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Honored Advisor

When you see it coming....

We all have times in farming when we see a bad spell ahead on the horizon.  For us, it's when we get a report of a problem at the farrowing farm that sources our nurseries. 

Usually, that is not a real surprise, since we start to see some issues with incoming piglets and start to ask what is up.  The vet gets called in, and does his diagnostics.  That drives a decison-making process for addressing the current issue.  (Thank heaven we've got an ace vet on the company's team right now...that hasn't always been the case.)

On our end, our income will start to drop off a bit with each closeout, and sometimes drastically.. There is usually some warning, if you know what you are looking for, as my family does after 16 years in this business.  We are fortunate to have a basement compensation clause in our contract, which prevents us from going into total freefall, but it does not keep us in positive territory...just in a shallower pool of red ink. 

   

Still, expenses do not drop just because income does. The insurance premiums and property taxes do not adjust with our prospects.  You cannot let go of excellent employees for a few weeks or months, and expect to have them waiting for you when farm income rebounds. 

There is a lagtime with farrowings and gestation, depending upon which problem you are dealing with this time. 

Some interventions at the source farm have immediate effects, good or bad, and you just have to get past the bad ones to get to normal production and performance again. 

Sometimes, the vet's intervention is engaged, and it takes time to see how many are affected, and how improved the overall situation is afterwards, and how quickly. 

Some problems - most of them really - even once adddressed aggressively and "solved," still have to work their way through the system.  At least bad lots of pigs stay here only eight week each, where a finisher is stuck for twenty at a time. 

 

Some of this is cyclical...a good year with lots of mature sows in the herd sourcing us, so much immunity there.  Follow this with a less-stellar year, when replacement gilts are not equipped to handle the alphabet soup of TGE/PRRS/etc.  Out of the blue, there can be some issue with semen supply or a novel pathogen.  Those are hard to see coming.  We get farrowing numbers three weeks out, but farrowings are one thing...weaning numbers are what counts to us.  Suey, you know what I mean.

 

For those of us in animal ag, the leadtimes are different, and the causes of our issues are more or less herd health driven.  I subtle uptick in mortality in a lot here and there is not cause for alarm...but a trend is a red flag. 

In crops, I know a late, wet spring or any early fall freeze can drive your plantings and production or harvest in a wrong direction for a whole year.  A sudden spike in an input cost, like fertilizer or liquid N can catch you off-guard, and the impact can be drastic at the bottom line. 

I used to panic when I saw it coming.  I'd get very upset and anxious, even depressed. 

Yesterday, Mike and I had one of those now-familiar "it's coming" conversations.  There's a rough patch ahead, and we will have to make adjustments to our expectations for the farm this year.   

He said he was surprised at the way I had already planned to flow the problem, the cuts I'd already made and planned to make in coming weeks/months. 

The to-do list was of things we both have to prepare for and execute.  None of it is real sacrifice.  I will be watching healthy bank balances grow puny for an as-yet undetermined period of time.  I hate that, but I will have to handle it. 

I am not worried that we "won't make it," put it won't be much fun for a while.  the only question now is how long the rocky road will stretch out.  We can ask for projections of weanings from the serviceman, and they are pretty accurate most times. 

I guess we will be looking for a light at the end of this tuinnel.  This morning, we checked th e trucking schedule for next week, and although numbers of incoming pigs are down, they are not as bad as we had expected them to be at this point.  That gives us some projection fo income eight weeks out., when we move those pigs off the farm. 

This is when our hopes rise, and we cross our fingers that the worst is over, and not yet-to-come. They preg-check, too, so can fairly well project farrowings out for 4 months or so, too.  Those figures are less reliable, though, because a positive preg-check  does not tell you how big a litter is exepcted, just that something is in the oven. 

And, of course, the only number we can really count on is the one that walks off the truck every Monday and Thursday.  That drives our minimum pay.  Even better, is the ones that walk back on, and the weights they yield.  There is black ink territory. 

Good information is the main thing I need and require right now, so I can plan accordingly.  Bad information is worse than none at all. 

 I know that crop insurance insulates a lot of you from unacceptable levels of risk in the field.  Animal ag has no such safeguards, unless they are contractual ones, like the ones we have in place, for tying up our facilities while they get their act together again.  

  I realize dairy has taken it in the teeth lately.  Poultry and hogs are in trouble with current grain costs.  As contract growers, we are better separated from that than most.   

Mike gets the scoop - usually the vet's lab reports and what they mean or may mean for our pig flow -  directly from our serviceman. who I rarely see anymore.   I think (know) sometimes he delays telling me, especially when I am already under pressure from other forces.  I know he waited a while this year, mostly because I was so sick, and trying to get taxes squared away at the same time. 

That helps in one way, but is counterproductive in another...you know?  Just delays the inevitable, and slows my reaction time.  Time is, of course, money. 

There is an aggregate of probably several centuries of farming wisdom and experience resident in the regulars on this board.  I guess I am baring my soul here this morning, to ask for some of that as shared counsel. 

We've been through this before, and had way more at stake at the time.  I know how I react when I see it coming...and, yes, it's probably a part of my generally nore downbeat mood here lately.  It is, quite honestly, easier to be optimistic when the outlook is rosy, than it is when it's bleak, even temporarily so. 

I wanted to ask all of you: When you know it's going to be a less-than-great year on the farm, what is your first reaction? 

How does your reaction change, after you've had time to process that fact? 

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8 Replies
Senior Contributor

Re: When you see it coming....

Believe it or not, I check the household inventory. Maybe it is a bit Scarlett O'Hara, but I don't want to ever go hungry. When I can see that it will take me through the rough patch, I don't let the negative affect me too much. If I can reduce my trips to the store, I am not only saving money on food, but on gas too. I'm thankful that I get mileage for the route, given it's over 3.50. Also thankful that I have a good paying job. So many don't have that necessity.

Remember that adage you keep saying. There more than one way to skin a cat. You have to make the individual decisions that will calm you, even if it proves wrong. You're resilent enough and have seen more rough patches than most people. I am sure you can manage through this one.

 

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Advisor

Re: When you see it coming....

You know, I sometimes say this in jest, but it's probably true: I've always kept a minimum of six months' worth of food, toiletries, household supplies, etc., on hand.  When Suze Orman says to have eight months of emergency money on hand, that would never be nearly enough for me to feel at ease.  I do not know when I got to the point that I wanted to be sure we always could make it for a pretty long stretch without any purchased inputs, but  Mike says that I just finished using my Y2K stash of stuff in late  2009.

This is not one of those situations where I'd worry if I had to go buy groceries, or gasoline, or any necessities.  It is more one of making me feel that I will not be as ready to retire in eight years, might want to work another ten, to make up for this spell of marking time instead of making progress.  Only I could figure that two or three bad months will require two or three more years of work, to offset a bad quarter or so with long-delayed retirement....

We actually got better news than expected today about the upcoming few weeks.  Also, herd health is always better than ever after a thorough intervention, so we will hopefully get some of the best animals ever in a few weeks after that.  It's kind of like that glorious day we have after a hurricane...bright blue, sunny sky. 

I'll still be going to school two days a week until early May...will just stop at the store when I am in town for classes, so no additional expense.  I have always combined trips as much as possible, out of a sense of environmental responsibility.  Moneywise, my round trip costs roughly ten dollars now v. eight all  last year.  Two trips for an extra four bucks a week...not terrifying.  If I carry a cup of coffee from home instead of buying out, that offsets the entire difference. 

My TKD renewal, which is coming up next month, will be paid...that is a health priority for me, and Mike does not want me to let it slide.  I probably won't drop $125 for a new uniform anytime soon, but I've got two nearly-new ones already.   In real terms, this activity is a want rather than a need, but we feel we live close enough to the bone to afford a few small extravagances.   

I am just hoping no big farm repairs crop up unexpectedly...that Mike doesn't wrassle with the chainsaw and lose again...that none of the rental houses need a new well or roof or HVAC unit this year.  Keeping up with the equivalent of eight houses, some of them really old, is like owning your own neighborhood of money pits some years...and I just do not have the heart to raise rents right now.   

It only takes a few items to run up an extra few tens of thousands in expenses around here.   We do have a few other income streams, but they present their own bit of trouble in their own ways, too.  I guess the truth is that nothing is simple, and even easy money isn't really all that troublefree.   

Thank you , Miss Scarlet...I feel a lot better already! 

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Senior Contributor

Re: When you see it coming....

I thnk we think the same way. Isn't it much more reassuring to see what we could use in an emergency than a pilie of cash or a bank statement? You are setting aside money from your income streams for the potential big repairs, right? I do this out of my paycheck automatically for my car insurance. It may not be as big as your expenses, but comes twice a year. I hope that you got some rest after your internet prowling last night.

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Advisor

Re: When you see it coming....

I finally wound down about two or a bit after this morning. Had been out with Mike to a very nice dinner with a few friends up in Richmond.  I was the DD...it took me quite a while to settle down after a two-hour drive home, ending well after midnight.  I cannot just walk in and relax when I've been driving for that long, especially on the interstate.   

Youngest daughter and I had our spring craftsman's classic trip planned for today, so I was northbound again a bit after eight.  I have to say, it was the sparsest show I've been to in a decade or more, both in items offered and attendees. 

We were done looking in little over an hour...usually spend at least half a day and a good bit of money.  I only bought one small pitcher from my favorite potter, and two tees for Mike and a bandanna for me from our tie-dye artist friends.  With so little offered, it did not take a lot of discipline to resist the temptation to buy more. 

This is what I am seeing wherever I go now...not nearly as much going stirring in the economy.  These shows are usually mobbed, SRO and bumping elbows.  Today, lots of room for everyone to move around, and no big armfuls of stuff going out the door.  A couple of the crafters told us it was their last show in that location...so, they must have been doing very poorly. 

I think maybe you are right about looking at concrete necessities on hand being more comforting than simply reading the bank statements.  I heard recently that 97% of our money is digital now...and you know, that could all disappear without a trace!    You cannot eat a balance sheet....

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Senior Contributor

Re: When you see it coming....

If times get bad enough and the dollar becomes worthless, at least the bills could be sewn into clothing. Maybe even used for mattress stuffing. Smiley Very HappyIt wouldn't take much to get rid of cash if it amounts to 3% of the money. The banks have been trying to get the public switched to plastic (debt, credit and atm cards) for a long time. Looks like it wouldn't take much get rid of the minority who like the feel of cotton in their pockets.

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Advisor

Re: When you see it coming....

Seems everything goes in cycles here.  I got into a survivalist sort of jag maybe three years ago, which led to the wood cookstove Mike thought was extravagant at the time.  He loves it now and uses every day except the extremely hot summer ones.   

We expended a bit of savings then to be sure we had some non-electric essentials.  Putting the genset into service last spring has given me more of a feeling of security, too.  Could pump waer and keep foods refrigerated and frozen for an extended period. It's kind of like your pantry inventory...but on a broader scale, I think. 

Cash is an interesting subject...I paid for my purchases today in cash, and merchants receiving it seemed to be a mixed bag.  One acted weird when I handed it to her, like she didn't know what to do with it.  Another saw my bills and immediately gave me a small, unsought discount.  

I think we are focusing on signs that may or may not be omens right now.  Only time will tell, and guessing right and making ready does not mean your family will be the ones to benefit from your prescience. 

SIL told us tonight that we've had another neighbor robbed this past week....second one in as many months. Like LA with the home invasion report last week, it makes you a bit on edge.   Some just take what they want.... 

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Senior Contributor

Re: When you see it coming....

If it isn't physically taken, it could be digitally taken. I don't know which would be worse. Getting overdrafts from an account that you knew hadn't been debited or the thought someone invaded your private space? How do you keep the hackers out of your wireless internet system? That is one of the big reasons why I haven't gone that route (and online banking too) and sticking with the DSL instead.

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Advisor

Re: When you see it coming....

Our wi-fi router has its own security code, which had to be keyed in by anyone using the network.  Someone within range may be able to see my network from their screen when their computer looks for networks, but unless they have the code, they cannot log on. 

Same is true for my 3G on the DROID, or the MiFi card I used before that.  When I used it in the classroom, other students could see my network in their network queue onscreen, but did not have access to my service...no way I'd give out my code and have them run up my bill for exceeding the service plan! 

Similarly, I could see the Early College server on my laptop, but that system was limited to the high school students in their own associate's degree program.  The rest of the student body had a few puny hotposts, but finally went totally wireless all over campus in January

You used to have to have a code from Starbucks, and make a purchase with a registered SB card, to use their AT&T wireless on any given day.  Now, it's supposed to be free for all users.  Before I got my DROID, I had to download Kindle e-books at SB, 'cause my home wi-fi is N-based, and Kindle only works with B or G. 

I know our Staples office supply store in town has an open wireless network that you can tap into from hteir parking lot.  Some of the fastfood places like Panera have free wireless, too.  You will see this a lot in a college town, from my experience. 

I have seen people use the free hotspots on a routine basis, to avoid having to have an Internet bill at home.  Smartphones cut down on some of that need, I think. 

By the time hardwired (fiber optics required, I think)  DSL makes it out here, which will take a lot of government grants and I've been told seven more years, the satellite and cell-based services will be competive in speed and access package size, for no more money. 

I am still superstitious enough to make a paper copy of my online payments, at least for tax deposits.  I hole-punch any I make, and file in a ring binder under that month's tab divider.  At the end of the year, that is a good log of my e-activity, and serves as a guide for planning expenses for the year ahead. 

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