COMMON GROUND BLOG

Find trends and outlooks, education and more on financing rural America from Farm Credit Services of America.

More Content

Risky Environment Calls for Close Eye on Breakeven, Insurance and Marketing Plans

Earlier this year, we published results of a study done by economists at the University of Nebraska, who determined that crop insurance indemnity payments in our four-state area generated nearly $2.2 billion in off-farm economic impact and protected more than 20,000 off-farm jobs in the 2012 growing season.

Crop insurance remains the most important safety net for grain producers.  Clearly it’s also important to the economies of rural and urban communities where farmers spend their money.

Farmer watching over cropsHeading into 2014, corn and soybean prices have declined while input prices are flat, so margins will be tighter.  In the Midwest, weather is always uncertain – even this year, we had a wet spring that prevented farmers in some areas from planting, while others saw drought conditions nearly as severe as 2012.

All this means that we’re heading into a riskier environment in 2014.  As a result, it’s more important than ever for grain producers to understand their breakeven price so they can make smart decisions about the amount and type of crop insurance to purchase.  Top producers know their breakeven – it’s one thing that helps make them successful. 

Producers also need to have a strong understanding of crop insurance and a strong understanding of marketing, and ensure their marketing and insurance plans are working together to maintain profitability.

Farmers can learn more about the outlook for 2014 grain prices at our annual GrowingOn® meetings.  Thirty events are being held in 29 locations in December and January.  Steve Johnson, farm and ag business management specialist from the Iowa State University extension office, is helping producers understand supply changes and their potential impact on grain prices.  Steve is helping folks understand what’s within their control, and how to combine specific marketing strategies (like futures hedging, and buying puts and calls) with crop insurance and forward contracting to minimize risk and maximize profits. 

It’s not too late to register.  Check out the calendar of upcoming GrowingOn meetings.

COMMENTS

Load more comments
Your comment has been received and is being reviewed.
avatar

Comments are moderated and reviewed before they are posted on the site. View our terms of use.

YOU MIGHT BE
INTERESTED IN

Crop Insurance

Crop Insurance & Grain Marketing: Are You Taking Advantage?

Crop insurance and marketing goals can work together to provide the best financial return.

Jun 11, 2019 | Crop Insurance

Producers: Control What You Can Control

For those adversely impacted by weather, that means making the right financial decision for your operation during this late planting period. For all producers, it means keeping marketing top of mind to maximize profitability.

Jun 12, 2019 | Crop Insurance

Veteran Farmer and Rancher Crop Insurance Benefits Now Available

Here is what you need to know if you are a military veteran and farmer or rancher.

Ready to Talk?

Contact us if you have questions or need more information. Fill out the form, or connect with your local office using the Office Locator.

FCSAmerica serves farmers, ranchers, agribusinesses and rural residents in Iowa, Nebraska, South Dakota and Wyoming. For inquiries outside this geography, use the Farm Credit Association Locator  to contact your local office.