Marketing Risks

Continuing our Risk Management discussion, I want to comment on Marketing Risks. Marketing is the part of farming operations that transforms productions activities into financial success. Often unexpected circumstances, like weather or government action, can impact major changes in crop and livestock prices. With agriculture becoming an ever growing global market, these changes can come from world factors – other farmers’ weather and other countries’ governments can affect your prices.

Marketing plans and strategies should be developed with your operation in mind. Keep these items in mind as you develop your plan:

Know the level of risk you are comfortable with. Marketing is not an exact science, so you must understand your level of risk tolerance and have a strong understanding of your current financial position.

Be willing to learn; you may need help developing your marketing plan. Find a reputable futures broker, elevator operator, financial planner or farm consultant.

Develop an integrated management approach to your business. Farm business decisions should be made taking every aspect of the operation into account: production, financial, legal and human resources. Marketing decisions often involve contract agreements that can significantly affect financial plans.

To manage your marketing risk you need a marketing plan. The goals and objectives of your operation should drive the marketing plan. Understand production costs, know your break-even price, develop targets for your plan by analyzing supply and demand projections, be aware of prices received in your area in previous years and know your cash flow requirements – including family living needs.

It is important to remember that the numbers and plan that works for your neighbor may not be the most appropriate plan for you. Know your goals and know your needs. And be ready!

Things to be Thankful For...

As the Thanksgiving holiday approaches, it's hard not to reflect on the many things we have to be thankful for. Our economy, though not fully recovered, is showing signs of life and moving slowly in a positive direction.

Although unemployment is still high and shelters and charity organizations are busier than ever - Americans have responded by giving even more generously than during recent prosperous times, giving of their time, talents and money.

We have had rain, thankfully not too much, so crops have prospered. And in South Carolina we have experienced no hurricanes this year.

For these reasons and so many more I am proud to be a citizen of this great Country; thankful to be a resident of this beautiful State; and blessed to be a part of ArborOne Farm Credit - your trusted partner for rural financing and a member of the Farm Credit System, a system created to provide credit for farmers, ranchers and rural America.

Happy Thanksgiving!

ArborOne "boot camp"

We have three new hires that have literally been going through ArborOne "boot camp". I use the term boot camp because these guys are learning about ArborOne and what Farm Credit means in the most hands on ways imaginable.

During their first six months on the job, they have received overviews and training in each department and followed loan applications from beginning to end. An important part of working at ArborOne is understanding our customers. We wanted Ashley, Bradley and Ryan to experience different aspects of agriculture – to be hands on.

That said they recently spent three days working with a turkey farm. On the first day they prepared the clean house for the poults. Day two involved putting the chicks into the house. Not quite as simple as it sounds on paper. On their third day, they helped clean up after the first night of the poults being in and participated in the day to day activities of the turkey farm when birds are in.

This boot camp continues to be a great learning experience for our new employees. By being on site and seeing, as well as participating, in the work necessary, they are gaining an appreciation and greater understanding of the many sectors of agriculture. But the most important thing they gained was the customer’s perspective.

The "System"

On the ArborOne website, and in most of our press releases, we state that ArborOne is "a proud member of the Farm Credit System". But what does that mean?

First, a little history... The Farm Credit System was created in 1916 by Congress and provides more than one third of the credit needed by those who live and work in rural America. As ArborOne, we operate as a cooperative and are an independent financial institution with our own capital and board of directors.

ArborOne, along with 21 other associations, are the owners of AgFirst Farm Credit Bank, our funding bank. As owners of AgFirst Farm Credit Bank, we utilize the same accounting and systems technology as other associations in our district. This gives us access to top of the line technology and systems that we might not otherwise be able to afford.

A benefit to our member-owners is that as a System, we are able to tap financial markets world-wide through our funding agent, the Federal Farm Credit Bank Funding Corporation. It is their responsibility to provide money for all system associations nationwide.

As a System, all associations share the same goal, to be the provider of credit for rural America. We work together through our trade organization the Farm Credit Council in lobbying and other national messaging efforts. The Council provides a positive voice for Farm Credit associations and other constituents.

We are regulated by the Farm Credit Administration and as a System we pay for this regulation.

Farm Credit Council Services provides a broad range of services for our association, including various insurance, training and development opportunities that would be much more costly if we had to foot the bill ourselves.

The Farm Credit System is working together to provide a unified look. This includes web presence and overall system branding. Stay tuned for the rollout of the new Farm Credit System website in July.

Next time… What is the bio star and what does it represent?