Episode 44: 5 Traits of a Successful Farmer Part 1

This episode dives into a question every producer, big or small, has asked at some point: What really makes a farmer successful? In a world where margins are tighter, markets are more volatile, and technology is changing faster than ever, the traits that set top producers apart aren't just nice to have—they're essential. We're going to break down the 5 key traits we consistently see in high-performing farms across the country. These aren't hypothetical ideas or academic theories. They're real, practical characteristics that show up in operations that thrive through uncertainty, grow with intention, and build long-term resilience. From strong business skills to smart financial management, industry leadership, and a commitment to lifelong learning, today's conversation will help you look at your own business through a sharper lens. Whether you're a first-generation farmer or carrying on a multi-generational legacy, these traits can shape your trajectory.

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Transcript

SPEAKER_02 0:00

Today's episode dives into a question every producer, big or small, has asked at some point. What really makes a farmer successful? In a world where margins are tighter, markets are more volatile, and technology is changing faster than ever, the traits that set top producers apart aren't just nice to have. They're essential. We're going to break down the five key traits we consistently see in high-performing farms across the country. These aren't hypothetical ideas or academic theories. They're real, practical characteristics that show up in operations that thrive through uncertainty, grow with intention, and build long-term resilience. From strong business skills to smart financial management, industry leadership, and a commitment to lifelong learning, today's conversation will help you look at your own business through a sharper lens. Whether you're a first-generation farmer or carrying on a multi-generational legacy, these traits can shape your trajectory. So settle in, grab a cup of coffee, and let's explore what it takes to succeed in agriculture today.

SPEAKER_04 1:09

Welcome to Beyond Agriculture, the podcast that takes you beyond the scope of ag and into the real life stories, conversations, and events taking place in our community. Who we are and what we do is beyond agriculture.

SPEAKER_02 1:30

Welcome to Beyond Agriculture, the podcast where we explore the business, the mindset, and the people shaping the future of farming. I'm your host, Cassie Johnson, and today I'm excited to be joined by our president and CEO, Jonathan No, as well as our vice president and CLO, Richard Medley. Thank you both for taking time to be here. I know you both are extremely busy. I appreciate that.

SPEAKER_05 2:01

Well, I will say that you know I've been really embarrassed that you haven't invited me back in years. I was worried that I really have way too much of a face for this.

SPEAKER_02 2:11

So you you do have a great face for this. And I will say we do get a lot of uh people that listen when we have both of you on. So we just got to keep you coming back a little bit more often, I guess.

SPEAKER_05 2:22

All right, glad to be here.

SPEAKER_02 2:24

So it's already been a very busy March. Things are going to get even busier now that we head into spring. But we recently wrapped up our annual meetings. They were very successful. And might I add, the stakes were amazing as usual. So, Jonathan, can you share a little bit about what took place at the meeting?

SPEAKER_03 2:42

Sure, Cassie. We had two sectional meetings again this year, one in Harrisburg, one in Lexington. They were very well attended. I think we had 325 total in attendance for both meetings. We had a successful election again. Joe Myers was re-elected to the board. We established our nominating committee for 2027. So all the business was taken care of. The stakes were really good again this year. And we even did that through some pretty tough weather on the first night. Some rain, cold, but all of our grill masters out there, which are our ag credit staff, did a wonderful job again. So it was a huge success once again this year.

SPEAKER_02 3:25

Yeah, normally we have the the northern offices will cook steaks when we have it down in Harrisburg, and then the southern offices will cook steaks when we're in Lexington. And I do recall that when the southern loan officers were cooking in sunshine and warm weather, that the loan officers from up north were pretty upset that they had all that rain and wind. But it did turn out.

SPEAKER_03 3:50

And it it happens that way. You just never know. Early March, you know what kind of weather we have in Kentucky that time of year. So it's definitely a flip of the coin.

SPEAKER_02 4:00

I mean, really, with the way it's going, they could have gotten snowed on. True. So it could have been worse. But we also have another great event coming up, our customer appreciation day, which is on April 7th. All of our branches will be serving food and handing out the PAT checks. So be sure to mark your calendar and keep an eye on your mailbox for your invitation. We sent the postcards out last week. We are excited to also roll out something new. The customers receiving patriot patronage checks can now choose to have their check deposited directly into their bank account.

SPEAKER_03 4:33

Yes. And that is something new. And, you know, first of all, I'll I'll talk a little bit about our customer appreciation day. And, you know, it is our chance to give our patronage out to our customers, which is, you know, that's a key to being a part of a cooperative, is that we're adding value back to the relationship with our customers. And patronage is is uh one of one of those areas where we we give back. And so we're excited about that. We're giving out another good patronage in 2026 here. But yes, it's also a chance for us to just meet with customers, let them know how much we appreciate them, give them some food, have a little fellowship with them. But we know that, you know, dealing with checks, and some of these checks are sizable. Some folks, you know, are it's a little tougher for them to get in the office and pick those checks up. So we do have an option now uh for ACH direct deposit of our patronage into our customers' bank accounts. And that's just you know a convenience measure to continue adding value to our relationship with them. So be on the lookout for that. If you're one of our customers, when you come in the office, you we uh you can sign up that day if you like. So yep.

SPEAKER_02 5:49

And reach out if you are not going to be able to come into the office, reach out to your local branch, talk to the ladies at the front desk, and they'll be able to get you signed up for it as well. Yes. So today's episode dives into a question every producer, big or small, generally has probably asked themselves at one point or another, what really makes a farmer successful? And we have two very knowledgeable, very intelligent guest speakers with us today that are gonna help us break this down a little bit more. And uh, we're gonna dive into some of Richard's thoughts on a few of these and and really see, you know, what uh maybe even give a little bit of perspective to the listeners to make them think a little bit differently about how they're operating their farm. So we're gonna go ahead and dive in just off the get-go. We're gonna talk about, you know, kind of the business mindset and decision making. Farmers often say farming is a lifestyle, but how is it equally a business?

SPEAKER_05 6:47

Right. Well, Cassie, it's really in how you look at it. I mean, you know, in central Kentucky, we're blessed to have very large farmers, very small farms and everything in between. You know, a lot of people really want to raise their family on a on a track of land, you know. They just want to be out in the country and then do some of the things that they, you know, have a few cattle, have a garden, uh just do a lot of things out in the open. We're blessed that our territory allows us to do that. And you know, I think everybody's definition of success is is quite different. And, you know, it just really depended on what you want out of it. Do you want it to be a lifestyle or do you also want it to be a business? Because, you know, I don't know if anybody's seen these record cattle prices week after week, but it it doesn't take long for a a hobby or a small, it's not a good word, but you know, a a small farm to all of a sudden have several thousand dollars in gross sales to where all of a sudden, you know, this is real money. And so it's just how you manage that and and your perspective on it, but everybody seems to have a different approach to it.

SPEAKER_03 7:55

Yeah. I would I would say too, you know, just traveling around the state, you know, and getting to see different parts of the state and the types of operations that are out there across the southeast, which you know covers the majority of the Ag First District where we're affiliated. We're not entirely unique, but we're pretty unique in central Kentucky. And I believe that that's that's a good question because you know, there's a lot of part-timers. A lot. A lot of part-time farmers in central Kentucky. And Richard's right, the territory, you know, it allows part-timers to be successful, but they wouldn't be part-timers if they really didn't want that lifestyle and have a love for farming and agriculture. And I think we're fortunate that we can support, you know, through whether it's you know, small cattle operations. We have the the landscape here to support small-time, part-time operations. And, you know, it makes up a lot of the ag production in central Kentucky. And I I tell people, anybody that will listen, you know, if you take the part-timers out of central Kentucky, the production of agriculture goes way, way down. So it's very important to ag in central Kentucky, and I think we're we're fortunate to be in this territory.

SPEAKER_02 9:15

So for those that, you know, determine that they're going to have a farm that is a business and not just a lifestyle, when you think about farm profitability, what are the biggest business mistakes you see for those that that where farming is their business?

SPEAKER_05 9:33

Well, I would say that we all have a tendency to want to acquire a lot of assets along the way. And, you know, when you go to the local gas station or Hardy's in the morning, you know, if you can talk about the the big tractor you got or something, you know, that's a lot more fun to talk about. It is than getting a check and going to the bank. And and I'll give an example of this. When I first got out of college, you know, this is going back several years now. But I I did my first farming enterprise was I grew tobacco a little bit, but I also did strawberries. And, you know, there was in a little small town, Springfield, Kentucky, Washington County, there wasn't many strawberry producers. And, you know, people would make fun of me and call me, you know, Mr. Strawberry. And, you know, I I took it because people like to give me a hard time, but I can give it back.

SPEAKER_01 10:27

But I think they gave you the hard because you were giving that money.

SPEAKER_05 10:31

Usually, usually I'm not the one uh instigating, I'll put it that way. Okay. You know, it just really depends. But I always told people, you know, I don't care. You can laugh all the way, but I'm the one laughing to the bank. Right. Like I care about putting the money in the bank, and you know, everybody's definition of what they want out of their operation is different. And so it just depends on do you want to try to legitimately look at this as a business, or do you want it to say, I'm able to have all this stuff. And like I said, people's definitions are different. They might just like having that shed full of equipment and everything out there to look at. I mean, I think it's pretty, but uh, it also costs a lot of dollars in today's time.

SPEAKER_02 11:15

It does, it does. And you know, oh, go ahead.

SPEAKER_03 11:18

Well, I was just gonna say there's definitely a balance there, and and you know, I think it's interesting what Richard's saying because and this comes back to the first question when we started talking about part-timers. You know, it is it is partly for the enjoyment and the lifestyle. And you know, I've talked about this before with people. You can see it with part-timers. You know, they're they want they obviously want to make some money, you know, it can't just be like an expensive hobby. They want to make some money at what they're doing, but they're also doing it after hours. You know, if you're spir certainly if you're a part-timer, you're doing it after hours on weekends in your spare time, and you don't want to be out there on old broken down equipment where you're spending all your time at the shop and trying to get things done. So, you know, having having nicer equipment, stuff that's reliable, you know, is kind of necessary. And and I think that's part of the allure. But as Richard said, there's that balance. You know, you have to be careful. It's nice to have that equipment, but can you truly afford it? And it does it become, you know, burdensome to your operation.

SPEAKER_02 12:27

Right. My next question is brought up because we actually we had our Annie's Project meeting last night, and one of our speakers, which Annie's Project is a meeting for women in egg, and one of our speakers was talking about making hard decisions and how sometimes it's easier for the female spouse in the relationship to make those decisions because they can pull a little bit less uh pull more emotion out of it and be a little bit more logical because sometimes those guys that are on the farm putting in the time, putting in the effort, and have the blood and sweat in it, you know, they they get a little bit more emotionally attached to things. So how would you what would you advise for, you know, the approach of making a biz business decision when there is that emotional connection to the farm?

SPEAKER_05 13:20

Well, Cassie, I'll have to agree with you a hundred percent. In the almost 20 years that I've been doing lending, I've seen a emotion when you're dealing with farmers, you know, they're very passionate about what they do. And, you know, it's very emotional when they have to think about do what what do I need this or that, or do I have to get rid of something? And they and that really weighs on you. And and something that I've taken, you know, it kind of relates to this over the course of what we do in lending is you know, it's it's no different than you being my best friend and you wanting a loan, but I know you don't need it. It's you know, sometimes you divorce the the person, the name from the situation which makes you look at it objectively. And and would you make that same decision if you didn't know the name at the top of it? And so you you gotta apply that with the same thing on your farm is you know, if I didn't know that that was, you know, my granddad's farm or my granddad's tractor, would I make the same rational decision that I should sell that because I need to pay something if I'm not using it, but if it meant nothing to you, you would probably come to that conclusion really easy. So I see exactly what uh the the Annie's group was talking about there. And I've seen that play out very hand, but you know, something I learned a long time ago is just divorce the the name from the situation uh and relate it that way to really make yourself objectively look at it.

SPEAKER_02 14:53

Right, right. Another you know part of the business decision making is when you have to start thinking about cost and controlling your costs. So, what strategies do you guys feel farmers could take to use control cost without sacrificing productivity?

SPEAKER_03 15:12

Well, you know, I think sometimes when you start talking about control and costs, that's immediately where people go, oh gosh, you know, well, that's going to impact my productivity. Because, you know, there's an assumption that you mean maybe cutting back on fertilizer, fertilize use, or something to that effect, or not buying the equipment that I need to be a little bit more productive. But, you know, it's not necessarily the case. A lot of times it's being proactive when you're going through the process of purchasing inputs to be out on the front end because you know, whether it's selling a product on the market or purchasing inputs on the market, you're you are taking a little risk there because you're bound by the market price at that time. And so we we see some producers that are you know very good at this at you know cutting down on input cost by purchasing at the right time. You know, if there's a period, you know, earlier in the season where you can maybe buy some fertilizer or fuel or something at a at a good price, they'll go ahead and buy in advance, even though they may have to hold it for just a little while, because at that point the market was good to buy. And so it's not it's uh not always about you know cutting back where production is impacted. Sometimes it's just about buying at the right time and taking advantage of the market.

SPEAKER_05 16:38

And and I'll I'll piggyback on what Jonathan's saying. I'll agree with him there. It's really just about managing every input, and it's not just a single item or anything, and and really just managing it to its fullest potential. And you know, I've been blessed over the last several years to work with some really good producers. You know, a couple, you know, come to mind that you know, we have a large-scale cattle producer, and you know, labor is one of his biggest inputs. And so what he does is they make sure, and and it's a team effort, him and his wife, so I don't think that just saying he, it's just him, but you know, what they do is they make sure that you know they have a certain threshold of cattle they need to have per person. You know, that's managing an input because having labor is expensive. And so you have to have enough of your cattle inventory to spread that over to make that input, you know, make that an efficient process. And you know, everything you do there impacts the bottom line because if you you still have the same amount of labor and less cattle, well then your cost per per cattle or hundred, however you want to look at it, it goes up. Right. And so you're just literally looking at all aspects of your operation.

SPEAKER_02 17:50

And one of those aspects would probably be even equipment. So a lot of times producers may view their equipment as an investment. Why is it important to maybe see it more as a cost instead of an investment?

SPEAKER_05 18:03

Well, I'll take this one. So, you know, outside of the last few years, uh, whenever equipment skyrocketed, usually equipment was a losing proposition. You know, you can look at it as an investment, but it's an investment. Is it truly an investment if it's something that goes down in value? Now, we had this period of time where certain equipment has actually gone up in value, but that's not the norm, you know, over history. But so if you're looking at it very objectively, now it's really cool to drive a nice new tractor, you know, be warm and and then cool in the summer, but you have to look at it objectively. So if you do that, it's you know, you're you need to look at that as an investment. Just like I was talking about the input, still that's an input. And I I've been fortunate to work, you know, with some larger grain producers, and and I will say I'll give them credit that they know their equipment is is it's not an investment. It's basically it's it's part of uh doing business. And they break it down by you know cost per acre of a c using a combine, a sprayer, and they break it down that way. That the price of it doesn't matter, but they know how long they're going to use it and what it takes to make that work for them. So it's not necessarily an investment, it's just a piece of their operation they've got to have. You know, they're not looking to accumulate that to grow their net worth, they're doing it to produce a crop to, you know, to uh ultimately have profitability.

SPEAKER_02 19:33

Right. So what you know when people decide that they need to get a tractor, what advice can you give them to help them make the decision if they should actually buy or if they should lease?

unknown 19:46

Yep.

SPEAKER_05 19:47

That's another good question. And it really depends on certain there's a lot of reasons why you would do one or the other. I've actually personally I've done both of these things in in the course of the last 25 years of farming. Uh, but it really just breaks down to what your intention is for the piece. You know, you need to start with the first question is do you need it? Yeah. Now that one's always a tough one because a lot of times it's a 50-50 shot of whether you really need it. But you know, there's a lot of advantages to owning it. You know, you're owning it for tax for tax reasons, you're gonna buy it. If you want to need an immediate write-off for a tax problem, you can, you know, buy it and depreciate it out over time or immediate in, you know, Section 179. But leasing, you know, it it if a young a young producer wanted to, you know, really look at their business from a cash flow perspective, you know, a lot of times leasing is is a better option because you don't you don't necessarily own the asset, but you basically are doing it over a lease, your cash flow requirement per year will be about half of owning it. And sometimes in a startup operation, cash flow is king. You know, so that's a good reason to do it. And other reasons is, you know, if you're buying really expensive equipment, sometimes just leasing it, it helps your balance sheet because when you lose the lease, you're not owning it, which means you're not carrying a large debt load against it. So also, you know, that helps you maintain balance sheet strength instead of you know having a big debt. So there's really just multiple reasons, and you really need to just sit down and and talk to yourself first about what is your objective here. You know, how much am I going to use it? Do I need it? And what's my ultimate purpose? Yeah. And, you know, and really know your numbers to see which decision fits your operation.

SPEAKER_02 21:36

That wraps up part one of this conversation on the traits of a successful farmer. We've covered what it really means to approach farming as a business, making disciplined decisions, managing cost, and viewing equipment through the right financial lens. In part two, we'll shift the focus to one of the most critical components of long term success in today's volatile egg economy working capital. We'll talk About why liquidity matters, how to build it, and how it can help farm operations stay resilient and positioned for opportunity. Be sure to join us for the next episode of Beyond Agriculture.

SPEAKER_00 22:12

This episode of Beyond Agriculture is brought to you by Central Kentucky Ag Credit. Thanks for listening to the podcast. Be sure to visit AgCreditonline.com slash Beyond Agriculture. Access the show notes and discover our fantastic bonus content. Also, don't forget to hit the subscribe button so you can join us next time for Beyond Agriculture.