That is the message delivered by Rick Anderson at the U. S. Apple Association annual convention recently. Growers with years of experience should not let their preconceived notions prohibit them from changing with the times, said Anderson. Growers can’t afford to concentrate on old issues, the speakers said. No grower can afford to have a crop-year to crop-year mentality, said Anderson. The industry has changed. Today, assets no longer have long lives, and labor is no longer cheap and controllable, he said. The industry has many pressures. Increased capital costs have made farming more expensive. Today, in some instances, cash flow defines the value of a business, he said. The life cycle of assets is shorter than expected, and technology reduces labor costs.

Changing relationships. The industry also faces a growing number of changing relationships. Anderson encouraged growers to look at their relationships with suppliers, peers, bankers, customers, and children and successors. “After you examine these relationships, you may find that you need to discard or alter some of them,” he said. Customers must be your focus. Peers must be your partners. If it makes sense, growers shouldn’t be afraid to turn things on their head - perhaps partnerships can be developed with foreign competitors. The speakers encouraged growers to examine their business relationships. Just because they always bought from so-and-so, doesn’t mean they should continue to do so, they said. Business owners need to be sure to get he best deal possible.

The farm is business. If they haven’t already done so, growers should be running their operation like a business. There should be a planning and implementation process that provides for budgets and forecasts to improve. The business needs to have long-term (three- to five-year) goals, he said. Those goals should have tactical and quantifiable objectives, said Anderson. Then, make decisions and allocate resources while being sure to monitor progress and hold the plan accountable. Part of doing better business today is getting more and better information, said Anderson. Growers should find a way to facilitate industry-aided cost-of-doing-business studies, and they were encouraged to pursue specialized markets, based on their research. Growers should pay close attention to varieties that they produce best, ensuring a quality product.

Developing closer relationships. Anderson encouraged growers to follow the example of other industries: pursue success through peer partnerships. “Don’t be afraid to share all but the most sensitive information with competitor-peers,” said Anderson. “Growers should know how they compare to their competitors.” Part of the benefit of cooperating with peers is that you can improve asset utilization, said Anderson. Few of the assets used to grow apples are used year round; is there a way to get more out of your asset investment? Anderson said that there are too many independent entities that duplicate assets. Joint purchases or rental agreements can benefit all parties involved.

Down the road. Looking down the road, speakers said that the obvious coming changes they see are in farming operations, varieties, customer-focused production, more information from retailers, and further consolidation of sales desks. In the future, the industry will be vertically integrated, with fewer people in the middle, said Anderson. Packing houses may not continue to be stand-alone profit centers, and global integration of supplies will continue.