Risk and reward.

Agriculture has always been subject to risks and rewards.

Today, when asked how things are going, most ag producers respond, "Costs are too high."

Two years ago they said, "The prices I'm receiving are terrible."

For veterans of the ag industry, neither is a surprise. Despite the many new and sophisticated price setting tools available to them, ag producers still can't completely control the prices they receive, or won't. They also can't completely control the weather or other curve balls thrown at them throughout the season.

They can, however, try to limit their upfront costs. Chances are, controlling costs were drilled into them at a very early age by their parents and especially their grandparents.

The upfront costs, and thus risk, of planting and harvesting an acre of corn has increased from $150 to $400 per acre. That doesn't include land rents that have also doubled in the past two years. However, half of the land is owned by operating farmers/ranchers and an estimated 70% of it is debt-free, so they don't face that cost.

But on the positive side, the prices they are receiving are wonderful. In fact, USDA just issued a forecast that showed ag producers will post record net farm income of $96 billion, a 10% increase over last year's record.

So, when the cost comment comes up, a smart marketer should have a convenient way to point out the reward the investment can achieve.

A simple technique is to have the latest commodity price quotes handy. Or, when operating in a store front, post the commodity prices of the day in a prominent spot and direct attention to them.

That will brighten any one's day.

Lynn Henderson

Publisher