Young farm families have many expectations to manage as they work on farms as employees, raise small children, and juggle time for off-farm revenue. One of the best ways to have less stress about compensation from the farm is to figure out what you need for personal family living expenses. I can imagine you groaning as you read this. These tips also apply to the founders who need a clear understanding of their income stream needs as they step back without stepping away from the farm.
Talking about money doesn’t have to be stressful when you come prepared with the data or “reality check” of what you need. Arguments arise when what you think you need may be perceived by your employer (farm parents) as a want. So be clear about what you see as fair compensation.
Recently I was speaking to a group of dairy farmers and suggested a family of four needs about $84K a year for family living. Click here to check out “Iowa State’s Benchmarking Family Living Expenses in Agriculture” This extension tool has a great chart of how to look at your farm family living expenses.
On our farm, Wes and I typically use $75K annually which does not include charity or investments, and we don’t have a house mortgage. Everyone’s annual number is their number, but you need some data to figure out cash flow and expectations for family living.
- Get data. Review your last year’s bank and credit card statements to see what you spent for family living. FCC has a tool called the Cost-of-Living Calculator. Track what you are spending on family living using your bank records and save cash receipts. Find an easy way to keep track so you get good data! Find out what other young farmers are making for income in comparable scenarios. Use the free AgVisor Pro app on your phone to ask the many consultants and farmers on the app willing to share information.
- Use Dick Wittman’s compensation worksheets. Wittman’s tool can nail down the wages or salary, and the farm perks of beef, garden produce, boarding horses, housing, utilities, cell phone, internet, pick-up truck, gas, meals, etc. Many families forget all the items the farm is paying for. These expenses covered by the business can add up to $14K or more of benefit to you as a family.
- Think about your goals to have equity in the farm business. What debt are you willing to take on to gain ownership of equipment, livestock, or land? If your farm wages/salary is only enough money just to live, then you are likely not getting enough compensation to have disposable income for farm debt payments. Before computers and Excel spreadsheets, we kept track of debt payments in a yellow scribbler, and we celebrated paying off farm loans! What are your timelines for being an employee of the farm and then moving to be a partial owner?
- Talk about money with your spouse. When you share the goals of gaining growth opportunities in the farm business you are pulling in the same direction. When you fight about what the family needs versus the farm, you need to seek a deeper understanding of what you can wait for, and what needs to happen now to meet the family’s needs. What investments today will make money? Which debt is good debt? Does your family understand “save” or “wait”?
- Discuss what the word “sacrifice” means to your immediate family and to the larger farm team. Lance Woodbury talks about sacrifice as a gift, a. necessity, or a crutch. (Ask me for the pdf of “Double Edge Sword of Sacrifice” by Woodbury). Compensation may be kept low for young farmers as a crutch when the real issue is a lack of business financial performance or too many family members working in the business. In other cases, Woodbury says “ sacrifice is used as a way for parents to avoid hard choices about succession planning and the process of letting go.” I recall founders saying they wanted the next generation to suffer as they had! Yikes! Where is it written young farm families need to suffer economic hardship to appreciate the opportunity to farm?
- Block time for a farm team meeting to discuss what is working with your compensation levels, and what needs to change. Be clear about what level of wages or salary you need for your family’s well-being. If you need an HR specialist to help with employee contracts reach out to Lindsay Seafoot at firstname.lastname@example.org. She works with ag families from Wawanesa, Manitoba.
- Celebrate how you manage your income well. Share appreciation with your spouse and your farm team as to how you are grateful for what you can accomplish together with the resources provided.
- Talk with your spouse about concerns with overspending or mindfulness in what you truly need to succeed to accomplish your goals. Discuss what money means to you. Listen to the Moolala: Money Made Simple with Bruce Sellery Podcast. Sellery authored “Moolala, why smart people do dumb things with their money.”
- Work to have compensation matched to the roles and skills you are providing to the farm. Just because there are two siblings working as employees on the farm it does not mean their different skills, for example, farm labour vs. farm manager deserves the same income. This is a huge conflict I have witnessed when the farm owner is conflict-averse and not fair with compensation for different skill sets. This situation may need mediation and facilitation with a coach.
Every farm family, old and young needs enough financial resources to live well and grow the business. Reach out here and I will send you the compensation folder with Wittman’s compensation tools, Woodbury’s sacrifice pdf, and the Iowa State benchmarks for family living expenses.
Talking about money and understanding the money scripts you are living within your family will create more harmony! Being clear is kind!
How to be happy in your role on your farm with job task lists
I believe folks are happy in their roles on the farm when they are clear about what is expected of them, and they have the proper tools to get the job done. It is also important folks know what kind of work they want to do as they begin to step back without stepping away.
I’m sharing part of Dick Wittman’s tool which I use often with successors who are trying to become the main manager and let founders create new job descriptions. Feel free to ask for the entire tool here.
Last month I met Taylor Phillips of www.producersedge.ca. You need to check out his blog about using QR codes on the farm. He is a genius at creating more productivity with Google documents like seeding calibration sheets, drill calibration, tank optimizer, mix sheets for spraying, and how to help employees track parts needs.
Seek human resources help with Lyndsay Seafoot who “loves to untangle a mess” when she helps employers with compliance. She is in Wawanesa Manitoba and can also work on Zoom.
Find her at email@example.com.
As you long to have a smooth seeding process this spring ask yourself these questions and share the answers with your team.
- What primary strengths are you bringing to the farm?
- Where can you improve your performance? e.g., Tracking your hours, and checking machinery.
- Which areas can management help you do your job better? e.g., Learning QR codes, google documents.
- What’s your plan to improve your skills and abilities in the next 6 months?
- What key goals do you want to accomplish or what are your expectations for the 2023 crop year?
Job Duty Lists
The following lists represent specific job duties, areas of responsibility, and decision-making grouped by occupational specialties. This listing assists managers in defining what tasks or job functions to delegate or assign to individual job positions on the farm.
General Management Responsibilities
- Coordinate annual operating and strategic planning, consolidate cashflow planning efforts, and report periodically to the management team on cash flow and overall financial performance.
- Organize the workforce, assign responsibilities, and coordinate the efforts of personnel!
- Oversee hiring, training, and orientation of full and part-time help.
- Evaluate employees and coordinate personnel self-improvement strategies.
- Oversee compensation program and adjustments.
- Execute contracts.
- Manage estate plan implementation (wills preparation, stock sales, payments, etc.)
Negotiating & Administering Relationships
- Negotiate leases; serve as primary liaison with landlords; make annual distributions of landlord crop shares; and maintain records on lease advances and crop shares.
- Monitor federal farm program provisions and ensure compliance with annual cropping plans; file necessary crop plans, production reports and landlord distribution information with regulatory entities.
- Negotiate joint ventures and strategic alliances with other farms and businesses.
- Oversee rental houses; advertise vacancies, collect rents, and perform maintenance as needed.
Secretarial, Legal, and Support Functions
- Oversee office maintenance, supplies, and equipment servicing & replacement.
- Administer records retention and disposition program; dispose of records when holding periods are met.
- Maintain corporate minutes, by-laws, and resolutions.
Capital Purchases Analysis and Procurement
- Analyze the feasibility of capital investments and negotiate new purchases.
- Shop for capital purchase items based on specifications approved by an authorized body.
Crop Production Management
- Develop annual cropping plan including rotational strategy and variety selection.
- Prepare annual inputs for cashflow budget preparation concerning crop plan and major expense areas (i.e. chemicals, fertilizer, seed)
- Supervise procurement, storage, cleaning, and treatment of seeds.
- Coordinate seeding operations and maintain seeding records.
- Determine the timing and scope of farm equipment operations for major tillage, cultivation, and harvest operations.
- Operate farm machinery in all phases of crop production.
- Perform maintenance and overhaul responsibilities of farm machinery and crop-related structures.
- Monitor inventory of shop tools, supplies, gas, diesel, and equipment parts maintained on hand; and coordinate restocking as needed.
- Monitor crops for weed and insect problems; arrange for and/or apply chemicals for weed and insect control.
- Arrange for the collection of soil samples for the fertilizer program and arrange for fertilizer application consistent with the annual cropping plan.
- Maintain field records on all production inputs and applications.
- Oversee operations of custom seeding, spraying, fertilizing, trucking, and harvesting
- Coordinate field crew rock removal activities.
Grain Storage and Marketing
- Oversee delivery, dumping, weighing, and load-out operations for grain storage operations.
- Negotiate grain storage and shipping arrangements with market and storage outlets.
- Supervise elevator storage, maintenance, aeration, and fumigation activities.
- Monitor grain and livestock markets and market commodities.
- Develop and execute marketing plans.
- Track inventory levels and market crops.
Service Manager/Machinery Maintenance
- Train and oversee new and part-time employees on proper servicing procedures.
- Develop and maintain service guidelines for all major farm vehicles and motorized equipment.
- Perform general service, maintenance, and overhaul of farm machinery.
- Oversee maintenance and repair work subcontracted off the farm.
- Keep service records on equipment maintenance, overhaul, and servicing.
- Assist in identifying winter overhaul or maintenance agenda; keep maintenance needs list updated during the year.
- Provide direction and technical assistance to other employees performing overhaul duties.
- Assure that the farm shop is properly stocked to perform normal maintenance and repair activities.
- Monitor shop and equipment operating environment for safety and environmental regulations compliance; insure proper disposition of toxic and other waste products.
Bookkeeping and Financial Management
- Pay bills and perform banking responsibilities.
- Prepare monthly and annual farm financial reports; distribute them to appropriate audiences.
- Coordinate with the accountant for the preparation of individual and corporate tax returns.
- File periodic payroll, truck road mileage, and gas tax reports.
- Arrange loans for operating and capital purposes.
- Supervise pension plan investing, serve as plan trustee, and prepare required reports.
- Coordinate annual financial planning process.
- Prepare cashflow budget projections using input from responsibility center managers and report periodically to officers and managers on cashflow performance.
- Prepare interpretive managerial reports including ratio analysis, profit center analyses, etc.
Risk Management/Insurance Programs
- Manage insurance coverage levels (crop, casualty, disability, medical, and life)
- Keep records concerning claims history.
- Coordinate coverage levels on rolling stock for farm vehicles and personal vehicles insured under farm policies; ensure liability certificates are maintained in vehicles.
Conservation Practices and Drainage Systems Management
- Interact with conservation organizations for conservation programs
- Oversee farm compliance with environmental regulations
- Oversee the design and implementation of structures and practices to improve the environmental stewardship of the farm.
- Planned, develop, inspect, and maintain field drainage systems and sediment ponds.
What do you want your job description to be? If you want coaching to get clarity of expectations on who is the ultimate decision maker, contact our team for a discovery call. We can coach you while you enjoy auto steer on your fields this spring.
Elaine Froese is a former extension home economist. She cares about your family having a great quality of life on your farm. Click here to ask for a free discovery call today! She is now celebrating 28 years of writing this column! Her team of 7 coaches is here to give you harmony through understanding. Happy Seeding!
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