It seems like this has been the year of weather destruction. We've been enduring the heavy rainfall of early spring, severe flooding, and the extremes of heat and drought. Now it’s the time of year for weather volatility in the Midwest which includes severe storms with wind and hail. We all know our crops are at risk during the growing season from severe weather. It's relatively easy to assume that storms will hit someone else rather than our own operations. If we do get hit, even if we think we’re prepared, it's a major shock to our system. The shock affects us mentally, physically, emotionally, and financially. So what do we do? I've always liked the saying; prepare for the worst and hope for the best. This idea holds true as we consider our margin contingency and risk management plans.
When the unexpected happens, what type of response plans do we have in place? As I’ve discussed in earlier blogs; do we have adequate insurance coverage, the appropriate marketing plan, and a contingency cash flow plan for a short crop?
Unfortunately, there are some of us who have recently been hit by a weather disaster. Those of us who are currently experiencing challenges need to stay focused on things that we can control rather than the weather itself. It's important for us to avoid drastic decisions when emotions are high. Always consider the supplier partnerships that you have developed and lean on the experts. Their assistance is valuable when faced with weather challenges. Be sure to have conversations with your seed supplier, local retailers, and other experts who can help you understand your agronomic issues. Also, be sure to have conversations with your grain merchandisers and marketing advisors to discuss any changes or adjustments in your marketing plan. A discussion with your lender is another key contact for support and expertise to help you work through a possible financial challenge. The more experts you surround yourself with, the better opportunity you will have in getting positive results from any disaster.
Usually when something bad happens there are opportunities to learn. Weather challenges are no exception. For example, in 2007 we faced straight-line winds which basically leveled much of our crop. That year we took the opportunity to do studies on fungicide applications, insect management, harvest techniques, and numerous other side-by-side comparisons to determine best management practices when faced with down corn. We also worked closely with grain merchandisers to adjust delivery dates of grain. Another interesting process we discovered was a unique harvest technique which allowed us to harvest corn at an angle with virtually no grain loss at a relatively normal speed. Luckily we learned some management techniques in 2007 because unfortunately we were hit again with straight-line winds in excess of 70 mph at 6 a.m. on Monday, July 11.
Here are some pictures of our wind damaged fields.
While this is a frustrating situation, we have learned a number of things from the past and have great supplier relationships to help us endure this challenge.
Based on our experiences with weather challenges, we've put together this list of support systems to help us develop the best response plan for crop disasters. Every operation is unique and may have different needs; therefore, you may need additional support systems. If so, please forward me your thoughts and I would be happy to pass them along to others. When we're faced with challenges, it's important to help each other!
Weather destruction plan - support checklist
1. Crop insurance agent
2. Seed company - sales rep or agronomist
3. Fertilizer and herbicide supplier (local retailer)
5. Financial Consultant
6. Marketing Consultant
7. Grain buyer
8. Other farmers experiencing the same challenges
We were lucky in our area. Our crops were hit but the buildings were spared. There are many operations not far from our location which had significant building damages. Thankfully, there were no deaths or injuries. Buildings and crops can be replaced over time but people can never be replaced.
If you are lucky enough not to have been hit by a weather disaster this season, maybe now would be a good time to put together a contingency plan? Like the saying goes; prepare for the worst and hope for the best!