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Get the train wreck of harvest 2019 back on track

Brian Wittal offers advice on planning for the next season after a hard harvest

To say 2019 was a trying year for farmers across North America is an understatement. Regardless of how your harvest ended up, in the bin or the field, it is time to get a plan in place for the coming spring.

If you were fortunate enough to finish harvest, you have less to worry about, come spring, but depending on the weather and how early spring arrives you are going to be pushed hard to get fields worked, fertilizer and chemicals applied and seeding done in a timely manner so you don’t end up being pushed into a late harvest.

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For those who still have crop out in the fields, it is going to be a very busy spring as you try to manage that crop to get the next crop seeded on time. An early spring is certainly preferred.

What are some things to consider before you put together your plan for the coming year?

First, determine the priority: to forge on and continue farming or to look at other alternatives. This will be driven by a brutally honest review of your financial situation, working with your accountant and banker to see if you can afford to continue farming the way you are or if you need to make changes. Changes could mean investing in better storage and handling systems so you can start harvest sooner and then aerate or dry your grain.

Second, review your risk management plan (crop, revenue, hail insurance). Is it giving you coverage to protect you from bad years like 2019? This review will involve you sitting down with your crop insurance rep and/or a risk management advisor to review what you have been doing, what is available to you and what you should be using to protect your business. This review will go a long way with your banker, when you show them what you are doing to manage your risk. This also helps reduce the bank’s risk, making them more willing to do business with you, even through tough years.

Study crop rotations carefully. Spend time with your input suppliers and/or agronomist to map out a plan for the spring that will give you maximum potential and crop choice flexibility. You will need a Plan A and a Plan B, in case spring comes late and forces you to plant shorter-season crops. Your plan should be optimistic and flexible, so if you run into delays during the spring, you can do so without greatly sacrificing yield potential.

The spring after a bad harvest is not the time to start cutting back on inputs. All that does is limit your potential for the upcoming year before you even get the crop in the ground.

2020 Marketing plan

Your marketing plan should focus on taking profitability when and where you can, to ensure that next year’s crop is going to pay for itself and you are not faced with another potentially profit-losing year.

This is where having a risk management strategy already in place becomes beneficial. As you map out your marketing plan as to how much of each crop you are willing to sell at certain times of the year and at what price, the decision as to when to pull the pricing trigger is easier to make when you know what kinds of pricing and production protection you have in place.

After a hard harvest like this past year cash flow is likely tight. Lines of credit may still be maxed out and cash advances taken. Your marketing focus will need to lean toward addressing those issues. Focus on pre-pricing grains for harvest delivery to improve cashflow, allowing you to meet your financial obligations and pay down debt as fast as possible, reducing your interest costs.

Focusing on getting your business back on track financially and making good decisions to get you past the effects of last year and back on track toward a better future.

From adversity comes learning. From learning comes knowledge. From knowledge comes wisdom. From wisdom comes opportunity. From opportunity comes success. Grow from the experience.

About the author

Columnist

Brian Wittal

Brian Wittal has 30 years of grain industry experience and currently offers market planning and marketing advice to farmers through his company Pro Com Marketing Ltd.

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