Managing an agricultural business has never required a stronger management mindset than it does today. Geopolitics, tariffs and sanctions, compounded by consumer and societal changes layered with extremes in weather and natural disasters have created unprecedented economic volatility.

Looking ahead, the dollar’s dominance in world trade faces challenges from undisciplined fiscal policy, impacting long-term interest rates. The southern hemisphere, with its vast untapped resources and BRICS nation alliances (Brazil, Russia, India, China, and South Africa), presents formidable competition to U.S. agriculture.

With these headwinds, how can management teams set strategy for both survival and opportunity?

Your Business Compass

Whether navigating open waters or dense forest, you must maintain focus on your compass. Manage the controllables in your business and life and manage around the uncontrollable factors. Headlines, technology, and information sound bites are distractions that scatter focus and energy.

The key is maintaining focus on your written core values, which lead to written goals.

The Power of Written Goals

The statistics are striking:

• Less than 4 percent of Americans write out their goals
• Under 20 percent of leading agricultural businesses conduct annual goal-setting
• Written goals are 42 percent more likely to be achieved
• People with written goals earn 4-9 times more over their careers

Balance Through Deliberate Goal-Setting

To maintain balance, be deliberate in your goals. List your:

• Business goals
• Family goals
• Personal goals

For a regenerative mindset, spell out physical, mental, and spiritual goals with both short-term (under one year) and long-term (five years or more) timelines. Your core values and goals provide the pathway to your “North Star”.

The key: Occasionally monitor progress and determine if course adjustments are needed.

The Five Percent Advantage

The late Dr. Danny Klinefelter, a good friend and founder of The Executive Program for Agricultural Producers (TEPAP), analyzed graduates of this elite training program. His conclusion? They are “five percenters” – 5 percent better than peers across all business areas:

• Business trend analysis
• Production and operations performance
• Finance, risk, and marketing
• Management
• Human resource management (most important)

What’s Their Secret Sauce?

Production Excellence: They establish production coefficients within available resources, using the time-tested principle: marginal revenue must exceed marginal cost.

Operational Flexibility: Some implement cutting-edge technology; others use conventional approaches. The key insight: One method doesn’t fit all situations.

Efficiency Focus: They follow the principle “better is better before bigger is better;” focusing on efficiency before growth to improve effectiveness.

Warning: Don’t fall into the trap of knowing the cost of everything and the value of nothing. Sometimes increasing expenditures in value-adding areas is necessary, even in cost-cutting environments.

Own Your Financials

Financial liquidity and cash flow are the choke points—whether in government, business, or personal households. Ownership of financials requires deliberate monthly or quarterly check-ins.

Two Common Financial Mistakes

1. Annual-only financial focus during tax season, often leading to spending a dollar to save twenty cents in taxes
2. Failing to recognize long-term implications on debt obligations or liquidity reduction

Marketing and Risk Management: Non-Negotiable

In a chaotic economic environment, marketing and risk management aren’t optional; they are requirements. Crop and livestock programs protecting price and cost are critical.

Not an expert? A trusted advisor can be a critical team addition.

The Human Resources Revolution

A vintage dairyman at last year’s seminars captured this perfectly:

“During my tenure, the focus was production for profits. My daughter, who’s now the transitional owner and manager, finds that profits are impacted by her ability to manage human resources both inside and outside the business.”

From Independent to Interdependent

Historically, producers were independent, preferring minimal people interaction. The future belongs to interdependent producers who leverage talent in volatile economic environments.

This means building an advisory team:

• Lenders
• Crop/livestock consultants
• Peer producers
• Other specialists

This team provides essential sounding board support and generates both business and personal regenerative energy, maintaining the positive attitude crucial for success.

The Bottom Line: Every generation faces unique challenges and opportunities in different contexts and timing. A strong behavioral management mindset can tip the odds for success in your favor.

Your Next Step: Assess where you stand on each of these elements and identify your priority areas for improvement.