Monday, January 26, 2009

Diversify or Die

5) Get Started Immediately. The best time to diversify your farm income was 15 years ago; the next best time is now. The old exercise adage “No pain, no gain” is equally appropriate to many agricultural enterprises. Rarely will a farm manager take action until the agony of maintaining the status quo is greater than the fear of trying something different. Unfortunately for many rural families, that something different means selling off assets.

Within each problem are the seeds of the solution. This idea is probably best described by the axiom “That which does not kill us makes us stronger” When the family farm experiences financial, emotional or spiritual pain, it is just nature’s way of reminding those persons that change is necessary to restore balance, whether the problem is cash flow, work load or personal fulfillment. Regrettably for most people, the misery never passes the critical threshold required for quantifiable action to occur.

Wednesday, January 21, 2009

Diversify or Die

Wouldn’t it be great if some one would come up with the ultimate all risk insurance package, one that protected the farmer from every peril known to agriculture. A parcel so comprehensive that it would protect each sodbuster or stockman against early frost, drought, hail, floods, closed borders, collapsed commodity prices and rising fuel costs. As icing on the cake, imagine if this definitive bundle of indemnity required no monthly payments or annual premiums. As surrealistic as this scenario sounds, it may come as a surprise to many, that such a policy is available to each and every person involved in agriculture and that coverage is called farm diversification.

While such a concept may come as a shock, the idea of risk spreading had its foundation established generations ago when first the pioneers began to settled this mighty land. In the days before stabilization payments, GRIP and NISA, farmers were able to make it from year to year by raising and selling a variety of commercial goods. Because individuals back then did not rely on a single agricultural product, it was virtually impossible to face a “perfect storm” of high feed prices that hog producers are facing today, that cattle producers lived through following the BSE, and low commodity that grain growers endured for a decade before that. While each of the aforementioned crisis’ appear to be unique, over the long run, these periodic “disasters” are statistically predictable and therefore the notion still exists that multiple commodity farms are best suited to for agricultural businesses to survive in the long run. Below are 5 tips on diversifying your farm.

Agroforestry As An Agricultural Alternative

#1 Shelterbelt Trees. Beyond a shadow of a doubt, shelterbelt trees provide the biggest return on the investment dollar year after year regardless of what type of farming operation they are planted around. The grain and forage producer will realize higher yields, the livestock producer will require less feed for the winter and higher gains during the summer, the orchard owner can plant varieties rated for warmer climates and the farmer or rancher will use less fuel to heat his house in the winter and less electricity to cool the house in the summer.

By stopping the wind, shelterbelts allow fields to retain more moisture for both grain and forage production. With documented yield increases of over 10% for wheat and up to 100% for forage crops like alfalfa, it’s a wonder that more farmers are not willing to reap the yearly benefits that shelterbelt provide. .

With the high Canadian dollar, export markets that have been hammered by BSE and feedgrain prices that have gone through the roof, it seems that the beleaguered livestock industry could use a couple breaks to get them by for another year. Unlikely as it seems, it appears the prosaic shelterbelt could be part of the answer to many of the stockman’s woes.

Every one who has blown his breath across a spoonful of hot soup knows that moving air strips heat off a warm surface at a faster rate than when conditions are still. Known as the windchill factor, the moving air makes the temperature feel colder than the actual thermometer reading. Warm-blooded animals such as cows, sheep and horses standing out on a windswept pasture are no different. When the wind blows they lose heat faster and need to eat more to maintain their body temperature. Ranchers can save more than a big round bale per season by properly sheltering their cattle. On a herd of 100 cows that can amount to a savings of $3000 per year, every year The following graphs illustrate just how much effect the wind has over average daily gain and the feed conversion ratio

The shade that the shelterbelt provides to the livestock in the summer can be as important to the producer as the wind protection in the winter. Livestock producers backgrounding cattle know that when the temperature soars above 30ยบ C, if the cattle do no have access to shade, water consumption can double and daily gain can drop to zero.