Minding Ag's Business

Put simply, risk is the possibility of a loss. Risk management, then, is about understanding the potential causes of a loss and taking steps to minimize adverse outcomes.

Risk is plentiful on the farm; fortunately, so are the tools to manage it.

Farmers cannot control the weather, but larger, faster tractors help cover more ground in less time, reducing the risk of untimely planting or harvesting.

Farmers cannot control bugs and diseases, but they can apply appropriate pesticides and fungicides to mitigate the damage.

Farmers cannot control the markets, but they can manage the price they receive with futures, options, cash contracts, storage and more.

Then, there's insurance. Farmers insure their homes, vehicles, property and health, defining the worst-case scenario in the process.

Federal crop insurance has become the bedrock of the farm safety net, but it's not the only game in town. In the Progressive Farmer August 2025 issue's cover story, "A Smarter Way To Self-Insure," Nebraska farmer Phil High shared how he established his own microcaptive insurance company so that he can more directly address his farm's biggest risks. By cutting out other insurance companies, he's keeping more of the administrative and underwriting gains and growing them on a tax-deferred basis. (You can find it here: https://www.dtnpf.com/…)

For farmers who want to stay closer to their comfort zone, USDA offers several insurance policies that cover up to 95% of revenue, albeit on a county basis. That difference is key, and some experts debate whether those products are truly risk-management tools or just a way to place a bet on probabilities.

Regardless, knowing the details of an insurance policy makes all the difference. You can read more about these products in "Supplemental Crop Insurance ABCs" here: https://www.dtnpf.com/…

The risks are large in low- to negative-profit-margin years such as this one. I hope these pages inspire thoughtful reflection on how your farm approaches risk and what you can do to manage your worst-case scenarios.

Katie Dehlinger can be reached at katie.dehlinger@dtn.com

Follow her on social platform X @KatieD_DTN

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