Last time, we examined the brighter side of the agricultural economic downturn. Specifically, why now may be a good time to start farming and ranching as compared to five years ago, at the peak of the economic cycle. My good friend, Dr. Danny Klinefelter of Texas A&M University and the visionary of TEPAP (The Executive Program for Agricultural Producers) has often indicated that timing is critical in business startups and growth. Last week, we covered interest rates, generational transition, and machinery and livestock values. Now, let’s consider some additional factors that make this is a good time to move into agriculture.
The fact that agriculture is not a “one size fits all” industry promises a dynamic future. One can argue that the agriculture industry is in a consolidation, decreasing the number of players at all levels of the industry. However, there is an increase in entrepreneurial side businesses, which in many cases are started by the multi-tasking millennials who can juggle several enterprises. In addition, technology affords some the opportunity to maintain off-farm professional employment and successfully farm or ranch on the side.
Others are capitalizing on niche markets. Yes, local, natural, and organic should no longer be seen as fads, but rather as growing, viable markets. Many businesses have aligned with the local consumer marketplace, and in some cases, international markets. For examples, providing a specialty soybean to Japan, or partnering with a large food chain to provide the gate- to- plate appeal can both be energizing, profitable opportunities.
Current and future trends of the millennial generation point to a control of assets through rent or lease, rather than ownership. Since World War II, this trend has emerged in the industry with a small business type of model. Along with collaboration and talent sharing, these trends are more common with the younger generation of aspiring agriculturalists. Additionally, the approach of interdependence as opposed to independence is also an advantage of this generation. Leveraging improvement through collaboration will keep them engaged and prospering in the industry.
It is true that there will be population growth and an increase in the middle-class throughout the world, which will continue to create opportunity. However, the real opportunity is more efficiently utilizing resources including land, labor, capital and information in a manner that positions the business to be competitive.
Finally, raising a family and giving back to the community are often attributes overlooked in this high-tech, non-stop world. Often connected with agriculture, these attributes deliver a sense of accomplishment as well as humility and graciousness. In fact, agriculture offers a unique work culture reliant on strong values.
Developing one’s own unique system to meet the consumer needs in a profitable and sustainable manner is one of the major reasons to be optimistic about the future of agriculture. This diversity along with timing, opportunity, changing consumer markets and perspective are all important attributes in today’s economic environment that favors those entering or growing in the industry.