ORIGINALLY WRITTEN BRADLEY GOERING
With the rain we received last week, folks were concerned about the condition of the wheat. Even with the heavy amount of rain-we received more than five inches at Hesston-not much of the crop went down. I think we will still have the quality at this point in time. The discouraging news is that wheat prices are still way down, even though we have seen progress to the upside recently.
After doing a little digging, there is a logical reason for this modest upside swing. With all of the bad news we hear from western Kansas, eastern Colorado, etc., with drought conditions, a farmer would think the price would rebound.
This just hasn’t been the case. The United States produces a mere 8 percent of the world’s wheat supply today. Farmers in the United States don’t make near the impact they did a few years ago, according to statistics. We are truly in a global marketplace.
During these tough times in agriculture, farmers face tough decisions to better manage the risks they take each day. Short-term risks and long-term risks need to be strongly considered when planning for the future.
I am usually optimistic about the outcome of well-planned strategies, but there are usually exceptions to every rule.
As a farm manager, the best decisions may come from considering the likelihood of an unfavorable event and how you can reduce the impact of that adverse event. Ask yourself the question, “What can I do about it?”
List each risk factor and what will happen if the possible undesirable event does occur. We saw some feedlots do this, for example, several months ago to counteract the possibilities of agri-bioterrorist attacks which could occur.
Second, decide how you might respond to maintain profits and maintain or improve cash flow. This will ensure that family-living and scheduled payments are met, and will provide peace of mind if the possible hazards actually happen.
It appears to me we are in such unfamiliar territory in agriculture today. Change is coming fast and furious, and we need to be more innovative in our tactics to stay in business.
We have a new set of challenges to face in the mix. Now, more than ever, a well-devised plan needs to be in place to address these factors.
Bradley Goering can be reached by e-mail at bgoering@thecsb.com, or by telephone at 620-327-4941.
