Risk Management in 2022 Requires a Solid Game Plan



Farmers should look to data and strong partnerships with trusted advisors to make key decisions for their operations

February 14, 2022

Spring planting is getting closer, and farmers are cautiously optimistic about the year ahead.

“2021 was one of the best years for agriculture producers,” says David Widmar, an economist who specializes in agricultural economic insights. “But it’s always important to consider where we’ve been in the context of history.”

While farmers can’t expect a repeat of 2021’s profitable performance, they can look at historical data and lean on strong partnerships with trusted advisors to create a sound risk management plan for the year ahead.

“It's like hitting a grand slam with the bases loaded, but somebody's got to go to bat after that grand slam brought in four runs,” David explains.

In 2022, David encourages producers to “focus on getting on base.”


Getting “on base” means having the right game plan in place. While it may be tempting to stay hyper-focused on input costs in the current environment, farmers should have a sound understanding of their total cost structure.

“When I meet with customers, they often talk about the cost of inputs because they are so easy to track,” says Kyle Adams, a Kentucky-based crop insurance specialist with Farm Credit Mid-America. “I recommend really getting a solid understanding of your total cost of production, including all fixed expenses. With that information in mind, it’s time to build your marketing strategy.”

Kyle says that some farmers wonder how they can create a profitable marketing strategy when their yields are still unknown.

“That’s where creating a solid risk management plan comes into play,” he says. “It is our goal for you to not only understand the ins and outs of your crop insurance policy, but to have the best possible policy in place for your operation. With this knowledge, you can follow your marketing plan and market your guaranteed bushels with confidence.”

“It’s always nice to hit a home run, but base hits go a long way towards keeping the operation profitable,” he adds.


David encourages farmers to sit down and write out the risks that worry them most. Next, they should share that list with a trusted circle of advisors, including their financial officer, crop insurance agent, and marketing partners.

“Doing this means you are having better conversations about the risks you are thinking about and helps the people around you bring their ideas to the table,” he says.

Still, assessing which crop insurance products are the right fit for an operation can feel daunting. That’s why working with an experienced crop insurance agent is so important.

Lindsey Schwinn is a crop insurance specialist for Farm Credit Mid-America who works directly with farmers in Ohio. Like her peers, she takes great pride in building strong relationships with customers and helping them assess which crop insurance products are best suited for their operations.

We run your past yields, premium rates, and a variety of potential factors through thousands of simulations to determine the best insurance products for your business.

“Over the years, the expansion of crop insurance choices has made selecting the best policy somewhat complicated,” says Lindsey. “There are so many policy choices, and it might mean stacking multiple products, options, or endorsements together to get the right coverage that you need.”

This expertise is especially important when deciding between Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) Farm Bill elections ahead of the March 15 deadline. Lindsey has been advising producers to ask themselves if they should buy SCO or ARC.

“This decision is important and ultimately will determine which program you should enroll in,” she says.

Lindsey, Kyle and their team also have access to a proprietary tool that helps farmers make informed decisions about their coverage options.

“We can use this tool to look at past yields, premium rates, and a variety of potential factors and run them through thousands of simulations,” says Kyle. “The end result is a summary report that allows the customer to understand which products provide them with the highest chance of indemnity and have the most protection for their operation.”

Lindsey also points out this tool helps farmers take a holistic approach for their operation by comparing crop insurance options while taking his or her financial position into consideration.


“You want to find a crop insurance agent who will work for you. If you haven’t already started conversations with your crop insurance agent, we encourage you to reach out and get started today,” says Lindsey. “Don’t wait until the March 15 deadline to make these critical decisions.”

Kyle also emphasizes the importance of being willing to explore new options.

“Farming continues to change year after year, and so do the products we have to offer as protection for the operation that you are putting your blood, sweat and tears into,” says Kyle. “If you’ve been with the same provider for years, you might be missing out on important information or coverage options.”

At the end of the day, crop insurance agents like Lindsey and Kyle are committed to helping their customers succeed.

To find out more about Farm Credit Mid-America's crop insurance team, visit your local office to speak with a specialist or visit our Crop Insurance webpage.