Having better harvest weather the last 30 days was an absolute blessing. We now have the winter weather that we could have experienced in November.
The fact that markets made a counter seasonal rally was a tremendous gift to grain producers. Market volatility continues and the opportunities and pitfalls remain for us to manage. We have reached a time in production agriculture that we must work toward risk management solutions 365 days a year.
Why is it important to think about risk management 365 days a year? The investments are greater and the stakes are higher.
A volatile market, combined with a global economic downturn, has created a greater need for long-term risk management planning. The margin for error is smaller than ever. Producers need to think about a crop insurance and marketing plan that takes into account the intricate and interrelated dynamics of agriculture — and more specifically their operation.
It is time to challenge the conventional thinking. Look how technology has changed the way producers apply their inputs, market their crops and manage their livestock. Now it’s time to reconsider how and when producers plan their entire year.
As we finish our harvesting and clean up equipment, we must not let up and fall back on our laurels. It is time to finish up our year’s records and recap our financial progress. Complete candor, with ourselves and business partners, is vital for us to make unbiased plans for the coming year.
We must evaluate where our strengths and weakness lie and plan to address them as we move forward into the new year. We will make great progress if we can focus on our strengths and seek support for the areas that we are weakest. This type of honesty is hard at times, but the humility that it brings is valuable in moving toward fulfilling our hopes, dreams and goals.
Around our house the preparations for the holiday season are in full gear. I have been told that I can be rather a “grump” when it comes to this type of activity. I admit it, I do like the Thanksgiving season more than the commercial crush of the Christmas holidays. I fear that we can get caught up in the need to stretch our household budgets beyond reason and the stress this causes hinders our ability to remember what is most important in our lives.
I know that I am rather “old school” when it comes to these types of things in my life. I remember sitting around the kitchen table in the farm house with Grandpa making peanut brittle on cold winter nights before Christmas. We would sit there with bowls of unshelled peanuts making a mess and he would be stirring up the brittle on the stove. He would tell me about what it was like when he first started farming with mules in the hills of Missouri.
As the brittle was spread and cooled with a light sprinkle of salt, I could taste the simple pleasures of being home for Christmas. Take a moment this year to remember “the reason for the season.”
Grain Angles is written by Tom Neher, AgStar Financial Services vice president of agribusiness and grain specialist from Rochester, Minn.
