Showing posts from tagged with: farming risk

How to Protect Farms from Frigid Winter Weather

Posted November 15, 2018 by Administrator

Last winter saw record low temperatures across the Midwest. In Embarrass, Minnesota, the temperature sank to -45°F while the rest of the Midwest experienced temperatures more than 25°F lower than the usual average. While there are obvious dangers to cold temperatures, particularly exposure, there are several implications for agribusinesses.

How Cold Weather Affect Fields and Livestock

Winter wheat is at increased risk when temperatures plummet below normal. Limited snowfall can compound the problem since the snow insulates crops against the frigid temperatures. The news is not all bad, however. A deep freeze can penetrate the soil well below the usual depths. This helps the soil retain more of the nitrogen farmers apply in the fall. When the soil begins to thaw, it may be softer as well. Lastly, extreme cold can eradicate more insects, reducing their effect on crops the following spring.

Livestock can also take a hit so farmers need to take care to ensure water remains thawed and feed is available. During cold months, animals eat more than usual to account for the calories burned trying to keep themselves warm. Farmers will need to consider this when purchasing feed. Livestock will also need shelter against freezing winds and winter storms. Cattle and sheep are content to live outdoors all year round, but they still require refuge from extreme winter weather. Farmers need to ensure any animal shelter can withstand the weight of snow and ice.

Taking Care of Farmers

Many farmers focus their attention on their fields or their livestock and forget to ensure their own comfort during the winter months as well. Farmers need several pieces of attire to ensure they can function comfortably while tending to their farm in freezing temperatures. Some winter gear farmers should consider keeping on hand includes:

  • Hand and feet warmers
  • Gloves
  • Hat
  • Warm boots
  • Boot dryer
  • Wool socks
  • Insulated overalls
  • Winter coat

While many of these things may seem obvious, many farmers overlook the simple things while tending to their agribusiness. Keeping warm and dry is vital to properly tending to fields and livestock. Being cold or uncomfortable can cause farmers to rush and miss signs of problems in their operation. Farming has its risk, but this doesn’t mean farmers should take unnecessary ones. To learn more about managing farming risk, contact the experts at Cline Wood.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

5 Crops That Perform Well in the Fall

Posted October 23, 2018 by Administrator

As temperatures start to drop lower, many farmers stop their planting efforts. This is unsurprising since many crops don’t fare well in cold weather. Freezing temperatures, frost, and snow cripple most crops, but not all of them. Root vegetables perform well despite the change in season; farmers can also take this time to jump-start their spring planting efforts. While fall planting isn’t for every farmer, the following crops offer farmers a prolonged planting season:

  1. It’s easy for farmers to obtain onion bulblets in the fall. Before temperatures drop to below freezing, farmers can reap fresh scallions. Once winter hits full force, the onions will remain dormant until temperatures increase. The crops will pop up in the spring, giving farmers a head start on the season.
  2. As a member of the same plant family as the onion, leeks perform well in the fall and winter. They perform best when planted in the early fall.
  3. Strawberries. Most farmers that cultivate strawberries purchase them for spring planting. However, farmers can increase their productivity by getting started in the fall. Most farmers pinch off the blossoms during the initial season to allow the plant to better develop its roots. By doing this in the fall, farmers can harvest the fruit at the start of the main season.
  4. Radishes. These plants grow much faster than most. Within four weeks of planting, farmers can begin harvesting. Because they thrive in cooler temperatures, farmers can plant and harvest them multiple times during the fall and winter. It also helps that cold weather enhances their flavor.
  5. Greens. Lettuce, kale, and spinach are great fall crops as cooler temperatures make the leaves taste sweeter. Like onions, farmers don’t need to fear planting them too late to harvest. They’ll sprout back up once temperatures begin to rise after winter.

Even though the above crops are excellent for fall planting, farmers do need to take steps to protect them from extreme winter temperatures. This means sprinkling a loose layer of straw over them to protect them from frost heaving. To learn more about how to protect fall crops, contact the experts at Cline Wood.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Assessing Risk in the Farming Industry

Posted October 9, 2018 by Administrator

Running a successful farm takes hard work and careful risk management. Farms face several unique risks that don’t affect other industries. However, assessing those risks follows the same process. While the degree of acceptable risk and the approach to handle it will differ from person to person, the framework for identifying risks remains unchanged.

Develop a Risk Heat Chart

A heat chart provides a simple visual tool to identify if a risk is significant enough and likely enough to address. The chart below is a simple illustration comparing the potential effect of a risk on the left and the likelihood of the risk occurring on the bottom. The darker the color, the more damage the risk can cause to the business.

To make a usable risk heat chart, farmers need to perform the following:

  1. Pinpoint things that can go wrong. This includes external and internal risks. This step is critical because many farmers overlook risks they think are unlikely, which can come back to haunt them later. Some external risks include fluctuating markets, law and regulations governing farming, and weather events. Internal risks can be a loss of employees due to failing health or quitting, damage to assets such as a barn fire, personal debt, and more.
  2. Estimate the potential effect. Once farmers identify risks that can affect their farm, they need to determine how much it can hurt their operation. Farmers will want to seek input from employees to gain a balanced view of the risks. Using the above heat chart, farmers can assign five categories ranging from negligible to severe for the potential effect the risk can exert on the farm.
  3. Estimate how likely the risk is. Similar to the above step, farmers need to look at their risks and determine how likely they are to happen. From there, they can assign them to one of five categories ranging from remote to probable.

Once farmers know their risks and decide how much they can affect the business and how likely they are to occur, they can plug them into the various slots on the heat chart. For example, if a farmer estimates that a drought it possible this year (category 3 risk) and the potential effect is severe (category 5), this creates a risk score of 15—one of the hottest risks on the heat chart. This tells the farmer he or she needs to develop a risk management strategy to protect their farming operation. All farms have risks they need to address, but they don’t need to do it alone. The experts at Cline Wood can help you identify all risks that could affect your farm as well as implement strategies to mitigate them. Contact us to learn more.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

How to Convince the Next Generation to Invest in Farming

Posted February 12, 2018 by Administrator

Farming is hard work and often a risky venture. It also demands much of the farmer’s time, leaving a perception of a workaholic who garners few rewards. It is also not a glamorous job and does not appeal to the masses. With the deck stacked against them, it is a wonder farmers succeed at all. Limited interest has led many farmers to turn to the next generation, their children, to take on the family business. Unfortunately, growing up on the farm has not inspired second generations to pick up where their parents left off.

Selling the Next Generation on Farming

Second generation farmers represent an important stepping-stone between the ruthless first steps of building a farm and its potential golden years of prosperity. Second generation farmers do not have to contend with crippling farm debt, loans to pay for machines, and so on. Nevertheless, the next generation balks at the lifestyle change. Even if the assets are stable, the shift to living on a farm is significant. Their fear of failure is also paramount.

However, future farmers have a significant advantage over their parents. Back in the 1960s and 70s, there was a massive back-to-the-land movement. For one of the only times in recent history, rural growth outpaced urban growth. However, these would-be farmers were entering unknown territory blind. They had no scientific data and next to no communication options. Next generation farmers have all the benefits of an established farming operation plus a wealth of information. The explosion of information across the web has made farming success easier than ever.

Creating Succession Where None Exists

Not all farmers have obvious heirs to their enterprise. When this is the case, many wait until it is too late to establish a line of succession. If a farmer does not have a clear line of succession, that individual needs to start planning sooner rather than later. Waiting to establish an heir until retirement means extended working years and a higher chance of failure.

To do this, most farmers look to their existing workers. Many farms have shining stars amongst the plethora of employees. Once farmers begin the conversation of transference, they can draft an agreement on how to shift their chosen heir from employee to owner. Most farmers start by giving 10% ownership to their employee and sign over a small percentage each successive year.

The process is slow for a reason. All relationships take work, and grooming an heir is no exception. It is less of a complete takeover and more of a partnership. For several years, if not decades, the transference process will look more like business partners working side by side than an owner retiring. This process is difficult, but Cline Wood can help. If you are struggling with retirement or farming succession planning, contact us today.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

Revisiting Your Crop Insurance: The Time Is Now

Posted November 9, 2017 by Administrator

With winter fast approaching, farmers are hurrying to finish their winter preparations. While making repairs and preparing equipment for the winter months are important, farmers should also take a moment to review their crop insurance policy. While most policies renew annually, it is worth digging into the details. Farmers may be able to secure better rates and discounts. They may also be subjecting themselves to unnecessary risk. Situations change on farms on a regular basis. What once was sufficient coverage may leave gaps going forward.

Production Numbers and Claims

Part of any successful farming venture is tracking and reporting crop production. By providing this information to a crop insurance expert, farmers can get a better idea of the coverage possibilities available to them. An insurance specialist can also identify potential claims. Even if a farmer did not suffer significant yield losses, it is always worth a look.

Existing Coverage

The current agricultural economy is putting farmers through the paces. While they are surviving the poor economy, their finances are suffering. Investing in higher coverage can help alleviate some of this financial risk. While this is not a long-term solution (increased coverage means increased insurance costs), it can provide a temporary respite until the farmer has fiscal flexibility again.

Discuss Your Options With an Insurance Expert

Changes in farming operations, inconsistent crop yields, and estimated future costs all warrant a visit with a crop insurance expert. Farmers can discuss any concerns they have and learn new ways to address their risk. As the leading provider of agribusiness insurance, Cline Wood can help farmers choose the best crop insurance to meet their needs. Contact us today to learn more.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

National Farm Safety and Health Week to Focus on Implementing Safety Practices

Posted September 13, 2017 by Administrator

Farming has always been a hazardous job with many risks not seen in other industries. Because of this, President Franklin D. Roosevelt signed a proclamation in 1944 to bring more attention to the plight of the everyday farmer. The goal of this proclamation was to reduce farming injuries as their steadily increasing numbers were hindering the war effort. That proclamation is now known as National Farm Safety Week. This year, National Farm Safety Week runs from September 17 through September 23.

In spite of this increased focus, agribusinesses represent one of the most dangerous industries in the country. For example, over 400 farmers and farmhands died from work-related accidents in 2015. While these numbers are grim, the farming industry is experiencing improvements in safety and decreases in injuries. To continue this trend, the National Farm and Safety Week theme is focusing on implementing safety best practices. Below is a summary of events for the week:

  • September 18: Tractor safety
  • September 19: Farmer health and wellbeing
  • September 20: Health and safety of children
  • September 21: Confined spaces
  • September 22: Rural thoroughfare safety

Below are some highlights of each segment to help farmers improve safety and reduce risks.

Tractor Safety

  • Tractors and transportation accidents are the most common cause of death on farms. Tractors rolling over represent a significant amount of these incidents. As such, farmers should make use of roll over protective structures (ROPS).
  • Relating to farm transportation, farmers should implement safety practices to reduce run over incidents and PTO entanglements as well.
  • Farmers should also avoid risky shortcuts. The potential time saved is not worth the risk. Maintain vehicles and fix mechanical issues to reduce the temptation to make use of a dangerous bypass.

Farmer Health

Many farmers experience health issues later in life. Some are hard of hearing while others may require oxygen. However, farmers can avoid many of these health concerns by wearing personal protective equipment (PPE). This includes:

  • Respirators
  • Eye protection
  • Hearing Protection

Farmers should also look after their mental wellbeing in addition to their physical health. Isolation is a leading factor in depression so farmers should take their mental health seriously.

Health and Safety of Children

Each year, around 110 children and teenagers die from farming incidents. Causes range from machinery incidents to ATVs to drowning and more. This particular day will focus on creating areas that are safe for children to play as well as educating farmers on how to make farms safer for kids.

Confined Spaces

Farmers encounter hazardous gas and entrapment dangers when entering manure or grain pits. This particular day will focus on how to store and access grain as well as how to enter manure pits safely.

Rural Thoroughfare Safety

When farm vehicles and passenger vehicles collide, there are grievances on both sides. Instead of focusing on who is at fault, this day will concentrate on ways farmers and passengers alike can reduce the risk of an accident.

Cline Wood is dedicated to improving farm safety. As the leading provider of agribusiness insurance, we can help farmers identify and reduce risks. To learn more, contact us.

This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.

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