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Home > The Off Farm Income Podcast > OFI 465: Are You An Efficient Farmer Or Can You Be?
Podcast: The Off Farm Income Podcast
Episode:

OFI 465: Are You An Efficient Farmer Or Can You Be?
Category: Business
Duration: 00:00:00
Publish Date: 2018-06-22 01:30:07
Description: SHOW NOTES KEY IDEAS:  I want to start off by talking about Dwight Eisenhower’s method for managing his day.  He broke issues that came up during the day into four quadrants: Quadrant 1: Important and urgent Quadrant 2: Important but not urgent Quadrant 3: Not important but urgent Quadrant 4: Not important and not urgent When an issue arose it was placed into one of these four quadrants.  Once it was classified into one of these the determination of what to do about the issue was pre-decided: Quadrant 1: work on it immediately (leave some time in your schedule for these) Quadrant 2: try to maximize the time working on projects that fit into this quadrant Quadrant 3: Delegate or reschedule and keep a small amount of time in your schedule for these Quadrant 4: Ignore or dismiss On one of our train rides in Germany I read a study released by the USDA titled - “Off-Farm Income, Technology Adoption, and Farm Economic Performance”.  I actually read several papers while on our trip, but this was the only one that had something I wanted to share with you. There were a few interesting findings from this study? First, there is a correlation between the size of your farming operation and efficiency. For example, if you are operating a much larger farm where you depend much less or not at all on off-farm income you tend to be more efficient.  On the contrary, if you run a smaller farm where you are more dependent on off-farm income you tend to be less efficient. This makes sense for a couple of reasons: First, if you have a small farm it is more difficult to be profitable, and your profits probably will not be enough to cover your household expenses. Because of the financial limitations of a small farm, you will likely have to work more to make up the income shortfall, thus you have less time to devote to your farm and to the development of practices of greater efficiency. And, if you are just starting out and trying to purchase land, you are likely to purchase it as far away from a job center as possible, considering your commute, so that the land is more affordable. So, in addition to work you will be spending much more time in your vehicle and less on your farm. Those are several of the reasons I advocate for entrepreneurship as your form of off-farm income: reduce your commute times control your schedule when the work is done, that time is yours to use as you wish, i.e. farming Another interesting finding was how operating decisions on the farm were made based on your dependency on off-farm income.  Take for example, the use of no-till drilling practices.  Perhaps if you use this method you will not yield as much as you might have with traditional tilling practices.  Or, maybe the practice of no-till limits some of the options you would otherwise have to plant in that particular field. If you were able to devote 100% of your time to your farm, you would likely choose the method that is going to give you the greatest short and long term returns in terms of both soil health as well as profitability.  However, if you can only devote 20% of your time to your farm, you are likely to choose the method which is easiest for you to complete. White Bird Pass (The Peaks In The Distance Are The Seven Devils) So, as a farmer with off-farm employment you would be more likely to choose no-till because that requires less passes through the field, less time on the tractor for that particular field and you are freeing up time for other necessary projects.  Therefore, if more time devoted to off-farm income creation is necessary, some farm management decisions will be made not based on profitability but based on ease of completion. This also holds true for whether or not farmers choose genetically modified crops. The study states that in many cases there was not increased profitability associated with the use of herbicide resistant seed.
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