To Survive The Bust Cycle, Farmers Go Back To Business-School Basics

After several boom years while the rest of the economy struggled, farming is entering its third year on the bust side of the cycle. Major crop prices are low, while expenses like seed, fertilizer and land remain high. And that means farmers have to get creative to succeed.

Modern crop farms in the Corn Belt are sophisticated businesses. So put aside your notions of bucolic red barns surrounded by a few cows. And pull out your best business school vocabulary, because crops are commodities.

"Every individual acre is a unique production facility," says David Muth. He runs AgSolver, one of many data-driven startups promising to make farms more efficient. Muth compares each acre of a farm to a single store in a chain of coffee shops. Some locations are profitable, others not so much. "The question we like to ask is, would we be satisfied if any one of those individual production facilities is operating at a loss?"

Probably not, he says. So what do you do with the coffee shops that are losing money? Any MBA will tell you, you've got to do two things: Reduce expenses and stop wasting money.

More