Successful Farmers

The University of Minnesota has a database of 3500 producers that they've studied trying to answer the question,… why are some farmers more profitable than others. In this part of the economic cycle, what are profitable producers doing differently from those who may be sliding into financial troubles? Dale Nordquist is the associate director of the U. Of M's Center for Farm Financial Management and he has provided some answers.

“It's not age. We found that younger producers are doing very well on average, so the beginning producers are really performing pretty well. Maybe with some help, obviously from from the older generation, but they're they're not really a problem group. It's not really size related. We see struggles in both the the smaller producers and the larger producers. And of course, if there's problems with large producers, that gets multiplied.”

If it's not age and it's not size, what is the difference maker?

“Well, it really seems to be cost control is the biggest thing. We see a huge difference in terms of the per acre costs for all the different inputs and it's consistent. A producer who's paying more for inputs will consistently pay more, year after year after year. A producer who is paying less somehow is managing to pay less. I don't know how they're managing to do that. We can't see that in the data. But it is it is different. They’re paying less for seed. They're paying less fertilizer. They're paying less for every input, almost including rent. And when you add all that up to the bottom line, it's hundreds of dollars of difference per acre, just for direct inputs, for instance. We looked at corn seed costs. It's about $12 per acre. Fertilizer, t’s in that same range. Rent is more like 30 to 40 dollars difference per acre.”