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Jim Meade / Iowa City
Senior Advisor

Does Your Farm Have Unique Resources?

There is a study out of Purdue that says to prosper your farm has to sell something better at a higher price or sell the same as everyone else but produce it cheaper.

 

Duh!  

 

The study says most farms try to produce more efficiently and to do that you use benchmarks to measure success and you identify resources that you apply to the process.  Benchmarks are availabe to everyone so the thing you can really do anything about is identify and marshal resources to your advantage.

 

http://farmdocdaily.illinois.edu/2016/06/identification-of-unique-resources.html

 

"...identifying and utilizing unique resources that are difficult for other farms to obtain is critical to sustaining a farm's competitive advantage."

 

The study says resources must be valuable, rare, costly to imitate, exploitable, have competitive implications and have good economic performance.  After I read all that I'm not sure I understand it.

 

I have some farmland in Iowa so I'll say it is valuable, rare (relative to the world), costly to imitate (they ain't makin' no more farmland), and exploitable, that is, I can grow corn on it.  So far, that makes me look good at one level, but if comparing to other farmers the view changes.

 

My farmland is not as good as other cornbelt ground.  It is rare and costly to imitate and exploitable but it doesn't have the competitive implications.  It has good but not top economic perfornance.

 

When all is said and done, I don't see how this kind of study help me survive in a competitive, commodity based economic system.  If this guy could find me a new planter at half price I might be more enthused.

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6 Replies
rawhide
Advisor

Re: Does Your Farm Have Unique Resources?

Those Purdue guys make me want to throw up sometimes with their wit.Smiley Happy

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BA Deere
Honored Advisor

Re: Does Your Farm Have Unique Resources?

I think for example a smaller farmer might have unique resources in that doing his own spraying and waiting until conditions are the best, so saving on application cost and buying the most reasonably priced chemicals rather than be held captive by the coop.  Also, perhaps experiment with cutting application rates

 

http://so-ilservice.com/landoil.html 

 

I think doing alot of ideas that Practical Farmers of Iowa do can give a farm an edge.

 

http://practicalfarmers.org/ 

 

Maybe it`s the fact a person owns all the land they farm and or have no debt, that can also be a resource.   If an opperation can`t identify a niche they have, they`ll be religated to being a volume producer, just flat out run the maximum acres and make a penny or whatever profit on each bushel.

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k-289
Senior Advisor

Re: Does Your Farm Have Unique Resources?

Jim  -  I am looking at radio station  KRVN  ag news and it produced an article of a  ''''  10 ''''  Milion  $$$$ '''  tax break to stay in Wichita Kansas along with along with  '''46 Million ''' $$$ worth of CITY   INDUSTRIAL  BONDS  +   6 MILLION  $$$  of  equipment bonds in return for a  ''15 year commitment ''' - - -

 

Unique Resources  of this mellenium age --- 

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Jim Meade / Iowa City
Senior Advisor

Re: Does Your Farm Have Unique Resources?

You guys are great and I'm too cynical.  Yay for unique resources.

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k-289
Senior Advisor

Re: Does Your Farm Have Unique Resources?

Jim  -  come on now - you can attend the next economic developement meeting and brush upon these 21 century tech stuff ---

 

The article you mentioned being part of the  ''' interesting  times - mind set ''' of 2o16 -   thanks for the read which puts things on display ---   

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Kay/NC
Honored Advisor

Re: Does Your Farm Have Unique Resources?

Jim, I think this is both an inside- and outside-the-box kind of question. We used to consider things like crop v timber and soils types and slopes, water availability, etc., more than what we have on the table today, as potential resources. The little swath of our NC county (NC has super tax treatment for solar resource development) that lies in Dominion Resources territory ( which is a VA corporate utility), allows a return a lot quicker than the same solar farm an inch over the state line. That's just one example...and it requires proximity to the substation, or enough of an epicenter to draw a new substation into construction, which is happening here, to Wheel up more power to the grid. Wind and sun, an eventually water - although they will try to steal that from you - are all currency. Mineral rights and stuff like fracking are so disruptive, you really need to move and forget the surface, I honestly feel. Another example of a regulatory-derived resource is the permits we have to raise hogs, in a state that isn't allowing any more. I have called this "de facto quota". Actual quota systems like we had for flue-cured tobacco and Virginia peanuts were similar resources. USDA bought them both out, and left most of the land marginal for many crops, those being our two cash crops regionally. We cannot compete with your corn and soybean productivity. I can think of other resources...the main one that comes to mind is location, near enough to big city and $$$ centers, where you can pull off value-added marketing without travel costing too much. That males for niche and agritourism opportunities. If you can stand dealing with the public. My most abstract one is the assimilative capacity of your watershed. This is really what a lot of land grabs are about...if we use up some of a river shed's ability to absorb nutrient and sediments, et al, we prevent more bedrooms from being built on some municipal wastewater system. They simply want to treat waster as cheaply as possible, to get permitted. It is all a numbers game, and ag is not very well enfranchised as it tries to play, or as Norm famously said on "Cheers!":It's a dog-eat-dog world, and I'm wearing Milkbone underwear...."
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