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VRT Corn Planting
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John Burns
Posted 12/21/2007 22:54 (#265867 - in reply to #264861)
Subject: disagree on risk and variability



Pittsburg, Kansas

Hi Darrin. I agree on about every thing else but will disagree with the last part of that statement "It’s really all about reducing risk and variability".

Reducing risk? maybe, not sure about that. Usually increased risk is associated with the potential of increased profits but that is not the view most farm management gurus advocate. Usually reducing risks involves either a cost or a reduction in the possibility of greater profits. At least that's the way it works in the financial world. maybe farming is different but I doubt it.

The gurus mantra is reduce risk, reduce risk, reduce risk. We have heard it so much and it sounds so politically correct. As farmers we get paid for three things (hopefully). Our labor, our management and putting capital at risk. We definitely want to reduce risks we can not afford to loose (like buying liability insurance, at a cost) but if we try to eliminate all risk, we eliminate one of the legs of our three legged stool of profitability. Do we not actually increase risk (potential for greater loss?) when we increase our seeding rate in the higher yielding areas? Risk has become a dirty word but it is not something we want to eliminate, just manage appropriately. Calculated risks are exactly the kind of risks we WANT to take.

Reduce variability? We actually try to increase it on our farm. We try to maintain yields in our poorer producing areas and increase them in the high yield areas. That is actually producing more variability within the field, not less.

Just thought its been too long since I agitated you Smile

John



Edited by John Burns 12/21/2007 23:02
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