Considering that within the last year our industry’s big headache has shifted from, “Will I find enough grain?” to “Will my customers and I find enough credit to keep operating?” it becomes clear we are now fully engaged in the risk industry.
Admittedly, that observation is no news flash for you out there on the front lines, but what is noteworthy is how deeply risk elements have permeated the operating environment and how broadly the effects of risk will be felt now and in the future.
It’s also become clear the feed and grain industry is worried. Discussion around risk and risk management is a familiar topic at nearly every industry event, executive boardroom, bank office and coffee shop and the theme is surprisingly similar everywhere, when managing risk — there seems to be more questions than clearcut answers.
And why is that? Because, as a speaker at the recent NGFA Country Elevator and Feed Industry conference intimated, we’ve never experienced an operating environment like the one we are living through now, and it really isn’t going to get better anytime soon. You want more risk? Counterparty risk management is bringing a bevy of new players into our industry, namely legal experts, and as Diana Klemme reveals in this issue’s “Merchandisers’ Corner,” highly visible bankruptcies of VeraSun Energy and Pilgrim’s Pride only heighten the concern felt by managers and marketers everywhere.
At the same conference, Sarah Wyant, publisher/editor of Agri-Pulse and an expert on the political scene in Washington, D.C., discussed the election and outlined the risk/reward scenario on potential agency appointments. So, yes, risk is omnipresent and if keeping your facility and business running day in and day out isn’t risky enough, you better be ready to wrap your head around building a risk management plan to help address financial, regulatory and human resource issues.
It used to be the best risk management tool was knowing a top-notch millwright, a great manager and a grain merchandiser you could trust. Those partners remain a critical part of your inner circle, but from now on you better make room at the table for a financial planner, legal counsel and industry lobbyists. And a candy dish full of antacids. Happy New Year!