they have a tendency to forget,” he explained. “Our job is to stay in touch with them and tell them what their job is.”
The threats to small family farms in rural America come from an increase in large operations, and the public policies that subsidize wealthy operations are ever-present, but with the same perseverance, courage and willingness to make sacrifices as those who pioneered farming and ranching communities across the country, Hasselbrook said, “We can rebuild family agriculture and we can re-pioneer rural America.”