Where is my farm business heading?
The only way to answer this question with any degree of certainty is to plan.
As with all good plans, this needs to be flexible as the environment we live and work in is an ever changing one.
It is a fact that cane growers, and other primary producers, operate in an increasingly complex and risky environment.
Some of the issues we face include the cost of land and technology, climate uncertainty and market volatility.
Managers of businesses that succeed tend to have realistic expectations and a clear sense of purpose as well as a strong will to succeed.
These managers monitor costs and develop an understanding of their strengths and weaknesses — critical attributes when it comes to achieving economic viability.
Good farm business management means having an effective planning process and many of our regional cane growers are very good at this.
There are basically three levels of planning our growers consider:
Strategic planning: 1-10 years:
This can often be the most challenging as it requires serious thought and is way beyond the current situation on the farm today.
Strategic planning is necessary for longer term improvements for example, obtaining additional land through leasing or purchase to gain economies of scale, while not affecting the balance sheet too much.
It may include succession or transition of ownership planning and may also involve the selling of major machinery and changing to the use of contractors.
This is the work that needs to be achieved within a year.
The planning for the season will include reactions to predicted and/or unpredicted events as the season unfolds.
Tactical planning is easier than strategic planning and more immediate as there are deadlines to meet each year.
An example may be spreading your planting over May to August to balance the workload, and other operational matters.
Short term planning (weekly and daily planning):
Many people find this easier as it is more immediate.
Examples may include meeting with family/contractors/farm staff to organise tasks for the week.
This planning is reactionary as flexibility is needed for weather to, for example, spray or spread lime. The good manager will be looking for ways to overcome bottlenecks and reduce complexity.
So, in a nutshell:
Strategic: Where are we now? The plan to get where we need and want to be in 5-10 years.
Tactical: Where are we now, and where do we want to be by the end of the year?
Short term: Day-to-day planning, highly specific and our outlook is where we want to be at the end of next week.
Cane growers in 2018 are better business managers out of necessity — with the uncertainty of the global sugar price, high electricity and other input costs and environmental obligations, the clear objectives that come with good planning increases the certainty of a sustainable future for all of our family-owned cane farms.