Check out this Presentationto learn more.

All of this news has had me thinking a lot about the farmers out there and hoping that they all had some seriously good risk management plans in place. The thought of "how could anyone really be prepared for something like this?" did cross my mind, but after the Iowa flooding of 1993 and recent climate change reports suggesting that we should expect more extreme weather events in the future, perhaps there is no excuse for lack of preparedness.

It turns out that in 2007, 89% of both corn and soybean acreage in Iowa was covered by crop insurance. If those farmers had already planted their crops this year, they are probably calling up their insurance agents to file a claim. Depending on the level of coverage that they had though, they may only receive an indemnity payment worth half of what they would normally make. Though this is certainly better than nothing, one can only hope that there are other farm products not destroyed by the floods, or off-farm income to help offset the loss.

Some farmers who had not yet finished planting and have a prevented planting provision on their crop insurance now have to make the decision to try planting again in hopes that the bulk of the rains have stopped, or choose the prevented planting option. It is a choice between receiving 60% of their total insurance coverage liability (with prevented planting) and not planting the crop that year, or planting and having their insurance coverage reduced 1% for each day after the final planting date that the crop is planted. So as I understand this (and please someone correct me if I am wrong) if 60% x current coverage level > current coverage level - (1% x #days after final planting date) then if there is a good chance that a planted crop will get completely destroyed it makes the most sense for a farmer to take the prevented planting provision. How confusing. For further explanation click here.

For corn, the opportunity to plant again may have passed because at this point the ears may not mature before first frost. However, for soybeans there is still a possibility for planting and harvesting a crop. Jeff Caldwell, an Agriculture Online News and Features Editor talks with a farmer who says that with soybean prices being high it is appealling to try for planting. But who knows what the beginning of July will bring.

For more information on prevented planting provisions due to excess moisture or flood check out this presentation.

On June 3rd, producers, extension faculty and staff, community members, and more gathered at Stateline Farm for an On Farm Biodiesel Workshop. In the morning session, Matt Rudolf and Tim Angert from Peidmont Biofuels, a North Carolina biodiesel education organization, taught a hands-on biodiesel making class. This was followed in the afternoon by a tour of the biodiesel facility and process happening right there at Stateline Farm. Here are some snapshots from the day:

Here's where it all begins...
Extension Assistant Professor Heather Darby discusses the different oilseed crops that they are growing at Stateline Farm.
Check out the research that UVM has been doing for more info on crop types, costs, etc.: Alternatives for On-Farm Energy Enhancement in Vermont:Oilseed for Feed and Fuel

Harvested Seed

Getting out that oil!!
We got to look at two of the oilseed press options: Chinese and European. Both have pros and cons. The Chinese model is more affordable but may require some modifications and supervision. The European model is more expensive and a bit slower, but doesn't require as much fiddling with after purchase. I will try to get a link up here soon to more information. For now you could try contacting:

Vermont Biofuels Association
P.O. Box 307
Middlebury, VT 05753
Phone: 802 388-1328
Fax: 802 388-0210
info@vermontbiofuels.org

Once the oil is pressed, the fun has just begun...

Getting ready to do a titration to find out how much Lye we will need to complete out biodiesel reaction.

Aha! The pink indicates we have hit the right amount of lye.

So we measure out the amount of lye we just figured....

Mix it with some methanol...

Then add the oil...

And shake it!!

Next, we poured it into this contraption in order to let the glycerine and biodiesel separate. We would then be able to remove the glycerine and be left with biodiesel!!

It is usually a good idea to wash your biodiesel after processing. Piedmont Biofuels has a nifty piece of equipment in their travelling biodiesel processor that mists water into the biodiesel. That water then settles out, taking soaps and other impurities with it.

Stateline Farm Biodiesel Facility

John Williamson of Stateline Farm explains how they got started making their own fuel, how their facility works, and plans for the future.

I would love to hear your stories. Feel free to post a comment on this blog or send an email to: agrisk@uvm.edu

Whether you have agri-tourism and pick-your-own crops, or simply have hired labor, you have a certain amount of responsibility for the safety of those people and thus a certain amount of liability should someone get hurt or sick as a result of their activities on your farm.

Another legal consideration for farmers is environmental liability. The Environmental Protection Agency has a number of rules and regulations that directly impact farming operations such as the Clean Water Act, the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), the Food Quality Protection Act, and the Clean Air Act to name a few. Farmers should be aware of these regulations and prepared to deal with law suits or possible criminal prosecutions by State and Federal Agencies for environmental event.

For a complete list of EPA laws that affect farmers go to http://www.epa.gov/agriculture/agmatrix.pdf .

And finally, the structure of your farm business will have legal implications. Are you organized as a sole proprietorship? Partnership? Limited Liability Company? Each of these options has different consequences in terms of taxes, third-party liability, and estate planning.

Strategies for dealing with legal risk include:

* Carrying sufficient farm or business liability insurance: Many liability insurance policies do not cover pollution claims so be sure to find out if yours does and think about possibly purchasing an additional pollution policy.

* Develop employee procedures and management practices

* Develop good neighbor relations: There have been a growing number of liability suits against farms by adjacent landowners or community members asserting that the farm is damaging air and water quality. First and foremost limiting environmental risk, and then being sure to keep neighbors informed as to your farm’s production practices and desire to eliminate risks to the community can be a good way to avoid legal action.

* Use agricultural practices that will limit environmental risk: Keeping detailed records of all pesticide and fertilizer applications as well as creating a nutrient management plan will help to ensure that amounts of added inputs are sufficient, but not excessive thus reducing risk of contamination. Altering tillage practices and planting shelterbelts can reduce erosion, using Integrated Pest Management can reduce the number of pesticide applications necessary. For more ideas on limiting environmental risk check out the following:
+ Center for Sustainable Agriculture
+ Northeast Organic Farming Association
+ Natural Resources Conservation Service

* Consult with a professional in your state to find out what business entity will be right for you.

* Be sure to have all contracts in writing and to read contracts carefully before entering into them: this applies to all types of contracts including marketing contracts, contracts for sale or leasing of real estate, crop insurance coverage, mortgages, etc.

Additional Legal Resources:

"An Explanation of the Legal Risks Facing Farmers"

"Farm Transitions Assistance Offered by Mediation Program and UVM Extension" by Matt Strassberg

Center for Sustainable Agriculture. “A Legal Guide to the Business of Farming in Vermont.”
or contact the Center at:

University of Vermont Center for Sustainable Agriculture
106 Highpoint Center
Colchester, VT 05446-8800
(802) 656-5459
Email: sustainable.agriculture@uvm.edu

Many of the risks discussed on this website, although under the heading of production, marketing, financial, or legal risk, can actually be a direct result of the quality and treatment of farm labor. Unhealthy working conditions causing employees to become sick or injured can result in legal issues; careless hiring of inexperienced workers or lack of adequate training can result in damage to crops and machinery; inadequate compensation and lack of encouragement can result in employees with little pride in their work and thus little care in ensuring a quality harvest.

Effective human resource management is also an important part of keeping the farm running smoothly in the event of illness, death, or disability of farm operators.

Strategies for managing human resource risk include:

* Develop employee procedures and management practices: This should include hiring protocol, training schedules, performance review schedule, tips for good communication, development of an employee handbook,

* Disability and/or Life Insurance

* Develop a farm transfer plan or estate plan to ensure business continuity: Is there a family member or employee that wants to continue operating the farm after you retire? Are all family members and employees aware of your plan for the farm? Have the appropriate legal documents been written (wills, trusts, etc.) to ensure a smooth transition?

Additional Human Resources Risk Resources:

Department of Agricultural Economics Agricultural Labor Management Papers

University of Vermont Agricultural Labor Management Website

USDA Cooperative State Research, Education, and Extension Service Workforce Development and Safety Website

"Human Resource Considerations for the Hiring Season"

"Farm Transitions Assistance Offered by Mediation Program and UVM Extension" by Matt Strassberg

Presentation on Agricultural Labor Management

HRM Risks and Strategies in Fruit Production. by Bitsch, Fogleman, and Stup, 2004.

Strategies for managing financial risk:

* Keep good records and a detailed budget: The budget should be updated each month as actual expense numbers are recorded. This can then be compared to projected amounts and farm expenditures can be adjusted accordingly.

* Secure loans with fixed interest rates. Whenever financially possible, pay down debt so as to reduce the cost of interest.

* Be sure that borrowed money is going toward those things that will be most likely to guarantee a return. And don’t forget to take into account the cost of depreciation.

* Insure Farm Gross Income: Insurance policies such as Adjusted Gross Revenue or Adjusted Gross Revenue-Lite insure the gross revenue of your farm operation. This can be a useful tool to ensure that you make the amount of income that you need each year.

In an ever-expanding global market predicting end of season price can be a tricky (impossible?) task. How many times have you thought, “if only I had known that the price of corn would be so low I would have planted half the acreage that I did!”? In addition to price fluctuations, marketing risk can also involve loss of market due to closing of a processing plant, or farmer’s market.

Strategies to deal with marketing risk include:

* Developing a marketing plan: How much risk can you afford? Is there a market for the crops that you are growing? What marketing tactics will you use to ensure that you get a good price for your crop? These are all questions that should be answered prior to any planting or investing in livestock, etc. You may want to consult professionals such as futures brokers, elevator operators, financial planners, and farm consultant (such as the Farm Viability Program) to help develop your marketing plan.

* Joining a marketing cooperative: Individuals farmers do not have much control on the markets, but groups of farmers joining together into a cooperative can gain bargaining power and improve competitiveness of the operations. This is also due to reduced processing costs that come from pooling the product of many farm operations. New markets that desire larger quantities of product than one farmer can provide are also opened up as a result.

* Direct marketing: Selling directly to your consumers whether through a farmstand, farmer’s market, mail-order, pick-your-own, or farm shares, enables you to keep a larger portion of the final sale price than if you are selling wholesale. Direct marketing does, however, require additional management and skill in customer service. A huge part of making direct marketing work for you is ensuring a great experience for your customers so that they will keep coming back. See the links below for more information on direct marketing and organizing a successful CSA.

* Market Contracts: There are a number of different types of marketing contracts that can be used to help stabilize prices. Click here to learn more about marketing contracts.

* Storage: If the market price for your product at harvest is low one option is to store that crop in hopes that the price will rise. This can be risky as there is no guarantee that prices will not drop instead of rising, and for some crops there is also the risk of spoilage during storage.

* Adjusted Gross Revenue or Adjusted Gross Revenue-Lite Insurance.

Marketing risk links:

“Community Supported Agriculture: Organizing a successful CSA” by Cathy Roth and Elizabeth Keen, UVM Extension SARE Bulletin #2, 1999.

"The Challenge:Reducing Your Exposure to Marketing Risk"

"Understanding Dairy Markets" website

"Farmer Cooperatives in the United States", USDA Rural Business Cooperative Service, 1990.

"Direct Marketing of Farm Produce" by Vern Grubinger, University of Maine Cooperative Extension Bulletin #7143.

Introduction to Risk Management, RMA, 1997.

Risk Management Basics

Building a Risk Management Plan, RMA, 1998.

About the Risk Management Agency, RMA, 2008.

Risk and Risk Management, RMA, 2000.

Click Here for information on Contracts.

Do I Need Crop Insurance? self-evaluating crop insurance as a risk management tool in New York State, Steve Richards, Cornell University

Vermont Crop Insurance Agents

AGR-Lite Training

Presentations

Crop Insurance Briefing

Crop Insurance Briefing for Organic

Risk Management: What is it and How is it Done by Bob Parsons

Crop Insurance Making Good Business Sense: Vermont State Overview

Articles

General

"Building a Comprehensive Risk Management Plan"
"Crop Insurance Sign-up for Corn Due by March 15th"
"Crop Insurance Options for Limited Resource Producers and Producers of Noninsurable Crops"
"Farmers Have Until March 15 to Sign up for AGR-Lite Crop Insurance"

Production Risk

"Production Risk: What Can You Do About It?"

Marketing Risk

"The Challenge:Reducing Your Exposure to Marketing Risk"

Financial Risk

"Dealing With Financial Risk Management on the Farm"

Legal Risk

"An Explanation of the Legal Risks Facing Farmers"

"Farm Transitions Assistance Offered by Mediation Program and UVM Extension" by Matt Strassberg

"Keeping Farmland Working in Vermont: A Lease Agreements Guide for Landowners and Farmers"

"Transferring Ownership of Farm Assets or Retiring From Farming"

"Your First Farm Loan"

Human Resources Risk

"Risk Management on the Farm: Human Resource Issues"

"Human Resource Considerations for the Hiring Season"

Crop Insurance Factsheets

Corn (Silage or Grain)
Corn Silage
Corn-Crop Revenue Coverage
Forage Seeding
Nursery
Small Grains
Apples
Fresh Market Sweet Corn
Peaches

Adjusted Gross Revenue
Adjusted Gross Revenue-Lite

Organic Farming Practices
Prevented Planting Provisions
Requesting Insurance not Available in Your County

Posters

Risk Management and Crop Insurance

Often the first thing that comes to mind when discussing farm risk is the risk of crop losses due to weather, pests, disease, genetics, machinery problems, and/or inadequate input management.

Some strategies to deal with production risk include:

* Diversification: Growing a variety of different crops can protect against some production risk, however, many specialized farms that have a large financial investment in machinery specific to one crop may not have the option to grow a variety. There are other types of diversification that may help though. For instance, diversifying income sources by getting off-farm income for yourself or your spouse, or looking into on-farm renewable energy production.
o CVPS Cow Power
o Earth Turbines
o Calculating On-Farm Renewable Energy Production: The Feasibility of Farm Energy Self-Sufficiency in Massachusetts by Jericho Bicknell
o "The Market Potential of Farm-Scale Oilseed Crop Products in Vermont" by Emily Stebbins

* Investing in new technology: Sometimes the greatest risks to your crop production can be mitigated by investing in new technologies. For example, if low rainfall is a common occurrence in your area, think about installing irrigation equipment. If early frost is an issue, think about investing in frost protection.

* Have strict maintenance protocol for all equipment.

* Purchase crop insurance: In the same way that car insurance provides the owner with a payment in case of a wreck, crop insurance provides payment in case of yield losses due to natural disasters or market fluctuations.

More on Crop Insurance

August 8-10, All day: NOFA Summer Conference, University of Massachusetts, Amherst, MA. Keynote speaker this year will be DR.Arden Anderson, author, physician, international lecturer and educator on holistic and nutritional medicine and sustainable agriculture. His most recent book is titled Real Medicine, Real Health. A workshop for everyone who wants to start learning about food and land: from beekeeping, to sheep care, to grain growing, to plumbing! Activities and workshops for children and teens too. Sponsored by Northeast Organic Farming Association. Early bird discount if you register before July 7th. Register online at www.nofa.org. Contact: Deb Pouech, 860-684-0551, nofasc@hersnhoney.com or Julie and Jack, 978-355-2853, nofa@nofamass.org (no calls after 9pm please).

August 13th: Women's Ag Network Workshop: Water, Wire, and Wellness. 9am to 3pm. This workshop will help farmers new to livestock farming learn more about fencing and watering systems, as well as strategies for maintaining healthy animals. Maple Wind Farm, Huntington, Vermont. To register, send $25 if before July 29th and $40 if after July 29th to: From the Ground Up, UVM Extension, 617 Comstock Road, Berlin, VT 05602. Please make checks payable to "UVM". For more information contact WAgN at wagn@uvm.edu or 802-223-2389.

August 15th, 22nd, and 29th, 1-4pm: Parasite Management and FAMACHA Training, Aug.15 @ Shelburne, VT, Aug. 22 @ Grafton, VT, Aug.29 @ Bath (Woodsville), NH. UVM Extension Livestock Specialist Chet Parsons is holding workshops to help small ruminant farmers and breeders deal with assessing the internal parasite problems in their animals and how to implement best management practices. He will use the FAMACHA system of determing anemia in animals. Class size limited and pre-registration required. $35 with FAMACHA card and $25 without card. Deadline July 28th.Contact: Chet Parsons, chester.parsons@uvm.edu, 802-524-6501 x 212.

August 20th, and 27th, 1-3pm: Lamb Grading Workshop, Aug.20th @ Shelburne, VT, Aug. 27th @ East Ryegate, VT. Learn to grade your lambs for carcass quality with UVM Extension Livestock Specialist Chet Parsons. Hands-on workshops with live lambs. Pre-registration required. $25 per farm. Contact: Chet Parsons, chester.parsons@uvm.edu, 802-524-6501 x 212.

August 27th, 10-2: Holistic Planned Grazing in Action, Maplewood Natural Organics, HIghgate, VT. As part of the summer organic livestock series put on by the Northeast Organic Farming Association-VT, Eric Noel will share hi on-the-ground experience with Holistic Planned Grazing, a management system designed by Allan Savory. Eric will give an overview of his current and past grazing charts, results, and more. Sarah Flack will facilitate a farmer discussion on possible applications. Workshops are FREE for all organic and transitioning dairy and livestock farmers-otherwise, $10 for NOFA-VT members and $15 for non-members. Drinks and snack provided. BYO lunch. Directions: Exit 20 off I-89 (2nd St.Albans exit) Rt 207 north all the way to Highgate. Take Right at T onto Rt.78. 1/4 mile go left on 207 North/Gore Rd 3.5 miles from center of town. Eric Noel: 868-5083

September 10th, 10-1: Organic Dairy Grazing and Animal Health Management, Taconic End Farm, Leicester, VT. As part of the summer organic livestock summer workshop series put on by the Northeast Organic Farming Association-VT, a pasture walk and lunchtime discussion with Annie Claghorn and Sarah Flack on health care treatmens and prevention for an organic dairy including homeopathy, herbs, and other materials. Co-hosted with the VT Pasture Network at the Center for Sustainable Agriculture. Directions: Take Rt.7 to Leicester. Go west on West Rd. Bear Left at first Y, at 2nd intersection, which is a T, turn left. Farm is first on the right. Annie Claghorn and Catilin Fox: 247-3979. Contact: NOFA-VT, 434-4122, info@nofavt.org to register.

Risk is a natural part of any farming operation. Farm success depends so much on factors that a producer cannot control such as weather and global markets. In recent years, risks facing Vermont farmers have increased due to changes in the nation and the world.

* Increased globalization has created more intense competition for farmers due to importation of cheaper goods produced outside the United States.

* The development of new technologies has enabled increased production of goods leading to price decreases and thus increased competition. The new technologies and increased production has also led to specialization which means increased risk of large crop losses in the case of disease, pest infestation, or certain weather events.

* More volatile weather patterns are a threat to crops and livestock.

* The increasing cost of fuel and feed is influencing farm operations.

* The government is putting more responsibility for risk into the hands of farmers themselves. In other words, farmers cannot expect to receive a check if there is a disaster. Farmers must either be enrolled in the Non-Insured Crop Disaster Assistance Program, or have a crop insurance policy in order to be considered for assistance payments if a disaster should occur.

The intention of this weblog is to convey information to producers, consultants, educators, students, and other interested parties about current risks that Vermont farmers face and provide information about workshops, strategies, and other resources that can be used to manage those risks.

This blog was developed by UVM Extension.