FORT WAYNE, Ind. — Producers shouldn’t wait until economic conditions force them to make adjustments before they consider changes in their operations, according Wells Fargo’s chief agricultural economist.

“Everybody has three or four things they know they should do better,” Mike Swanson said. “But some wait until it gets so painful that they have to change how they do things.”

Land purchases are one area in which farmers could improve, he said. For example, some producers might consider purchasing a piece of land for sentimental reasons or because they think it’s never going to come up for sale again.

“You have to fight against that,” Swanson said. “The land market is broken. It’s flawed because people are flawed. You need to find ground with good yields and lower prices.” He spoke Jan. 14 during an educational seminar on the last day of the Fort Wayne Farm Show.

Deciding whether to proceed with a land lease agreement when cash rents might be considered too high by the farmer is another big decision for producers, he said. “You’re sitting across from someone you’ve known for years and they won’t come down on cash rents. Your only options are ‘yes’ or ‘no,’ and ‘no’ has some complications.

“Why in the world would you say yes to a bad deal in hopes that in a few years, it will be a good deal? You can’t do stupid and be successful.”

Swanson sees the next three years as possibly rough ones for agriculture.

“It’s going to be a lot more difficult. There will be people who go out of this business, but it’ll be a more orderly exit than it was in the 1980s.”

To guard against losing the farm, producers have been examining their operations, trying to figure out how to respond to lower commodity prices, said William M. Kessinger, regional sales agronomist with Stine Seed.

“They’re looking at input costs and what’s making them the most money and what’s making them the least money,” he explained. “It’s been a reality adjustment. Before, you did things for convenience, and now we’re doing this for profitability. They’re keeping an eye on what they’re doing and why they’re doing it.”

Producers seem to have different philosophies about how best to proceed with managing inputs, he said. “We are seeing some farmers circle the wagons and go back to the tried and true. But others say they’ve been with the company all these years, and it looks like we’re creating something different that will work for their farms. When farming was good and money was coming in, they didn’t have to be that efficient. Now we’re telling them to look at the efficiency factor.”

Producers realize things have changed, said Bruce Everhart, vice president and ag banking manager for Wells Fargo. “No matter where we go or who we talk to, we’re in uncertain times. Things are different now than they were a few years ago. It was easier to make money,” he explained.

Marketing is often touted as one way farmers may gain an edge, but Swanson cautioned that alone won’t solve the problem. “You can’t out-market the market,” he said.

“You’re outside the loop and you have a built-in bias. You’re not an expert just because you grow it or because you want (prices) to go up, and only up.”

U.S. farmers, who are producing more corn than can be consumed in this country, have been hurt by a strengthening dollar the last couple of years, Swanson noted.

“We have to take advantage of foreign markets, but (the stronger dollar) has made a big difference in our ability to export products. We have to deal with this in agriculture because we’re an export-oriented part of the economy. We need that global market. It’s a big driver for us.”