When I was first approached to make a talk on "How as a Producer Dealt With the Cost-Price Squeeze in 1982," I began to reflect upon the things we did in 1982 which allowed us to make a profit. Quit honestly the one factor which was most responsible for our making the amount: of profit we did last year was the weather. However, I would like to think that some of our long-range policies also contributed to our 1982 profits and, furthermore, I would like to think that because of various management practices, we are continually fortifying ourselves against the hazard of a continuing price-cost squeeze.

Since it is my desire to make "the tilling of the soil" my lifetime work, I have adopted a philosophy of farm management which states simply that assuming the most important single resource of farming is the land itself, then it is imperative to strive for some improvement in the land each year. Inherent in that philosophy is the recognition that it is the land from which all profits are bore.

It has been my experience that if our sole aim is to maximize profits in any one specific year, we are oftentimes disappointed. However, if our long-range commitment is to improvement of the farm, it seems that in many instances profits will be forthcoming.

How many times have you heard a farmer say, "I managed to show a profit last year"? Just as the theme of this conferences suggests, he probably did manage to show a profit. Management is indeed the key to profits in the 1980's.

As I see it. there are three distinct areas of management with which we must be concerned on a yearly basis. All three of these areas are interrelated and each of them is utilized in a manner in which the long-term goal of farm (or land) improvement is attained. These three areas of management are: (1) Production, (2) Marketing, (3) Capital.

Let us first take a look at production.