Business is Business

My business experience was logged almost exclusively in the corporate world. I donned “business attire” Monday through Friday to wrestle with office politics, airline travel, expense accounts, the fine points of human resource and career management, and fought through the unwieldy process for approval of annual budgets - all of which occurred in a climate-controlled environment.

Last week I brushed shoulders with scores of experienced professionals engaged in a completely different kind of business – AGRICULTURAL FARMING. A group of about 80 people, including me and Ron, attended an auction of 60 acres of farm land in Paxton (a small town in central Illinois). Among the others present were independent farmers, land brokers, bankers, and investors. The level of interest in the room was palpable, and became even more evident once the auction began. A flurry of bidding quickly went from $5,100 per acre to a final sale price of $7,450 per acre. The buyers, a local family, were congratulated with handshakes and claps on the back. To seal the deal, they wrote out a check for 10% of the total purchase price of $447,000. It was all over within 15 minutes!

It would be a mistake to misjudge the sophistication level of the auction attendees by their favored fashion - jeans, overalls, fleece, and ball caps. Farming is big, big business that requires skill and experience, and should not be characterized as merely “sowing and reaping”. Calculations are used to determine the optimum planting depth for seeds, and timing for fertilization, weed, and pest control, based on history and conditions. During critical periods, farmers work 24 hours a day to plant, cultivate, and harvest their crops, with the help of expensive specialized equipment. Paperwork is required to secure valued government subsidies and to satisfy the IRS. Farmers use the futures market to hedge against falling prices, and keep a keen eye on the commodities market to pick the best time to sell their harvested crops. All field work is accomplished at the mercy of Mother Nature, who adds a sadistic variable to the mix in the form of rain, snow, wind, drought, pestilence, and blazing or freezing temperatures.

Farming’s effect on the overall economy is broad. Here are just a few examples...  Banks provide the credit required to purchase equipment and carry mortgages. Brokers package land sales and promote them, earning their percentage. Insurance companies sell crop insurance. Large corporations invest in land farmed for profit. Grain companies haul crops and provide storage in grain elevators. Genetic plant research drives improvements in seed and fertilizers that maximize production and yield per acre. The equipment needed to prepare the soil, plant, and harvest sells for hundreds of thousands of dollars – or is made available to lease. Financial analysts track earnings of Caterpillar and John Deere, as an indicator for commodities futures.

The global business environment is complex and fascinating. The most savvy business people strive to have a broad view of how the pieces fit together and affect the worldwide economy. Business is business. Be very aware that what you do is part of a much bigger picture.