Now is the time for some good farmers to come to the aid of their farming infrastructure, though, as one farm economist stresses, the operative word here is some.
Extension Economist Max Runge is the first to concede that there “is no one strategy or right course of action for every farmer.”
“Every producer's situation is a little different,” he says.
Even so, he says some producers with strong financial standing should consider not only undertaking repairs, but even expanding farm structure, despite what may prove to be an especially tough farming economy next year.
“If a producer is strong financially and has good liquid assets, now may be the time to undertake some improvements around the farm by remodeling shops and adding new buildings, such as grain bins and other storage facilities,” he says.
What could possibly prompt farmers to part with money at a time like this? The fact that so much of the state's agribusiness already is feeling the pinch of this recent downturn and are willing to offer sweet deals.
Runge is the first to concede that farmers, by nature, are a cautious lot who typically hold their cards close to their vests during times such as these.
“A lot of people say hold cash and pay down debt, and that may be the best situation for most people,” he says.
But just as sales guru Og Mandino advised his readers to “seek out the seed of triumph in every adversity,” Runge says there are plenty of reasons why farmers — the well-positioned ones, at least — should view at this economic downturn as an opportunity rather than a threat.
“There are opportunities, and that is the way you should look at it,” he says. “Realtors are being told that ‘now is the time to grow your business,’ and farmers need to operate like that too.”
One option may even involve diversification.
“Producers who have been growing corn and soybeans for years may want to look at some vegetable crops, not as something to replace more conventional crops but as something to add more diversification as well as a little more liquidity and income at a different time of year when cash flow may otherwise be slow,” he says.
Likewise for some, the sagging cotton market may be an incentive to consider new cropping strategies, which, in turn, may require investment in new infrastructure and equipment.
Nevertheless, Runge stresses that this optimism should be balanced by caution and, equally important, realism. Farmers' first order of business should be finding out where they stand and, if that standing is strong, knowing how they can profit from these changed circumstances.
“This is not a time to say, ‘I think I know where I am,’ it's a time to find out where you are and to know your assets, your liabilities — basically, what your balance sheet shows,” he says.
Equally critical, Runge says, is for farmers to see the big picture, focusing not only on what will get them carry them through the next couple of years but that will also benefit them in years, if not decades, to come.