Too many farmers operate their business based on what resources they wish they had available and not what resources are actually available. We have to farm based on the resources that we have available. The second fundamental question that has to be answered is what are the goals for the farm business. Since most of our farms are still family-owned businesses, it is imperative that the business goals and family goals are considered. The goals can be financial, personal, family, business, or one of many other categories.
Economists often use the goal of profit maximization to simplify their analysis.
However, most of the decisions made on farms today are not made to maximize profits. They are made with profits in mind, but not at the maximum level. Other goals enter into the decisions. When deciding how to manage our resources in a rapidly changing world, we must ask ourselves what we want and why we are farming. The answers to these questions are important for determining which way we want to go and how we should manage our businesses.