La Niña is Back! Could Disrupt Already Heated Market

La Niña is Back! Could Disrupt Already Heated Market

La Niñas weather event which came in October 2020 has returned for a second cycle. By 2021 Pacific Ocean waters along with the central and east-central equatorial band had returned to remarkably below normal temperatures. In simple words, temperatures in most of the Americas pacific region were below normal. Meanwhile, Atlantic Sea surface temperatures were above normal.

Table of Contents

1. Intro Paragraph
2. Effects on Markets
3. La Niña Biggest Impact

La Niñas weather events are generally related to cooler and wetter winters in the Northern Regions of America and Canada, along with the warmer and dryer weather conditions in the southern part of the U.S. This weather event can also disturb the weather conditions in South America, correlating with droughts in many areas of the continent and wetter than normal weather in other regions. Uruguay, Argentina, Brazil, and Paraguay have been affected by record-high temperatures in December when their summer seasons began.

Effects on Markets

The last two La Niña’s have different effects on the market. At the beginning of the August 2010 La Niña, spot prices for corn and soy rose significantly. On the other hand, wheat prices fell slightly. In the 12 months after the beginning of October 2020 La Niña, corn, wheat, and soybean prices rose.

The most recent events of La Niña came when commodity prices are rising swiftly, despite Federal revenue and other major central banks amid periods of quantitative easing. During the period of Arab spring in 2010 and early 2011, oil prices rose significantly and caused major disruption in the supply chain. From October 2020, crude oil and commodity prices start rising once again due to the COVID pandemic and global supply chain disruption. Oil and agriculture markets suffer a lot due to co-movement in the prices, as in some countries, corn and wheat is being used in making biofuels.

In addition to these macroeconomics factors, another reason for increasing crop prices during the events of La Niña might be correlated with increased production of soybean and corn in South American regions. In 2000, the US suppressed South American countries like Argentina and Brazil in terms of corn and soybean production. However, now these South American countries suppress the US exports in terms of net Corn exports.

La Niña’s Biggest Impact

La Niña’s worst impact on the North American region tends to come in during the winter seasons. The good news is that it is far away from crucial crop growing and harvesting seasons. To the Extent, La Niña affects North American summers, it seems to be related to relatively good growing conditions.

On the other hand, La Niña tends to thump South American regions during their summer season and is capable of doing more damage to crops. This may be the core reason for higher crop prices during the last two episodes of La Niña. As we know, the South American region leads in terms of corn and soybean exports, what happens there is very critical to Global Agri Markets.

Top

Livestock Market Shakeups You Need to Know About

Livestock Market Shakeups You Need to Know About

Livestock has always been a tricky business because there are hundreds of variables that affect price and demand, but recent shakeups in the U.S. and around the world have made it even more unpredictable. New laws and geopolitical factors have a huge impact on these markets, and changes for one type of livestock can affect prices for another.

Table of Contents

 

Prices could tank or they could go up at any time. No one can say for sure, but you can keep yourself informed and protected to make sure you come out on top no matter what happens. I’m here to help you understand the issues and the different strategies available for protecting your hard work and income.

California’s Animal Treatment Law

The state of California recently passed a new animal welfare law designed to improve conditions on the farm for calves, chickens, and pigs. The new law calls for an increase in cage sizes for livestock, not just for producers in California, but also those who sell livestock produce to California. While most cattle and chicken producers haven’t complained, the hog producers are not happy.

Hog producers in Iowa who supply over a third of our country’s bacon are suing the state, saying it will take tens of millions of dollars to meet the new requirements and that the people who drafted the law don’t understand the implications it could have on the market.

Michael Formica of The National Pork Producers Council said, “To make the physical changes because it’s going to require either tearing down farms or building brand new farms, with all the supply chain disruptions, we keep seeing figures in the $15-17 million range for a family farmer so if you’re a family farmer already struggling with everything else going on in the economy now if you want to continue in the business, you have to go to your banker and ask for a $15-17 million loan to build a barn. It’s going to drive family farmers out of business and lead to eventually far more consolidation and integration.”

Despite their obsession with the plant-based diet, somehow California accounts for over 50% of pork sales in the US. And if producers in Iowa and other states can no longer sell there, that will make it near impossible to get there and drive up the prices of pork in all 50 states.

Other Global Factors at Play

India has recently approved the importation of pork from the U.S. Pork sales are going to skyrocket because India is a huge market of almost 1.3 billion people. Will that offset the price increase due to the drop in demand from California?

Just like nearly every other industry in the world, livestock producers are running into major challenges due to supply chain issues stemming from the Covid pandemic. The price of beef and all livestock produce is going up because the price of feed has gone up. The price of feed has gone up because the price of growing the feed has gone up. And the price of growing the feed has gone up because the price of gas, fertilizers, chemicals and seed has gone up.

When President Trump was in office, he was trying to level the playing field throughout the world, putting tariffs on other countries, especially China. In the short term, it was painful, which made it hard for people to understand and accept, but long term, it could have provided more stability for the whole market.

Now with President Biden in office, where will the administration place its priorities? How will changes in climate policy affect farmers and ranchers? Will the focus be on growing exports to India, China? Will changes be made with typical trading partners Mexico, Canada, and the EU? Will the trade agreements be workable long term or will they be short term solutions? I personally know several ranchers who started selling beef directly to consumers due to the pressures on the supply chain issues during the past 2 years. Will that continue? Will the recently passed livestock market transparency bill relieve some of the pressure on the livestock producers?

No One Knows–So, Be Ready For Anything

Regardless of who’s in office, there are a thousand geopolitical factors that can affect the livestock industry. The experts don’t know what will happen, farmers don’t know what will happen, and the government certainly doesn’t know what will happen. If the prices tank, what will happen to your business?

You can get puts and calls on your beef prices, but what if the price goes up? You’re going to lose out on all that additional margin. But if you have Livestock Risk Protection, then you’re covered if the price goes down and your extra gains more than cover the policy. It’s the best of both worlds.

No one can predict the future, which is why insurance is so smart. Call us today to talk about your livestock insurance options.

Top

Apple Policy Changes: Make Your Voice Heard

Apple Policy Changes: Make Your Voice Heard

The Risk Management Agency (RMA) has been looking at ways to improve the Apple Crop Provisions. A recent press release explains the proposed changes to the apple crop insurance policy and asks for producers and the public to submit comments before February 14th, 2022. The changes are expected to go into effect for the 2023 crop year.

 

Table of Contents

 

We’ll break down who the RMA is, how they evaluate the apple policy, what the proposed changes are and how they may affect you, and how you can make sure your voice is heard on this issue.

How RMA Evaluates Apple Insurance Policy

Apple Crop Insurance Policy insures over 220,000 acres providing close to $1.5 billion in protection to apple producers. If you fit into this category, you know full well how many factors can impact the quality and quantity of your apple crop. Whether it’s hail, frost, wind, drought, or even disease and other types of damage, Apple producers rely on the crop insurance program to ensure their hard work and investment doesn’t go to waste.

Over the last 20 years, producers have been working with the RMA to make improvements to the policy as the industry has grown and changed. Some examples include the Varietal Group coverage and the ability to use it to establish unit structure to provide growers to better tailor their coverage based on their orchard’s unique needs.

Proposed Changes To Apple Crop Insurance Policy

Since 2017, the RMA has been evaluating the policy in conjunction with apple producers and industry representatives to ensure the success and sustainability of the Apple Crop Insurance Policy. Offering listening sessions for apple producers and industry representatives, the Risk Management Agency has been seeking feedback on the current policy as well as recommendations for improvement, and has announced changes that will:

  1. Enable producers to elect different coverage levels and percent of price elections by type, which allows producers to manage individual coverage and price risk more effectively.
  2. Allow producers’ premiums to be reduced in response to orchard management practices, such as removing or grafting trees, that typically occur after the acreage reporting date and decrease an orchard’s productivity.
  3. Allow producers to insure at a higher price for apples sold predominantly to direct markets or premium processing markets.
  4. Exclude apples sold for the slicer market from being considered “fresh apple production.”
  5. Introduce a fresh fruit factor to account for the reduced market value of production insured under the Quality Option sold for a grade other than U.S. Fancy.

As part of the USDA, the RMA is required by law to operate the program in ways that “improve the actuarial soundness of the federal multi peril crop insurance coverage.” Statute requires USDA to operate the program “to achieve an overall projected loss ratio of not greater than 1.0.”

Make Your Voice Heard

The RMA is soliciting comments from growers and the public on these proposed changes. Comments must be submitted by Feb. 14, 2022.

“It is vital that we hear from the producers and public about possible updates to our policies and products,” said Marcia Bunger, RMA administrator. “Information from apple producers will help us create a more effective and beneficial service to America’s agricultural community.”

Help others understand your perspective and how these proposals will impact your farm or business by participating in this discussion. This will help RMA balance the needs of all impacted apple crop insurance participants.

Interested parties can submit comments via the Federal Register or by mail using the sample format below:

apple email samplechart

Talk To An Agent About Apple Policy

Producers can purchase crop insurance exclusively through private crop insurance agents like Scott Colville. Specializing in apple insurance products, Scott has a thorough understanding of the way these policies work. If you have questions or want to talk through these changes and how they may affect you, feel free to contact Scott.

Top

3 Tips to Sleep Better and 3 Ways Your Crops Will Benefit

3 Tips to Sleep Better and 3 Ways Your Crops Will Benefit

Farming is known for being an around-the-clock job. With early mornings, time-sensitive work, and hours of manual labor, quality rest is necessary to complete work efficiently and safely. From losing focus at the wheel to drifting attention when operating heavy machinery, there have been too many times where I’ve seen a lack of sleep lead a hardworking farmer to a harmful and threatening situation. 

Apart from avoiding the many downsides of not getting enough good sleep, there are real, tangible benefits to improving your sleep habits.

3 Ways Better Sleep Can Benefit You and Your Crops:

1. Sleep can improve your concentration and productivity. Being well-rested can help you stay focused during the day and get more done in a shorter amount of time. 

2. Good sleep can improve your physical performance. If you are spending hours harvesting crops or working with livestock, being physically alert is necessary to work efficiently.

3. Sleep supports immune health and keeps you from getting sick. As a small business owner, getting sick is not an option for me because I can rarely afford to take time off–I’m sure you can relate. Take precautions and get your rest before it’s forced upon you by illness.

The list of good sleep benefits goes on! Check out some more benefits of relaxing your mind getting better sleep here

As an independent crop insurance agent, my number one priority is the well-being of my farmers and their crops. My goal is to help my farmers sleep better by knowing they have protection from causes outside their control. I believe in the power of a good night’s rest to help my farmers do their work to the best of their ability. While I’m not a doctor, over the years, I’ve come by a few helpful tricks to sleep better each night, and I hope they’ll help you too.

3 Tips and Tricks to Sleep Better:

1. Keep a stable sleep pattern regardless of weeknight or weekend night. As farming often doesn’t stop on the weekends, I’ve found this is often an easier trick for my farmers, but a reminder to keep to a schedule and support your body’s internal clock is always helpful.

2. Limit your caffeine and alcohol at night. This one can be tricky, especially on the weekends. Letting yourself cheat every once in a while is okay. However, if you know you have a long day of driving heavy machinery ahead of you or working with potentially dangerous tools, take a break from your favorite beverages. Doing so can help you keep your brain from becoming overstimulated and having a restless night. 

3. Take a break from technology. Avoid looking at emails and social media before bed. Not only can the bright screens interrupt your sleep patterns, but often the content you’re consuming, whether it’s work-related or not, can increase anxiety and make your mind more active when you are winding down. Save those things for the morning, and if you absolutely have to, use “dark mode” or “night shift” if possible and reduce your screen brightness. 

“Normal sleep” is different for everyone. Find out what other practices can help you sleep better at night and feel well-rested in the morning here.

Bonus tip! If you worry about your crops being damaged by unforeseen disasters, make sure you have a good insurance plan in place. This anxiety can be a major factor in your sleep whether you realize it or not!

If you are looking to rest easy knowing that all your hard work and investment (your crop) is safe, get in touch with us today to learn how we can help.

Top

Covid and Cows: The Pandemic’s Impacts on the Dairy Industry

Covid and Cows: The Pandemic’s Impacts on the Dairy Industry

Working in insurance has been a lesson in preparing for the worst while hoping for the best. I want my farmers to find success and get the most out of their yield, regardless of what nature throws their way. Covid-19 was the impact none of us saw coming and another lesson on what it means to prepare for the worst. As the pandemic began, I quickly noticed its effects on farming within the dairy industry. Dairy farming needs to move fast due to the nature of the product, but labor shortages and low demand stopped farmers in their tracks. All of my farmers had to adjust for the pandemic, but impacts on the dairy industry came quickly and hard.

Here’s how the pandemic was able to impact the multi billion-dollar industry:

Schools, restaurants, and hotels shut down during the pandemic, and major dairy clients no longer needed dairy products. Unlike other farmers that can freeze or store their yield, milk can only be stored in a cold silo or vat for up to 48 hours before it must be moved to the next facility to be pasteurized and homogenized. The brief shelf life and perishable nature of the product led dairy farmers to lose profits on large amounts of their yield. While other farming industries, such as meat, could not keep up with demand during the pandemic as shoppers frantically purchased large quantities to freeze for the uncertain months ahead, the short shelf life of most dairy products negatively impacted consumer demand. With fewer workers and initially lower demand, milk was spoiled and dumped.

As sales shifted from schools and restaurants to larger purchases from retailers, packaging and distribution problems arose. Demand for employment in shipping grew across the board with the pandemic, and like many industries, dairy did not have enough people to ship the amount of product they had to send to retailers. Even as demand grew for retailers, the inability to efficiently distribute the time-sensitive product resulted in more milk dumped. Supply chain difficulties ultimately led to increased production costs. 

If I have learned anything from Covid-19, it’s that you can never be too prepared. Take action to protect your assets before you even see a problem because you never know what might happen and how it will affect you. 

Whether your crop could face a loss of labor or markets or impacts on yield, a crop insurance agent can help you decide what insurance is best for your needs. Don’t grow restless over what could happen. We are here to make sure you get the highest return possible and help you sleep better at night! Contact us today to see how you can protect your crops from the unforeseeable. 

Top

5 Ways We Build Trust With Farmers

5 Ways We Build Trust With Farmers

Trust is a deeply important part of our business. Every sales agent in every industry knows this. But building trust is a little different with farmers. They will not give you the time of day until they trust you. It could take a year, two years, maybe even five years. Many agents won’t keep at it year after year–we will. Building trust is a must.

Table of Contents

1. Know your Products
2. Respond Promptly
3. Branch Out
4. Visit in Person
5. Never say “there’s nothing I can do.”

Here are the 5 ways we build trust with farmers:

1. Know your Products

Know them inside and out. You can fake confidence; you can’t fake knowledge. And don’t just know your products as an industry insider, but know how to explain them to a customer who is coming to you with their livelihood and is scared they’re going to be swindled. Know how to describe your product in their language and figure out ways to show how it’ll benefit their farm.

2. Respond Promptly

Time is money, so don’t waste your farmer’s time. If you miss a call or an email, get back to them right away, especially if your farmer has questions. The quicker you get back to them, the more they’ll learn you care about their questions. If you consistently offer instant feedback, you’ll build trust.

At the end of the day, it’s always about the farmer. Like any business, if you’re in business just to make money, you won’t be in business for long, nor should you be. If you’re trying to sell to make a client’s life better, you’ll be successful, and the farmers of our country will be better off.

3. Branch out

You build trust by letting farmers know about programs that are beneficial to them, even if it’s not a program you offer. It’s the old philosophy from “Miracle on 34th Street” (one of my favorite Christmas movies), but it still rings true . . . and it works. Do what’s best for your clients by finding them deals and discounts offered by other organizations.

4. Visit in Person

Go out and see them face to face. It lets them know you care about them, not just the money they make. Some farmers have insurance agents they only know by mail or phone. You can grow comfortable in a relationship like that, but you’re not building trust. Typically, I try to visit my farmers at least once a year. Even though I live in Michigan, I have a farmer in Pennsylvania I see about three times a year. There’s no excuse to never visit your clients.

5. Never say “there’s nothing I can do.”

Get that phrase out of your head. As an experienced sales agent, I’ve been trained my whole life to never say the sentence “there’s nothing I can do.” I’ve gotten so many new farmers who’ve left agents that told them that phrase. Yes, there may come a time when you can’t deliver the precise expectation your farmer is demanding, but that still doesn’t mean there’s nothing you can do. You can give that farmer options for what they can do next time, or you can help them figure out a new plan, or you can call the insurance company and let them listen to the call. You can’t always do everything, but you should never say you’ll do nothing.

At the end of the day, it’s always about the farmer. Like any business, if you’re in business just to make money, you won’t be in business for long, nor should you be. If you’re trying to sell to make a client’s life better, you’ll be successful, and the farmers of our country will be better off.

Top