Page 32 - MWC 10-6-2022s

Top 5 Risks on Your Operation: Are You Prepared? The Midwest Cattleman · October 6, 2022 · P32

By Paige Carlson
How well prepared is your products, as well as an acci- keeping, as well as
operation to manage risk? dent that may have occurred taxes, bills, and debt—
For ag operations, often- on your operation. In severe Is your operation
times successful risk manage- cases, this risk factor will be actually profitable?
ment can make the difference best managed alongside a law- Knowing where your
between an operation that yer who is familiar with agri- operation stands fi-
runs like a well-oiled machine culture, trustworthy and has nancially through the
versus one that seems to con- your operation’s best interest use of cash-flow state-
stantly be swimming just to in mind. ments and balance
stay above water. Human—such as employ- sheets can be helpful. current marketing plan pro-
“Depending on how your ee satisfaction, including fam- Production—utilizing re- viding the best return? Are
operation runs and where you ily members—Though often sources to create a sellable there value-added programs
leverage your pain points, then overlooked, this risk is an im- return—Looking at your op- that could increase profit with-
we can help you put together a portant piece of the puzzle. Is eration, ensure assets are out increasing labor, time, and
risk management plan to make the environment of the opera- being managed properly and resources? Forward contract-
sure that you're not going to tion safe, mentally sound, and are performing adequately. ing harvested grain, contract-
have big effects from your risk healthy for all involved? Are What is the operation’s aver- ing feed prices at profitable
areas,” says Ross Bronson, an family members working on age mortality rate of livestock? levels and hedging can be ways
ag risk consultant with Redd the operation treated fairly Are your current bushels per to manage risks in a commodi-
Summit Advisors. compared to other employees? acre comparable to a 10-year ty-based market.
Additionally, well-managed As Bob Larson, DVM, says, average? What changes could Which of these areas does
risks could make the differ- “If you actually go back and see be made to increase profit on your operation do well? Where
ence in an operation surviving why family farms and ranches the operation? Take time to can your operation improve?
into the next generation. don't survive another genera- analyze your production prac- Find a trusted advisor to
Here’s a look at the top five tion, a lot of times it was the tices to ensure your operation help you make changes to your
risks found in ag operations: human side—family relation- returns the most per acre or operation, if needed, to better
Legal—such as liability, ship fractures and problems asset. manage risk and ensure suc-
contractual obligations—This with your landlord and things Marketing—strategic cess in the generations to come.
includes typical operation- like that.” planning in covering risk of
al tasks, such as delivery of Financial—such as record marketable products—Is your Drovers

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