Steven Covey is the author of the 'Seven Habits of Highly Effective People'. One of those seven habits is to 'begin with the end in mind'. So lets' begin 2013 by thinking about the end of 2013 and how your 2013 accrual income statement and balance sheet might turn out ...and lets' do that with a review of 2012. An introspective look the management of your operation for 2012 could provide good insight for bettering your management skills and abilities looking forward into 2013. The Good Lord gives us all different gifts in terms of the skills we have. The trick is to know ourselves well enough that we have the ability to seek outside assistance or education for the areas where our skills lack.
While sometimes one might be lucky rather than good with their marketing, it is difficult to be lucky for multiple years. Consistently good marketing requires some thought and study of the markets for the crops you produce. Think back to your plan for selling your 2012 crop...did you have a plan? Or, did your plan run off the track when the depths of the drought set in. Having a plan and making adjustments to it are better that not having a plan at all. Having a plan and making adjustments to that plan are to be expected; no two years are alike. If you need to sharpen your skills, find a class to take..most of our community colleges have very good instructors...invite a neighboring farmer to go with you and compare notes. There are plenty of opportunities to learn about forward selling, futures, options, etc...this is the area of our business where one has little control, so to be educated is critical to how your 2013 accrual income statement will turn out.
Production and Revenue Risk - RMA data tells us that 80.5% of the corn acres and 77.1% of the soybean acres were insured in Illinois; take the time to educate yourself about crop insurance so that you can make a knowledgeable decision. A crop insurance policy is a complex product; with the potential that it could make up a large share of your income, it would be in your best interest to know the details of the policy. It is far too easy to make this decision from information heard at the coffee shop - perform your own due diligence. The farmdoc website is an excellent resource for information on the various policies and the estimated premiums for 2013. Production agriculture remains in an excellent position in that we have crop insurance available - there are few industries where one can insure their revenue stream at any cost.