Forecasting More Than Just The Weather

20140104_131641 (1)Winter on the farm conjures up nostalgic images of horse and carriages, old red barns,
and farmers toiling away outside, looking after their animals. While this may still be a reality for some farms, particularly those with livestock, many farms no longer have cattle, pigs or horses around. Many of them, like my own, raise crops during the growing season. So what do we do during the winter? One of the most important – and most difficult – jobs we work at during the colder months is forecasting.

I don’t think I’m generalizing too much to bet that most of you read “forecasting” and immediately think “weather.” While that certainly is a component of our crop year planning, it is a smaller factor than you may think. Why? Simply put: there’s absolutely nothing we can do about it.

While we certainly pay close attention to long-range forecasts that attempt to give us an estimate of what our growing season will entail, these are only marginally reliable, and we really can’t plan for them. Not yet, anyway. Since the weather is out of our hands, we focus our energy on things we do have some control over.

  1. Selling Crops: While it’s rather debatable that predicting the markets is any easier than predicting the weather, we try our best regardless. Trying to sell your entire crop at the top of the market for a given year is about like picking a Superbowl winner after watching the first game of the season; you might get lucky once, we all know somebody who’s done it a couple of times, but most of us are pathetically, hopelessly wrong. So, we sell a little bit at a time, hoping to catch rallies and avoid dips. Over time, this disciplined approach does tend to prove to be successful. Although it does mean you may not always catch that extreme market peak with any more than 20% of your crop – but that’s better than nothing.
  2. Cash Flow: This moves in lockstep with point #1. We try and forecast our cash flow needs months ahead of time and plan our sales accordingly. While this is really simple arithmetic, there are always surprises that disrupt your plans.
  3. Crop Performance: Growing crops is a bit like planting your garden, only infinitely more complex (assuming you’re not making a living off your garden, that is). Crops are incredibly difficult to predict, and even harder to control. At the end of October,
    our weather station recorded our soil moisture level. We know how much we have to start with, but how much snow will we get? So far, not much! How much rain will we get? Well, the average crop available rainfall from April through August in Weyburn, Saskatchewan is 9.3 inches. So, if we go by that, and assuming the crop needs inches of rain to grow a bushel of grain, we should be able to predict our yields, right? The answer is a wishy-washy maybe; because that “average” takes years like 2015 with 4.4 inches of rain and averages that against a year like 2011 with 20 inches of rain. What exactly is normal? Nevertheless, it does give us a starting point- and that’s better than nothing.Nikon J1 June 004
  4. Equipment Upkeep: What’s going to break in 2016? Is it going to be the old, worn out-looking tires on the tractor, or is it going to be some random bearing on the combine? While it is difficult to predict what parts are going to fail, it’s not impossible. When you’re about to take your car on a big trip to the mountains in the middle of winter and you can’t seem to get any traction on ice, you would probably take a close look at your tires. Will they make the trip? Probably. But what if they don’t? The consequences could be severe. That’s how we look at our machinery when we think about the busy year ahead.

The reason I call winter the planning season is because it’s the one season we have when
we can take a moment and look hard at the year that was. What failed? What does that tell us for next year? Every hour of missed seeding, spraying or harvesting time costs us Case Quadtracdearly. We cannot afford preventable breakdowns. But, at the same time, we can’t go and fix absolutely everything that could possibly fail. The engine on one of our combines could fly apart this year, and that would be a critical failure. But that doesn’t mean we should go and tear the engine down to prevent a massively low-odds scenario.

The same goes for planning our marketing. Tomorrow, a catastrophic event could happen somewhere in the world that could hammer our crop prices. That doesn’t mean we should sell out the whole thing. Everything we do is based on probabilities.

Creating a usable forecast for the growing season requires a great deal of research, too. Every year, new products, services and ideas come to light, and it is critical that we open our minds to any option to make our farms more successful. You always have to be ready to realize your current way of doing things may be wrong – and that somebody somewhere is probably doing something better than you. Friends, neighbours, and of course the Internet are extremely valuable resources to develop new ideas.

“The best laid plans of mice and men often go awry” (Robert Burns) certainly applies to farming, but that doesn’t mean there isn’t value in planning and forecasting. In fact, I believe it drives that point home even harder. If we haven’t figured out what plan B is, what will we do when plan A fails? As dependent on the weather as we are, I prefer to have a plan F.

Winter is a busy time on the farm, and there is no shortage of work to be done, from hauling grain to moving snow to purchasing inputs (read more about what farmers do during the winter here). But it is also the ideal time to plan out the season ahead. We never know what nature will throw at us, but preparing for multiple scenarios allows us the flexibility we need to succeed.

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