Perspective: ISA Vision Reflects Risk Management Importance
The Illinois Soybean Association’s (ISA) vision is to enable Illinois soybean producers to be the most knowledgeable, sustainable and profitable in the global marketplace. To accomplish this task, risk management has to be a priority in our long-range strategic plan.
When I consider risk management, the first thing I think about is pricing my crops and controlling my costs. But risk management is much more.
USDA acknowledges uncertainties inherent in weather, yield, government policies and global markets contribute to our risk. Below are five general types of risk USDA identifies followed by key points from ISA’s strategic plan that shows how we are addressing risk management.
Production risk derives from uncertain natural crop growth. Weather, disease, pests and other factors affect both crop quantity and quality. ISA’s goal is to optimize farmer profitability through yield and sustainable production practices.
Price or market risk refers to uncertainty about prices producers receive for commodities or pay for inputs. ISA’s goal is to promote preference of Illinois soy for export markets, biodiesel and animal agriculture. We ensure Illinois soybeans and soybean products reach their intended destinations efficiently.
Financial risk results when the farm borrows money and must repay debt. This includes rising interest rates and restricted credit availability. ISA’s goal is to optimize farmer profitability through business management.
Institutional risk results from government actions. Tax laws, regulations and support payments are examples of decisions that have a major impact on the farm business. We expand the influence and reach of ISA through member, corporate, industry and advocacy efforts that positively impact Illinois soybean farmers.
Human or personal risk refers to health or personal relationships that can affect the farm business, like accidents, illness, death and divorce. While not a specific point in our strategic plan, ISA recently established a health insurance task force to speak to this challenge.
You can read more about these and other areas of risk management in this issue of the magazine. We look at everything from change management to crop insurance to succession and self-employment. Consider this January edition a business management guide for your 2019 season. ■