Marketing has allure. It's sexy. When you go to a seminar and the choices are attending a session on marketing, crop insurance or financial analysis you can guess which room will have more farmers in attendance. It's marketing.
Although it's most popular, we need to remember that there are other tools available to us outside of marketing. These other tools can make marketing work to our advantage for less cost.
When farmers join us, we encourage them to begin with a financial analysis. This first tool enables a farmer to better understand where he is financially and project his long term breakeven for the upcoming growing season. It enables us as we partner with him to tailor-make recommendations for the operation.
The second step is buying crop insurance as a part of the total strategy. If we think specifically of this year, many farmers sold their '11 corn before the crop insurance guarantee price was set. The guarantee was $6.01. If you took an 80-85% policy, you are going to have somewhere between $4.80 and $5.10 for a floor with normal yields.
Most farmers sold corn below what the guarantee was because they did not envision how high this could go.
Those who partnered with experts that taught them the value of the pieces all working together still have a lot of their crop, and the floor is their insurance policy.
It is critical that we put these pieces together, leveraging the three. Crop insurance is a great put option both for yield and price.
You might ask, 'how do I tie these three together?' Begin by making sure you have the right policy, the right unit structure, the right coverage level and that it fits into your emotional and business goals.
The government has done a great job subsidizing and making crop insurance available. Again, you must leverage all three. The possibilities are endless when you do.
Powered by iNet Solutions Group ©2011 All Rights Reserved.