Across the Editor's Desk: August 2008
I was working in my farm shop one afternoon in June when a thunderstorm erupted with little warning. I shouldn't have been surprised. Rain seemed like a scheduled daily event in Iowa this past spring and early summer.
A steel roof can magnify the intensity of even a gentle rain shower. But suddenly it sounded like boulders were pounding the shop.
A look through the doorway confirmed the boulders were really pea- and marble-size hail bouncing everywhere in the yard. I immediately imagined the worse for the corn and soybean fields.
My mother used to say at appropriate times, "That which is feared most seldom comes to pass." I should have listened better.
The storm was over quickly. The grass looked more white than green. But a fast walk through the fields revealed none of the shredded plants that my mind had imagined only minutes earlier.
A crop hail adjuster from my insurance company came the following week. He found some damage to the soybeans, mostly in a streak on the far north end of the field. It amounted to about a four-percent loss. The corn was not harmed enough to impact yield.
Under my father's care for 50 years, in only one year did he sustain a yield loss from hail. It happened when I was a boy. For some reason I never forgot the numbers: 22% loss on the soybeans and three-percent loss on the corn.
I have written before in this column that the hardest check I write every year is the premium for crop hail. That's because payment is due in October after the hail season is over and harvest is beginning. This year, I'll write the check with a little more gratitude.
"Risk management is riskier," reads the headline you'll see on page 18. Three farm business experts explain why more of your management time needs to be devoted to understanding the options and implications of crop peril and revenue insurance as well as other risk-management tools.
High crop prices and input costs put many more dollars at risk than just two crops ago. You are walking a high wire and better know all about the safety net below.
One paragraph in the story really hits home as it quotes Terry Kastens, Kansas State University Extension agricultural economist:
Kastens advises against forward contracting large amounts of grain. "Prices are swinging wildly," he says. "Add to that any increased weather risk, and it makes forward contracting large amounts of grain potentially financially disastrous."
What if I lose the whole crop? How will I fulfill my cash forward contracts at prices even higher? Those were two of the scary thoughts that pelted my mind while hail was pounding the shop roof.
While almost every piece of machinery on your farm is jumping in value, your pickup's market value is melting away. High-priced gas and diesel are making more than a few farmers change behavior.
In a recent discussion thread on Agriculture Online, farmers shared fuel-saving thoughts. Here's one example.