Threat or Opportunity

A few days ago, I shared an article with the PCC Discussion Group that summarized a recent survey of agricultural bank presidents and CEOs.   Those bankers expect a substantial increase in foreclosures for the next five years – due to what they refer to as a “slumping ag economy.”   Do you view this information as a threat or as an opportunity?

Most status quo producers see this information as a threat.   If the so-called “slumping ag economy” worsens or lasts longer than expected, they are at risk of losing their family farm or ranch.   Most PCC customers, on the other hand, view this information as a HUGE opportunity.   Since they are two to four times more profitable than the average cow-calf producer, they are not bothered by the so-called “slumping ag economy.”

The cow-calf business is at a major turning point.   What has worked so well for the last 20+ years will NOT work for the next 20 years.   Those who are the quickest to adapt and change will be in the driver’s seat.   Those who are the slowest to adapt and change will get left behind or run over.   It is all about adapting to the changes that are occurring within the cow-calf business.

The old paradigm of increasing production per animal is being replaced by the paradigm of increasing production and profit per acre.   These two paradigms are antagonistic toward one another.   As production per animal increases, production and profit per acre decreases.   With the cost of land, feed, fuel, labor and other inputs increasing, it is becoming more and more imperative that cow-calf producers make a paradigm shift.

Those who are unwilling to adapt and change will eventually be forced to sell out and their children and grandchildren will be forced to get jobs in the city.   Those who can adapt and change will be in a position to buy out their neighbors.   They will be able to make it possible for their children and grandchildren to stay on the family farm or ranch.   Mark my words, there will be more opportunities to advance in the next five years than there have been in the last 20 years.

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