4 Steps Farmers Can Take to Mitigate Risk in 2025

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From proposed tariffs to global demand for U.S. commodities, farmers are facing significant uncertainty this year. 

Outlined below are four steps you can take to mitigate risk for your ag operation in 2025, with expert insight from: 

  • Dan English, general manager of FBN® Finance

  • Cody Bills, director of U.S. producer advisory and brokerage for FBN

  • Mitch Roth, FBN regional proprietary agronomist

1. Develop Your 2025 Strategy 

Looking back at 2024 will give you insight into where you’d like to make changes and how you can improve. The different areas of your farm often impact each other so look at the big picture, not just individual elements.

“All too often I see people focus on a specific strategy,” says Bills. “Look at the whole farm. Look at your total production, your insurance selection, all of the trades that you've done throughout the year, and how all of that plays into your profitability.”

Make a 2025 Crop Plan 

Take advantage of the winter season to plan what seed you’ll need, how to boost your soil health, and what ag chem will protect your profitability. Margins are expected to be tighter in 2025, so it’s worth investing time into researching best practices and proactive solutions while keeping cost efficiency in mind.

Roth recommends asking yourself: 

  • What do you need? 

  • How much will it cost? 

  • Are there other products, like generic alternatives to name-brand products, that can meet those same needs at a lower cost?

Are you getting a fair price on chem? Use FBN’s free Price Transparency Tool to discover what hundreds of other farmers are paying nationwide, benchmark prices against farms local to you, and track seasonal trends.

Make a 2025 Marketing Plan 

Unlike some previous years when you could’ve been successful even if you procrastinated, this year it’s critical to develop a crop marketing plan.

“You need to make sure you have a plan for when you're going to sell and a strategy for how you're going to be pricing grain throughout the year,” says English, ensuring you’re doing so “in a way that matches the cash flows that you're going to have for your operation.”

Once you have a strategy in place, stress test your new plan by assessing how your ag operation would perform in various scenarios. 

For example, how might your ag chem budget be impacted by tariffs? How would having to replace a piece of equipment impact your bottom line? What is the lowest you can sell your grain and still make a profit?

“The biggest strategy is to track all of your risk decisions, calculate your expected profitability and exposure, then stress test your position with different price and yield scenarios. If you can measure it, you can manage it,” says Bills. “It’s critical to have clarity around what potential price and/or yield changes would mean to your insurance, cash market, and brokerage positions. By stress testing your farm's position you can identify potential price and yield scenarios.” 

However, even the best plans may need to be adjusted mid-season. Because pests, weather, the market, and other factors can make farming unpredictable, you should be ready to pivot at any time. 

English advises having a plan in mind for how much you want to have sold each month, but then moving that number up or down “as markets change.”

Better understand your current position, develop a 2025 crop marketing strategy, and help make key risk management decisions with an FBN Market Advisory Pro subscription.

2. Purchase Your Inputs Early

One of the easiest ways to control your costs is by being prepared. Purchasing your inputs early can help you lock in current prices, as chem often increases in-season. 

Purchasing and implementing a comprehensive pre-emerge herbicide plan and thinking ahead about insecticide and pesticide purchases now can save you time and money on rescue treatments later in the season,” says Roth. “If you don’t have it when you need it, you give the pests more time to become established while you go out and find the products you need to spray.”

Shop crop protection solutions. 

3. Build in a Cash Buffer

Many experts anticipate that 2025 may bring tighter margins for grain producers. To navigate these challenges, it’s advisable to use your cash efficiently and plan ahead for leaner months. Understanding when you’ll need cash and building in cash reserves can help keep your operation running smoothly.

“A lot of people are going to be short on cash this upcoming year, and you can certainly manage that through the timing of your input purchases, how much you have in your operating line, and how you manage some of your working capital,” says English. 

FBN Finance offers operating lines up to $1 million with great terms. Learn more or apply here with zero application fees.

4. Manage Your Sales

Evaluate Your Grain Bin Storage

Whether you’re storing offsite or have invested in onsite storage, grain bins can be a key part of your risk management plan by allowing you to wait for grain sale conditions to improve. However, when prices are particularly volatile, the opportunity costs associated with holding onto your grain may be quite high.

If you have grain in the bins, Bills advises, it’s a good idea to evaluate:

  • Are you storing it because this is part of your risk management plan?

  • Do you truly understand the cost of storing the grain?

“If you find that you're storing grain because you found yourself less marketed than normal, understand the opportunity cost of that grain,” he says. “Make sure that you're keeping it in the bins for the right reasons.”

What’s the ROI of on-farm grain bins? Find out in this blog.

Make Forward Sales

By creating a marketing plan, stress testing it, and building in a cash buffer, you’re positioning yourself to make confident grain sales decisions for your ag operation even when the market is uncertain. Being proactive, instead of reactive, will allow you to better navigate challenges and take advantage of the best opportunities. 

“It's not the type of market where you want to wait to make your cash sales,” says Bills. “Project out when you need the cash, how many bushels you need to sell, and know you need to be making forward sales so if the market does present an opportunity, you can lock in prices for delivery later and meet those financial obligations.”

“A big part of managing your cash flow is going to be determining when you make grain sales and making sure that you can get cash from those sales at the appropriate time and when you need it to finance your operation,” says English. 

Manage your sales in the Market section of FBN.


2025 Outlook

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