Agriculture has never been a business for those with the faint of heart. It demands capital intensity, long investment cycles, and the ability to navigate unpredictable weather and volatile markets – so many things that are out of a producer’s control.

Increasingly, the most successful agricultural enterprises intentionally balance two distinct but equally critical roles: “Builders” and “Guardians.”

In the world of agriculture, the Builder mindset is essential to adapt to changing conditions. Costs rise, technology evolves, economies of scale shift, and global competition intensifies. Operations that fail to build — operationally, technologically or strategically — tend to fall behind.

Yet, the Builder’s strength can also be a vulnerability. Growth initiatives are fueled by optimism. Capital expenditures and expansion rely on forward assumptions. Expansion compresses liquidity before it generates returns. If not properly managed, aggressive building can expose operations to leverage strain, working capital stress, or margin compression — especially during downward cycles.

The Guardian, meanwhile, protects balance sheets, liquidity, risk and long-term viability. On farms, Guardians focus on working capital, hedging strategies, insurance coverage, machinery replacement cycles and more. In agribusinesses, they oversee risk management, governance, compliance and internal controls. In agricultural lending, Guardians ensure underwriting rigor, portfolio stress testing and concentration management.

These two perspectives, while seemingly in opposition to each other, often work well together to ensure success by combining bold action with disciplined thinking. The current agricultural environment magnifies the importance of this interaction between leadership and management.

Offense vs. Defense

Livestock and protein sectors generally continue to do well, while grain producers face compressed returns from lower commodity prices and elevated and sticky input costs. In these conditions, Builder instincts may push for scale expansion or technology investments to lower unit costs, while Guardian discipline ensures those investments remain sustainable under stressed margins.

This concept is also applicable to farm real estate, where values remain historically high in many regions, driven by strong demand and limited supply. With these conditions, Builders see strategic acquisition opportunities. Guardians test whether cash rents or operating margins justify purchase prices, or whether leasing offers better risk-adjusted returns.

In both of these examples, Guardians are not necessarily pessimists. They are risk wardens — ensuring the business survives volatility so that growth opportunities can be pursued repeatedly across cycles.

You don’t win by playing offense alone, and you don’t often stay in the game without defense. Builders keep their feet on the gas, while Guardians have control over the brakes. The most successful companies aren’t always the ones without brakes – they’re the ones with the best brakes.

Agriculture often requires growth, but growth amplifies risk. Great agricultural businesses empower Builders to pursue opportunity – and Guardians ensure the business is still standing when the next cycle arrives.

Farmers, ranchers and producers that can effectively embrace and balance these principles and values enable their operation to continue to grow and prosper, while maintaining a focus on the long-term legacy of their farm or ranch.

Quick Hitter Ag Updates:

• Ethanol production is reaching a record high, which, along with strong export sales, is good for corn demand. Monthly soybean crush levels continue to set records. However, prices at the farm level stay below the cost of production for most commodities.
• Simply put, we’re still losing the global export trade war and currently, with record crops, don’t have enough domestic demand to offset these inadequate exports, especially with soybeans. Trade policy disruptions have reduced market certainty.
• We’re no longer consistently positioned on the world stage as a low-cost producer.
• Year-round E15 would significantly help domestic corn demand. It’s hard to understand why this is so difficult to get passed by Congress.
• Congress recently passed the $12 billion Farmer Bridge Assistance (FBA) program, with payments expected to be paid out to producers at the end of February. Agricultural leaders in Congress have been pushing for an additional $15 billion aid package. Stay tuned.
• While every producer’s break-even numbers are different, the USDA’s 2026 preliminary cost of production estimates show that farmers would need corn prices of $5.03 a bushel and soybeans at $12.80 a bushel just to break even. Current prices remain well below those levels.
• Grain operations are caught in a profitability squeeze. As one economist put it, grain prices tend to take the stairway up and elevator down. Input costs, on the other hand, take the elevator up and stairway down.
• Open and new markets, not government checks, are the answers many producers are looking for.
• Brazil recently surpassed the U.S. as the world’s top beef producer due to a shrinking U.S. cattle herd and a growing Brazilian herd. Brazil reportedly has about 240 million head of cattle, compared to about 90 million in the U.S. Brazil is already the world’s largest beef exporter.
• Interestingly, Brazil is becoming more efficient in its beef industry. The average age of slaughtered cattle has gone from an amazing 5 years old to 3 years old and is expected to be reduced to 24 months soon. In the U.S., it’s currently less than 24 months old.
• Slaughtered cattle in the U.S. are getting heavier due to the high price of beef, good genetics and the reasonable cost of feed. The modern steer carcass is about 130 pounds heavier than the 2005 version.
• Another reason for high beef prices? Normally, the U.S. imports around a million head of Mexican cattle. However, due to a screwworm outbreak in Mexico, those cattle are no longer in southern U.S. feedlots or processing plants.
• With the additional revenue that dairies are receiving from beef cross calves (now more than 10% of U.S.-fed cattle slaughter) and cull cows, it’s estimated to be adding $4/cwt to $5/cwt to their milk for a dairy operation.
• In tough financial times, it’s more important than ever to have a good and open relationship with your banker. The worst thing you can do when things get challenging is to go dark on your banker.
• I would also argue that when things get challenging, it’s more important than ever to have measurable goals and plans – along with a commitment to monitoring and executing.

This article appeared in the Q1 2026 issue of our AgViews newsletter.