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Ramping up your risk management plan ahead of the 2023 season

The president of a commodity brokerage firm says now the time to ramp up risk management plans.

Jim Gerlach is the president of Brookston, Indiana-based A/C Trading Company.

“Considering the fact this this bull market is going to be three years old in June, farmers should be getting a lot more defensive particularly with their expenses as high as they are,” he says. “Ultimately the expenses stay higher as the revenue falls, and it really impacts your bottom line in a hurry.”

He encourages farmers to have a back-up plan and consider options.

“I’m a big proponent of options. They’re a terrible investment tool, but they’re a great risk management tool. They’re like term life insurance. You’d like to know your loved ones are taken care of with an insurance policy. It’s the same thing with marketing,” he says. “You don’t want to use that thing but if you need it, you need it. In a good and solid year, these things are going to expire worthless and they’re a cost of doing business. But in a year when you see prices drop precipitously and way more than you think they can, they’re a lifesaver.”

Brownfield interviewed Gerlach during the 2023 Agricultural Summit by First Farmers Bank and Trust.

Audio: Jim Gerlach