“Where Farm and Family Meet”
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THE LAND, SEPTEMBER 6, 2013
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Q&A: One farmer’s viewpoint on farming stress farmers? By DICK HAGEN The Land Staff Writer Meyer: I don’t see indicaSac county, Iowa, farmer tions of increased behavioral Jim Meyer speaks from expeissues among farmers. High rience on the issue of farm land prices and higher cash stress. rent are causing some stress. However increased cash flow After graduating from Iowa from higher corn and bean State University, Meyer prices have caused over-optitaught vocational agriculture Jim Meyer mistic commitments. Farmers for a few years, then went into ag banking, before returning to the have been very successful at bidding home farm of pork production and up input costs until profit is non-existent. I am not hearing about threatgrain. He also served two terms as a state ened suicides like we had in the early representative in the Iowa Legisla- ’80s. Q: Are increasing debt loads a ture. The following is a Question & Answer session with Meyer on the contributing factor to increasing divorce rates within rural famitopic of stress. Q: Because of the high stakes of lies? Meyer: Marital disharmony comes farming today, are we seeing more behavioral issues among from two major causes: financial prob-
lems and lack of sexual compatibility. Successful farming operations include a business plan that involves all members of the management team. Farmers that do not involve their spouse are missing the boat. Not only are the spouse inputs valuable, but they are going to provide muchneeded support. This harmony will be there if everyone knows what is going on and why. The same is true of children and their spouses. Lack of transparency is like playing basketball with only one hand. You can do it, but it works a whole lot better with two. Most spouses have off-farm jobs or careers and the juggling of schedules and support for each other, as well as the kids, is so important. Q: Due to technology in both farm equipment and medicine, farmers stay healthy longer and farm longer. Is this causing strife with sons and daughters wanting to become farming partners? Meyer: The problem of fathers using sons and daughters as hired hands has been around since the sod was broken. This happens because Dad is insecure. He can’t stand to be challenged or have his judgment questioned. Thus those around him are not encouraged to share their management skills. Technology has been a real plus in involving the younger generation. Dad simply has to depend on the younger, brighter tech minds to make the equipment work correctly. One of the smartest plans I know is allowing young people to own and raise livestock and crops to earn money for more education or to buy into the operation. It always seemed to me it was easier to give up a little income over a 10-year period as the young people grow up, rather than come up with $20,000 to $30,000 the year a child wants to go to college, buy a house, or start a business. Q: Should outside counsel be a first step when farm families sit down to discuss a transition of the farm? Meyer: Another opinion is always good if you are secure enough to handle the comments. Most successful business operations use paid consult-
ants. These are doctors, dentists, tax preparers, crop consultants. We are also good at collecting as many pointers as we can for no pay. The role of consulting is very clear. If you are going to pay someone for advice, either pay attention and use the information as best you can, or fire the consultant. Q: Can farmers start with a visit to their county Extension office when they want advice on how to avoid a potential financial crisis? Meyer: Because of media, social and educational change, the county Extension office help has diminished. Extension still has some value, but requires a cell phone number of the specialist you need. As is the case with crop and livestock production, financial management help now comes from the private sector. It costs more, but the ones that are in business for three to five years or more are worth it. Q: Is there a substantial difference between the stress load of farming today versus 30 years ago? Meyer: Thirty years ago would be the 1980s. Except for the 1930s, farmers have never experienced more stress than the period 1975-85. We have a similar situation now with commodity prices, land prices and cash rent at a high level. I am sensing that there are enough of us who experienced firsthand that earlier stress period and are going to be more reserved. The stakes in production agriculture have never been higher. But ag loans are down, ag equity is high, machinery has been updated, mostly to excess. Homes have been built new or seriously remodeled, and bankers have basically lost control of farmer borrowing, because the equity is so great. All this “new equity” has allowed more land to be bought and rented, thus operations are getting larger. With good management, farm operations with 1,500 acres or more have a considerable net profit advantage. It is a different stress. We are stressed to stay on top, versus 30 years ago we were stressed to get off the bottom to stay in business. ❖