Investment Grade Farm Marketing Decisions

This is Tim Hammerich of the Ag Information Network with your Farm of the Future Report.

In agriculture, you’ve probably heard the term “farming is a gamble.” Co-founder of Agricultural Economic Insights, David Widmar believes there’s some element of truth to that, but farmers can change that narrative by taking more of an investment-grade approach.

Widmar… “Farmers can put grain in the same bin at the same time or put grain in the bin on the same day and they could take it out on the same day. So they're going to have the same outcome. Some of them are going to have investment-grade decisions, and some of them are going to have gambling-grade decisions. And the idea, I think that's important is, if you continue to do that, that investment grade decisions year in and year out, that's going to create huge, huge values for you.”

What that looks like, Widmar says, is taking advantage of risk management tools.

Widmar… “How do we turn that decision that we're facing? How do we increase, how do we upgrade, you know, the insights that we're bringing into it and how do we make sure it's more valuable? So part of it's, you know, connecting your crop insurance plans and your marketing plans and your cashflow projections, how can we tie all that together? So it's not a gamble that I made the right crop insurance decision or that I picked the right government program between ARC and PLC or that I, you know, have enough cash flow to get me through a harvest. How do we pull all that together so that our decisions, you know, are leading us to the outcomes that we want to have?”

Widmar says it’s a good example of how a change in mindset can make all the difference.