Factors Impacting Long-Run Planning

By Michael Langemeier and Anil Balchhaudi

Farmers wear a multitude of management hats which can make it difficult to resolve short-run issues or problems, and make long-run strategic plans.  In the parlance of farm management textbooks, you want your farm to do things right (related to tactical or day-to-day management) as well as to do the right things (related to strategic management).  A strategic plan provides a roadmap of where your business may be heading in the next five to ten years, and is particularly important for farms that have one or more family members transitioning into the operation and/or one or more family members that are transitioning out of the operation.  Without a strategic plan, transitioning into or out of a business can cause hiccups to the success of the business as well as complicate retirement plans.

Both short-run and long-run planning are important to farms.  Some farm goals, such as profit maximization, may be short-term in nature.  Other farm goals, such as conservation, and asset and management transitions are more long-term in nature.  A recent survey of 400 U.S. producers was conducted in late February 2025 to assess individual farm goals, producer sentiment, farm growth, succession plans, sustainability and risk preferences, resilience, and adoption of conservation practices.  Farm goals included the following: stable income, conservation, profit maximization, farm transfer, and debt reduction.  A previous article focused on farm goals and their tradeoffs (Langemeier, 2025).  This article focuses on short-run and long-run planning.

Long-Run Planning and Farm Goals

Each survey respondent was asked on a scale from 1 to 5, where 1 is “always prioritize short-term goals” and 5 is “always prioritize long-run sustainability goals”, whether they prioritized short-term financial gains over long-term sustainability goals.  Figure 1 presents the survey results.  Approximately 15% of the respondents focused on short-term financial gains while 57% of the respondents focused on long-term sustainability goals.  Prioritization varied by farm goal.  For example, approximately 75% of the respondents that chose conservation as their most important goal prioritized long-run planning.  Likewise, approximately 63% (64%) of the respondents that chose farm transfer (reduction in farm debt) as their most important goal prioritized long-run planning.  In contrast, only 37% of the respondents that chose profit maximization as their most important goal prioritized long-run planning.