Tips to overcome the farm economy downturn

Maximizing profits in an economic downturn. That was the focus of a presentation at Grain Expo during Canadian Western Agribition.

Dean Klippenstein, a senior advisor with MNP, said most grain prices are down significantly as compared to recent years however, there hasn’t been a corresponding drop in input costs.

When margins tighten many producers tend to reduce crop inputs. Klippenstein said producers should be careful not to cut inputs where it will limit their crop potential:

“None of us are smart enough to predict the future, but we know we’re in a commodity business and things fluctuate so, all we can do is what’s in our power and what’s in our power is to do what our friends in the agronomy business tell us to do to set the stage for a great potential crop with Mother Nature and the markets throwing the cherry on top to make tremendous results,” he said.

Klippenstein told the growers in attendance that the average farm makes serious money 8 to 12 years on in a 40-year career, but we don’t know which of those years is going to be that 8 to 12.

“We better make darn sure that we’re top tier executors so that when the stars all align and everything works, we take advantage of it,” he said.

The other advice Klippenstein gave was around the importance of producers utilizing and understanding the various insurance products that can protect their bottom line in a downturn. Programs like Crop Insurance, AgriStability, Global Ag Risk Solutions and other private insurance products.

“When people have that understanding of their coverage, it really lets them shoot the lights out. We have neighbors who were cautious, and we have neighbors who did a great job,” he added.

Klippenstein said it’s easy to ‘move the needle’ $100.00 an acre.

“You know as well as I do that $100 an acre cash profit difference doesn’t have to be done over very many years to make a significant difference in long-term viability and where that family’s capital is at.”