New Year, New Challenges, New Opportunities
DR. ANDREW P. GRIFFITH
KNOXVILLE, TENNESSEE
At the beginning of every year, a large number of people who roam this earth make a New Year resolution. Most of the time that resolution is to improve oneself physically, mentally, or spiritually. Resolutions are fine in and of themselves, but why does a person have to wait until January 1st of a year to attempt a positive change to his or her life? Are all the other days of the year for making negative changes and January 1st is set aside special for positive change? It is clear this is a rhetorical question, but we as a people also think a new year brings new challenges and new opportunities.
On occasion, a new year does bring on new challenges and new opportunities, but most of the time those challenges and opportunities have been cutting a trail for a much longer period of time. For instance, producers are going to face challenges with input prices in 2022 as feed, fuel, fertilizer, and chemical prices have all increased over the past six months. Similarly, the opportunity to experience higher cattle prices in 2022 did not just appear on January 1, 2022.
Rather, the market has been rounding into form the past several months. Thus, what new challenges or opportunities are coming with the new year? And, can some of those new challenges actually be opportunities?
Higher input prices will be a challenge in 2022. It is certainly not a new challenge, but it has been several years since producers have been faced with higher input prices across the board. This challenge will encourage producers to look for alternative production methods to reduce reliance on feed, fuel, fertilizer, and chemicals. It is generally this type of challenge that results in innovative thinking that can result in a change to an operation that will last a lifetime as a producer finds a more efficient method to achieve a certain production and profit goal. In this manner, the challenge then offers new opportunities as producers learn how to navigate around traditional production practices.
Moving through the new year, some operations will face “new to them” challenges that other operations have faced previously. For example, an owner/operator/manager of an operation may die unexpectedly. Such a departure by a person carrying many of the primary duties on an operation will certainly lead to challenges, but it will also lead to a new opportunity for someone else or even multiple people as they are forced to fill the void left by the unexpected death. Not only is it an opportunity for those individuals, but the operation may benefit from the new ideas or new directions presented by the change in leadership. I would say I apologize for the morbid idea. However, I do not apologize for introducing the thought as it could happen to any operation at any time. It is better to have discussed this scenario with family members and those involved in the farming operation than to be caught unprepared.
There will also truly be new challenges and opportunities in the coming year that cannot be predicted. For instance, no one predicted the discovery of BSE in December of 2003, Coronavirus’s market impact in 2020 and beyond, or any number of drought situations. Similarly, no one predicted record cattle prices reaching the levels they did in 2014 and 2015 or even the finished cattle market moving as high as it did in the fourth quarter of 2021. There are sure to be some challenges and opportunities that no one can directly prepare for, but the more flexible one is in an operation, the more likely the situation can be managed with a positive outcome.
In addition to new challenges and opportunities that come in time, producers are encouraged to seek new opportunities that may help them address some of the new and unique challenges they may soon experience. One of the primary challenges each person faces is overcoming his or her own way of thinking. For instance, if someone said “they had found the fountain of youth” then most people would just write them off as crazy because it does not exist while others would go looking for a fountain spewing youthful water. Who said it was water? Who said it was a fountain of youth for the physical body?
Maybe it has to do with a spiritual new year resolution instead! ∆
DR. ANDREW P. GRIFFITH: Assistant Professor, Department of Agricultural and Resource Economics, University of Tennessee