I hope everyone had a great summer. It is hard to believe school has started and harvest will be following shortly. Recently, I was looking back at previous articles I’d written and saw this phrase: Control the things you can change and know when to change the things you can control.
This really hit home given the world we are currently living in. With all the headlines in the news, it’s not surprising that people are feeling more stress and anxiety in their lives now than in the past. Think about everything we are constantly hearing about - the Iran conflict and continued Middle East tension, Russia and China hacking and spying threats, AI growing faster than we can maybe control, along with what some feel is volatility in the stock markets and a National Debt creeping up to $40 trillion. The list goes on. Closer to home, some of the headlines causing excitement are the lack of rain in some areas, potential pollination issues, livestock death loss due to heat, lagging prices on the grain markets, aggressive land auctions, the uncertainty of a new farm bill, and what, if any, farm payments we might see in the near future.
With all these pressing headlines, how does one overcome the obstacles and challenges in front of us? Just like anything in life, we need to take a step back to realize some things are not worth worrying about because we can’t change them. Instead of spending time stressing over things that are out of our control, we should be spending time focusing on the things that we can control and change. The following are just a few segments of your operation that you can control and make changes to when necessary.
Marketing your grain and livestock: The marketing of your grain and livestock is one of the most common areas that you can control. In an article I wrote in 2017, I talked about not trying to “hit the home run” when it comes to marketing your grain and livestock. Back in my high school baseball days, our coach drilled into us that base hits win the game. Base hits turn into RBIs, which turn into runs scored. Home runs are great, but over time you can see a correlation between home run leaders and the most strikeouts.
Insurance Coverage Levels: Another area that we can control, and is often overlooked, is insurance coverage levels on our assets. As years go by, we sometimes forget to review policies to see if we have the right amount of coverage. Take the time to visit with your agent about your insurance coverage or other options that are available for your operation. This is also true of coverage for your buildings, dwellings, machinery, and equipment, as well as your crop and livestock operation. I cannot stress enough the importance of understanding what you have and the level of protection that fits your risk tolerance. This will allow you to address potential future losses that could otherwise hinder the overall sustainability of your operation.
Family Living and Off-Farm Income: Family living and additional off-farm income are also areas that are in your control. While everyone’s family living and off-farm income are different, successful producers have a good grasp of these categories. They understand that controlling this area and maintaining a proper balance between farm operation and personal living is imperative.
Equipment: Equipment within your operation is also an area that you have control of. There are so many variables and thought processes when it comes to equipment: Do I purchase and depreciate it off in the first year and make payments on it over the next five years? Do I lease and worry about the buyout when it comes due at the end of five years? Do I maintain what I have and gamble with repair bills? Do I limit my equipment line, minimize my debt exposure, and hire more custom farming done without any of the above worries? Profitability and time-efficiency are both important, but effectively managing this area can be a struggle for producers from time to time.
In the end, it doesn’t matter what the media is saying. What matters is the changes you can make and the level of control you have within your own operation. If you are questioning a change, or have an idea to improve your operation, feel free to stop by and visit with your local UBI lender. We are ready to assist you with your questions and concerns.
Thank you for your business relationships and thank you for choosing United Bank of Iowa as your financial partner. I wish each of you a safe and plentiful harvest.