Farmers advised to think like entrepreneurs

February 04, 1994|By Amy L. Miller | Amy L. Miller,Sun Staff Writer

Farmers must think like businessmen, closely examining costs and paying their employees well, if they expect to survive in the future, a Pennsylvania farmer told a group of Carroll business and agricultural leaders yesterday.

"Many of our farm operations are trying to survive by doing things like their daddy did," said Richard Waybright, owner of Mason-Dixon Farms in Gettysburg and an Adams County commissioner, at the Agribusiness Breakfast.

"That's not going to cut it in the years ahead," he said.

Of the four factors affecting profitability -- weather, how much money is put into the product, how much money is received from selling the product and efficiency -- the farmer can only influence his own efficiency, Mr. Waybright said.

The agricultural community must become more efficient and have a quicker return on its investment to compete in the world market, he said.

"We have to wake up to the fact that there is a world market," Mr. Waybright said.

"Traditionally, agriculture has allowed five years to gross on its investment. But industry uses a different yardstick, grossing its investment in a year and a half. To compete on the world market, we must soon march to that drumbeat," he said.

Mr. Waybright said his sons have computed the costs associated with every field on his dairy farm, he said. The results showed that 25 percent of what they were doing lost money, 50 percent made a little money and 25 percent made a lot of money.

"With that, you're a little more than breaking even," he said.

"The things that are making you a lot of money are erased by things you shouldn't have been doing in the first place," he added.

Good labor relations also are important as fewer people continue working in agriculture, he said.

Rather than trying to hire the cheapest employees available, farmers should restructure their operations and pay top dollar to attract the best workers in the community, he said. Farmers should also consider dividing their work day into shifts and training employees to excel at specific duties.

"You don't have to be good at everything," said Mr. Waybright, quoting a piece of advice he heard that impressed him. "Just know what you don't know and hire someone who does."

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