TFM Perspective 3-20-20



The last couple of months have been rough, as low commodity prices and now a financial meltdown have many in agriculture feeling like they just can’t catch a break. Yet, there is an internal resiliency, almost unique to those in farming, that keeps them moving forward with anticipation of better times ahead. This drive sees beyond the moment as a keen awareness to find positives, and helps many cope and even succeed. Farmers are a class of people who, perhaps more than any other, seem to carry this trait of positive outlook and willingness to make changes as necessary to get through difficult times. Producers of ag goods are used to price volatility and changing weather, livestock health, breakdowns, well….you get the point. You can’t control virus outbreaks, trade wars and weather just to name a few. Yet, there is almost always a silver lining when adversity strikes; it is just a matter of finding it and taking control.

It’s never easy to deal with uncertainties. Many will come out of this most recent crisis with more knowledge and awareness of just how fast things can change, and that they can take certain actions to mitigate effects or take advantage of opportunities. Preparation for black swan events should always be part of the “what if” scenarios when considering price outlook. The author is reminded of killing frosts in the early 1970s, the trade embargo of the 1980s, 9-11, banks collapsing in 2008, droughts in 1988 and 2012, and massive flood events sprinkled within all of this. While rare, when unusual events do occur, price movement is often violent. Preparation is the key. We prepare for these events in everyday life with things like car or homeowners insurance. In farming, it goes beyond insurance and preparing using an array of marketing tools available to you.

Things you might control in the weeks ahead include lower energy costs, lower interest rates, or perhaps starting an investment or retirement fund. Crude oil futures have dropped by over $30 per barrel, reflecting their lowest price since 2002. Interest rates have recently retreated and are considered the lowest ever. The opportunities for purchasing equities in an investment vehicle are the best in over three years. Corn producers can take advantage of strong basis levels, something that could disappear if futures prices rebound. Feed buyers currently have low prices in an environment that has little or no price premium for weather factored in for the upcoming crops. These are but a few of perhaps many opportunities that exist. Connect with those around you who have the resources and brains to help you succeed. Don’t get caught wallowing in the pity-me crowd. They usually accomplish little and complain the most. Take time to move beyond the emotion. And then, take well thought out, strategic action to navigate these uncharted waters. There has to be a silver lining…find it.

If you have questions or comments, contact Top Farmer at 1-800-TOP-FARMER extension 129. Ask for Bryan Doherty.

Futures trading is not for everyone. The risk of loss in trading is substantial. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not necessarily indicative of future results.


Carol Tillmann

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