#channelseed

Today, profitability in agriculture seems less likely than a Trump presidency.

-Redacted 11/8/16-

Today, a profitable ag economy seems impossible in the immediate future and very unlikely in the near future.  

What should farmers do aside from reducing costs? (Article here in case you didn’t realize that reduced costs improve profitability.)

Here is the problem.  It’s going to be really hard to farm without fertilizer, seed, fuel, equipment, and land.  While it is important to carefully manage these expenses, there is only so much a producer can do.  Below are a couple of items to consider as you make seed and crop insurance purchases.

What are my recommendations as a seed dealer?

Consistency is king.  High risk, high reward hybrids may leave you with subpar yields and some free seed.  That’s not going to cut it.

Stick with what works.  While it is important to get new hybrids on your farm, most acres need to be planted to solid agronomic products with good yield potential.  

If it sounds too good to be true?  It probably is.  The seed that is $75/unit cheaper with limited trait packages is priced that way for a reason.  Ask questions about trait packages, view plot data, involve your agronomist.

What are my recommendations as a crop insurance agent?

Know your risk.  Different products and coverage levels carry different risk exposures.  Stress test your financial ratios against different products and yield scenarios to make sure your crop insurance products match your risk tolerance.

All crop insurance is not created equal.  While MPCI rates are identical, hail rates are not.  In 2015, we saw differences greater than $10 per $100 of coverage.  For a producer purchasing $300 of hail per acre on 2,000 acres, this is a $60,000 difference in premium for the same product!