AUBURN, Ala.— Producers make farm diversification an important part of their farm business plans because diversification helps spread the risks that come from production agriculture.
Diversification helps to increase the producer’s profits and reduce their risks.
What is Diversification?
Ken Kelley, a regional farm and agribusiness management agent with the Alabama Cooperative Extension System said that diversification is “the attempt to capture market gains and reduce risk by having multiple enterprise opportunities as part of my business plan.”
Farm diversity is important because it spreads the risk of crop failures and market fluctuations over multiple enterprises said Kelley.
Ben Ingram row crop producer in Lee County, Ala, said that raising one crop is not a good idea because it puts the producer at the mercy of that one particular.
Ingram began diversifying his operation when the peanut quota program dissolved. This allowed him to expand his cotton production to peanuts.
Mitch Lazenby, producer in Auburn, Ala., currently has an extensive row crop program, a cow-calf operation, a bull development program and hosts different agritourism events.
Lazenby makes farm diversifity a priority.
He said that diversification helps him to stay ahead of the curve and be relevant in agriculture.
Lazenby said that most producers have a primary enterprise, such as row crops. Diversifying is smart because it will supplement the income generated from the primary enterprise.
If the row crop production brings in 75 percent of the producer’s annual income, adding agritourism should add an additional 25 percent.