Page 16—Keystone Fwm Show Section 1, Uncaater Fanning, Saturdiy, January 1, 2000
(ContkuMd from 14)
haven’t reached our objective of
marketing balance.
2. Crop Revenue Coverage
(CRC) insurance. This product,
and its cousin, income protection,
have evolved greatly from the old
MPCI. They potentially take us
another step closer to where we
ultimately want to be. They're
cost effective because the
government greatly underwrites
the cost. The problem with a
stand alone insurance approach is
that it still misses the target of
marketing balance.
For example, with CRC,
coverage is limited to 75% of the
pnce/yield calculation. That's like
insurance on your home with a
high deductible and no
replacement cost coverage it’s
definitely not painless if you have
a claim.
Given that CRC utilizes a
spring or fall value, this insurance
product does provide insulation
from catastrophic loss, but does
not truly protect profits. Adding
to the potential coverage gap from
this strategy is the fact that the
price components are established
during the portion of the growing
season that is typically less
volatile.
About half the time, prices
rally significantly, only to fall to a
price between the two pricing
windows. Thus, our objective of
upside opportunity is essentially
unavailable unless the insurance
product is used in conjunction
with a marketing decision.
For a more balanced and
integrated approach toward
managing revenue and marketing
risk, and to take yet another step
closer to our balanced objective,
the producer could utilize a crop
insurance product in conjunction
with a minimum price cash grain
contract strategy
Absorbing this combined
concept is a little more difficult to
understand. It begins to integrate
the management of production
risk with the management of price
risk, but doesn’t necessarily take a
problem to contribute benefits,
because the payout comes from
the market. This moves us closer
to a true loss indemnification
function that also provides real
profit assurance, catastrophic loss
insulation, and upside revenue
opportunity.
Summary
If we find any slow time this
winter, let’s think about.
* Farming as a business
* Evaluating the various risks
as an integrated package and
* Managing the risks for more
dependable profitability and long
term farm success.
I’ll close with this quotation
that sums up my attitude toward
this process.
".. If a man look sharply and
attentively, he shall see Fortune,
for though she is blind, she is not
invisible." Francis Bacon
Max Armstrong, one of
America's best-known farm
broadcasters, is the voice of the
farmer to millions of people
throughout the United States. For
over 20 years, he's reported and
commented on the issues and
news that impact the industry of
agriculture in broadcasts from all
50 states, and from more than 30
countries. He's interviewed
presidents, and talked to farmers
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who call into his radio show on
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He's a vocal advocate of
agriculture, explaining issues as
wide-ranging as the benefits of
genetically modified crops to the
importance of farmland
preservation, to a general public
who doesn't fully understand the
business of farming.
Armstrong will be appearing
locally on November 23 at the
Lancaster Host Resort when he
makes the keynote speech at the
23rd Annual Agriculture-Industry
Banquet of the Lancaster
Chamber of Commerce &
Industry.
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As a widely-followed ag
journalist, being the voice of the
farmer is a role Armstrong takes
seriously.
"It puts a responsibility on you,
to fairly represent the industry, to
represent the producers who rely
on us for information every day,”
he says. "Farmers appreciate our
reports because in many
instances, there is nobody
speaking for them, so they're glad
to see somebody at the
microphone to defend their
industry."
Armstrong's daily broadcast
reaches a huge audience on
Chicago talk radio station WGN
and on over 400 local radio
stations. He also hosts a weekly
television program, "U.S. Farm
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Report." Farmers aren't the only
ones who listen to his program.
Armstrong says that the majority
of his audience is the non-farming
public.
"Many people want a
connection with agriculture," says
Armstrong. "Basically people
like farmers a lot. They admire
the lifestyle. They tend to be very
sympathetic when they
understand what a farmer goes
through. We always try to remind
our audience that every country in
the world supports its agriculture
industry, and there is a very good
reason to do so."
Armstrong doesn't hesitate to
let his listeners know how
important he feels the agriculture
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