Peer power: Farmers get out of neighborhoods to find advice
MORRIS, Minn. — A Minnesota company is helping larger farmers get out of their neighborhoods to find peers for sharing management techniques.
Tim Schaefer is the founder of Encore Consultants, LLC. He works in three areas with farmers — transition planning between generations, helping farms professionalize so they can grow, organizing peer groups in the U.S. and Canada. Schaefer says peer groups allow farms who are already successful become more successful, and says that in difficult times, the interest is growing.Business principals
Schaefer grew up on a farm at Hancock, Minn., and in 1996 earned an economics/finance degree at South Dakota State University. For 12 years he managed financial and estate planning department in a Morris, Minn., bank and its branches. In May 2014, he organized the limited liability company and in 2015 started his first peer groups under that business.
Two current groups range from six to nine members. A third is being formed.
Most of the farms have a half-dozen employees but some go up to 80 year-round, full-time employees. (The largest is in Canada and has dairy, beef and row crops.)
Schaefer matches the groups. He vets them through an interview, trying to figure out how they might match up, somewhat on size, complexity and current business practices.
Farmers can join a year at a time but often return year-after-year. They meet twice a year, rotating among the farms. Encore recommends that two executives from a farm come to each meeting.
Encore charges $6,900 per year for a farm, regardless of size.
Very few of the peer group members are one-on-one clients in a separate financial consulting business.Trouble-shooting
Farm visits often take place in January, February or March, as well as June, July or August. “In order for the process to work, you have to get face-to-face,” Schaefer says. “There’s something about looking other people in the eye that builds the process.
The peer group “host” sets a meeting agenda. It typically includes a farm tour, and discussions around a conference table, either at a hotel or on the farm. Meetings run for two and a quarter days.
Typically, the host identifies “something they’re stuck on that they want everyone to come in to help trouble-shoot,” Schaefer says. It is rarely about any farm production or agronomic issue, in part because they are geographically different and in part because they are already master producers.
Encore helps coordinate the meetings and logistics. Schaefer describes it as “case study” in which the members meet with key farm employees, spouses and other family members. “They get to see themselves through a different lens,” he says.
A typical issue might mean taking something off of the plate of the owner-manager — delegating it to someone else within the organization, or finding someone to delegate to. Executive time is a “big constraint on many farms that are in a growth mode,” Schaefer says.Labor, communication
“Labor is a big challenge — how do we find good people, what do we do when we get them here to the farm,” he says.
“Communication is another one. When we were small, communication was easy: we just did it ad hoc. Now, we have a team of five, six, 15 or 25 people. How do we keep all the information in the right hands so people can keep working?”
Transition planning — bringing in family members or other business partners to scale things up — is another typical discussion. Some need to scale down.
David Glinz, 72, a large farmer in the Jamestown, N.D., area, is part of a nine-member peer group. The group came to his farm in July 2017.
“They’re some great guys that I trust totally,” Glinz says.
At Glinz’s request, the group met with his loan officer with AgCountry Farm Credit Service, and his accountant. “They said, ‘You’ve got to change your ways, basically,” Glinz says. “It was a wakeup call.”
Glinz says the peers told him to shrink this down and consolidate, especially in a low- and negative-margin environment. “Regroup and create that opportunity for the next generation,” he says. He cut his farm to 12,000 acres — still a large farm — and cut his corn acres based on peer group advice.
Schaefer says the power of the peer group is that it includes solutions that come from the experiences of everyone in the room, Schaefer says. “And six months later we get to hear how the advice was taken. ‘Did you work on the recommendations or didn’t you? How successful were you?’”
He says that while the focus at each meeting is on the host, other members are also learning things about their own farms. “The lightbulb will go off,” he says.
For information go to the website: https://encore-consultants.net/executive-farmer-network/ or call 320-287-0186.