If when you think of risk in farming you think only of uncontrollable things, like the weather and global trade, or only crop price slides, you’ve likely missed an opportunity to take a more proactive approach to risk management.
While it’s easy to get overwhelmed by ‘what if’ scenarios and all the different forms of risk, in this episode of Mind Your Farm Business, Kristjan Hebert, of Hebert Grain Ventures, keeps the plan for risk management tangible and achievable.
Instead of worrying about swings in crop price dollars and cents, sit down and determine — realistically — how much money your farm can actually afford to lose in a year and keep farming. From there, he says, you can start to build a real-world risk management approach that includes things you’re likely already doing, such as hedging or insuring.
Some sectors in agriculture — such as feedlots or hog enterprises — are all too familiar with this type of risk management, and there’s much the crop and livestock industries can learn from them, Hebert says.
That discussion, plus points on being to risk averse, why cutting production can be a double-whammy of risk, and more, here: