Steps You Can Take Now To Weather Global Turmoil
“Think global. Act local.” There’s probably no better advice to weather the current turmoil in global trade and markets than those four words.
Though the Trump Administration has announced a possible resolution to a trade dispute with Mexico, the North American Free Trade Agreement won’t be fully resolved until Canada also agrees to end the dispute. And the trade dispute with China continues to cause disruption in world trade patterns.
“So how does a relatively small individual producer in the U.S. survive when it seems like the weight of the world is on [his or her] shoulders?” asks Glenn Wachtler, a financial officer with Compeer Financial. In essence, he says, thing global, act local.
“Educate yourself and practice communicating the issues as you see them affecting your farm,” he says. “Do research on organizations that are aligned with your viewpoint, and show you support for them. These organizations likely have economists, lobbyists and legal teams that can be leveraged to your advantage.”
Then control the things that you can control. “You have control over your financial position, risk management plan, in addition to your family and personal relationships,” he says.
“Tighten up your balance sheet by reducing debt and if need be, liquidate unnecessary assets. Also add to your sources of income by taking on additional custom work, non-farm work or pursuing a new business,” he says.
Risk management also needs to be more than just a plan. “Your risk management strategy needs to be executed,” Wachtler says. “Reducing or eliminating crop insurance may save some dollars, but it is definitely not part of a sound risk management strategy.”
Family and personal relationships, particularly in times of financial stress, can be the most challenging aspect of farming. “Consistent and open communication can assist in uncovering challenges before they become problems, and opportunities may be discovered by listening to the goals and ideas of others who share a vested interest in the farm,” he says.
Also, don’t hesitate to ask ag service professionals for help. “Your banker can also be a valuable contact as you review your financial position and make changes that affect your farm,” says Wachtler.
Read more on dealing with financial stress and pressure here.