Choice Bank hosted a short seminar on Wednesday, February 5 to assist producers in getting ready for the 2020 growing season and beyond. The seminar included three speakers that had one simple message for those who attended - start planning your future now and become educated on what the options are available.
“Agriculture is changing so much; it’s going to be such a different game in the next decade that this is just going to be more and more instrumental in being successful,” Choice Bank President Todd Borchardt said.
Planning a future in farming means knowing the deadlines for programs such as the ARC, PLC, WHIP+ offered by United States Department of Ag Farm Service Agency. Julie Howatt, the executive director for the Cavalier County FSA office, reminded producers that the deadline for submitting their information for the 2019 year is March 15.
“We need you guys to get in and sign up for 2019,” Howatt said.
Howatt explained the different uses and reasons for using the different elections. There are some changes that have taken place for 2019, and she cautioned producers who have yet to make their way to the FSA office in Cavalier County that if they do not get in soon, they may miss the deadline and be forced to use the 2018 payment.
“If you do not get this done by the deadline, you forego the 2019 payment, and you revert back to whatever you had in 2018 as far as election. We cannot continually call,” Howatt stressed. “So it’s really important to go to these meetings, learn, hear about it, see what you have to do. I would say you would need to get in before the end of February to get this done for 2019.”
Howatt stressed that with the potential conditions heading into the 2020 growing season, producers need to have this paperwork taken care of sooner rather than later as deadlines loom. The season will be busy, and Howatt highly recommends that after getting the information from the FSA office to visit with the individual’s crop insurance agent to work out the best plan for the producer.
“As it changes, you have to change with it. You have to adapt and evolve. It’s important to be at these [meetings],” Borchardt said.
Zach Schaefer, an ag banker and crop insurance specialist at the Langdon location of Choice Bank, provided invaluable information regarding the crop insurance options available to area producers. Schaefer noted that agents would be able to assist producers with a lot of the manual part of the FSA applications and elections. Once a producer has their FSA election and crop insurance decisions settled, the next piece of advice to those in attendance was related to marketing the crops.
“Marketing is something that I think could be pretty intimidating for a lot of people. They don’t have as good of an understanding. So I would say easing into it, having the education, getting to crop insurance or marketing meetings is just going to help people do a better job of farming,” Borchardt noted.
Tommy Grisafi, a commodity risk management advisor at Advance Trading based in Valparaiso, Indiana, provided a no-fluff, exactly how it is approach to what the markets are doing, what producers can do to try and come out on top, and what is currently the biggest handicap that producers have. Grisafi explained that the very things that are helping producers are also hurting them. He referred to how the Market Facilitiation Programs have enabled producers to hang onto crops that they otherwise would have moved already. This coupled with the low interest rates means that the crop will only sell for a worse price later.
“At Advanced Trading, we can control flat price, but we can’t control basis,” Grisafi said. “We want you to sell right at a hot basis.”
Grisafi simplified the explanation of basis as being the function of a producer's ability to store grain until somebody needs it. Currently, Grisafi believes that the American economy is set for stock market prices to go up and commodity prices to go down. With this in mind, having a marketing plan for crops is going to make or break producers over the next 10 years, according to Grisafi.
“My plan and what I help people do is try to figure out how bad it’s going to be and then only get better from there,” Grisafi said.
By planning for the worst outcomes that could occur and managing risk accordingly, producers have a good chance to make gains. Crop insurance, a basic plan, and working with bankers are the best things to do. With yields continually rising across the country having a target price in mind when marketing and then selling at that price allows producers to capture markets that would otherwise go unknown.
“Because of the fluidness of commodity markets today, as relative to what that looked like even 10 years ago, news is so much faster today in terms of variables that impact commodity markets that you just have to be that much more prepared for it,“ Borchardt shared. “To his point [Grisafi’s], capturing the carries when they happen and the rallies when they happen and just being ready to jump on opportunities when they are there.”
For more information please contact the FSA office at 701-256-5521, your crop insurance agent, Choice Bank of Langdon at 701-256-2141, or Tommy Grisafi at 1-800-664-4383.