As I’ve done risk management plans for our clients this winter it’s interesting how many have red light analysis in the amount of net income that comes from government payments.

In some respects that’s understandable, because that’s the only game in town for making crop operations profitable. However, it’s interesting that an increasing number of our clients do not have to rely on government payments to make a good profit. Many of these operations have livestock for diversity, but others do not. I suggest in your long-range planning that you address this issue.

Some of our clients have built hog buildings to custom feed hogs. It doesn’t take a lot of specialized knowledge. The contracting company tells you what you need to know. In addition to the revenue, they get the fertilizer value from the manure.

Another client has a tree trimming business and also custom hauls slurry for hog operations. If the government payments stopped today, it wouldn’t threaten his farming operation.

Others have looked at value-added soybean crops. I really think the niche market offers a lot of opportunity for diversification there.

Think about the changes you would have to make to survive without government payments. If you can do that you’ll be in a better position to control your own destiny.

You can e-mail Moe at mrussell@netins.net

Editors note: Moe Russell, Soybean Digest Risk Management Editor, is president of Russell Consulting Group, a farm management agency in Panora, IA.

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