Jul 25, 2018

Turmoil, Tumult & Turbulence

Disruptive times provide opportunities for those willing to take risks

All you have to do is scan our daily e-newsletter, Industry Watch, to get a feel for what’s roiling and churning our industry right now. Trade fears, no deals on NAFTA, increased cost of steel driving up product prices, tariffs on our ag products … I shake my head daily at the turmoil, tumult and turbulence we’re seeing.

Sure, we knew the Trump administration was going to be “disruptive.” His behaviors, comments and tweets certainly have lived up to that promise. And regardless of how you voted, it’s easy to see the administration has created additional risk in ag markets.

Years ago I had the opportunity to listen to a rather accomplished grain trader talk about how he valued higher-risk years because embodied in that risk was opportunity. Wild price swings can signify the potential for greater profits, he said. (And greater losses, I thought to myself.) Based on the size of his business, it at least suggested he was on the right side of managing risk far more often than he was on the downside. He has since sold his business and retired, rather well, I’m sure, which is great because he earned it.

Recently, though, I wonder what he would say about the political risks created out of Washington today compared to the previous decade or two. I suspect his advice would be the same: keep your head in the game and find opportunity in managing risk. I just don’t know that we’ve ever faced this … intriguing? … of a risk environment before!

To be sure, I am not a grain trader. I don’t trade commodities or currencies or worry about basis points and futures. I am conservative in my retirement investment strategies. So I can’t say whether or not his philosophy holds true today. I can say — I sure hope it does and I hope we find market stability and greater opportunity ahead.

As my mother used to remind me, “This, too, shall pass.”

As a final point, I do know that turmoil and tumult and business worries demand a great deal of attention. But as you read about trade and tariffs in our newsletter, you’re also seeing articles on bin rescues and auger accidents, elevator fires and explosions. We preach safety constantly and so does the whole industry. I think now is a great time to make sure it continues to be at the forefront for you and your teams. Not doing so is one risk you can’t afford to take. ❚

Arlette Sambs

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Marketwatch: Feb, 07

US Corn Price Idx: ZCPAUS.CM

open: 6.7738
high: 6.8262
low: 6.7514
close: 6.8259

US Soybean Price Idx: ZSPAUS.CM

open: 14.8567
high: 14.9034
low: 14.763
close: 14.7962

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.355
high: 8.4803
low: 8.305
close: 8.4109

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.9823
high: 6.9923
low: 6.8449
close: 6.8929