Getting Ahead of the Game
Anticipating the next technology, regulation, weather event, or economic downturn is the norm in agriculture.
During the eighth annual Women in Agribusiness Summit, industry experts shared actionable insights to help anticipate the implementation of traceability in food and ag and the potential for future economic recessions.
- Bryan Hitchcock, executive director of the Institute of Food Technologists' (IFT) Global Food Traceability Center
- Natalya Rivkin, VP of agribusiness banking group with CoBank
- Juanita Schwartzkopf, sr. managing director, Focus Management
- Glenda Gehl, sr. director, member relations, Land O’Lakes
- Katie Schear, VP of special assets group, US Bank
On Food Traceability
You’ve likely already heard about traceability and the technologies used to enable it in the food system, but their development is rapidly changing, regulations are getting established, and your farm management practices may be affected before you know it.
What is traceability?
Traceability is the systematic ability to trace the path of food ingredients and/or finished products throughout their entire lifecycle, using previously captured and stored records.
The benefits include mitigating and managing risk around food safety recalls, gaining consumer trust through transparency, reducing food loss and waste, enabling sustainability, and more.
Bryan Hitchcock gives the example of DNA footprinting on individual seafood and livestock, which allows us to trace the animal through its entire life cycle. He says, “The advancements in the whole genome sequencing to be able to quickly and rapidly identify sources of contamination has created a very interesting challenge for the industry.”
With his team at IFT’s Global Food Traceability Center, he interacts with global regulatory agencies to educate and advise on potential regulations. “The observation we have is if we’re not out there proactively managing the conversation as an industry, others are going to fill that gap. And you may not like what that gap is.”
What can you do?
“We recommend that folks really start thinking about what’s important to them. What message do they want to deliver to their upstream or downstream partners, because in the end, those partners may put some requirements on them they’ll have to react to,” says Hitchcock.
Work with your co-op, partners, friends and family to map out where your inputs come from, where your products go, and become clear on how they interact with each other. Before collecting data or piloting traceability technology with solution providers, creating that process map and knowing your competitive advantage will set you up for success. When future regulations and customer requirements do come into play, this will ensure that you’re not lagging behind.
Preparing for Recession
When you hear the word “recession,” you may think the entire economy will experience it. But according to Juanita Schwartzkopf, there are recessionary pockets in various industries every year due to the ups and downs of business cycles.
However, there are many strategies that can help prepare your operation for those downturns.
Think strategically about your management team.
Your management partners should be able to challenge you and help you move forward. They should have skills that complement your own and contribute skills or experiences you may not have. Your management team should help you look at the local and global markets.
Always be aware of how much cash you have and how many months of operating expenses you could cover. Then, build up your savings. Review where your expenses are, see if you can stretch your accounts payable and receivable to increase your working capital. It’s important to manage the growth you want to create and to ensure that you have cash to support it.
Adopt a software program.
Many software programs can be used to measure profitability on the farm. They can also be customized to analyze different options that mean the most to your operation, like crop year vs. calendar year. If you’re not using a program now, target January 1 as a goal date to adopt a system and just get started. Realize it’s never going to be perfect, but the awareness and insights will bring you value.
Have a conversation with your bank.
If you foresee any financial issues and an impending down-cycle, have a conversation with your bank. Katie Schear comments, “One question everybody wants to know at the bank is, ‘Do we have confidence in management?’ It doesn’t matter what the math looks like if you’re not confident in management. If you’re a company or producer coming to us saying, ‘These are my challenges and this is what I’m doing,’ that speaks volumes about our partnership. In a recession, the human factor still matters.”