What are the Odds?

January 15, 2005

Farmers don’t mind going to school on cold winter days when the temperature doesn’t rise above negative two. Feeding the animals before the sun comes up in the morning and the thermometer reads negative 15 degrees provides an abrupt wake-up. But we decided to make that sacrifice so that we could learn some more about marketing and management for our farm operation. It was an opportunity to listen to a couple of experts, one that we see periodically on TV and find her independent views refreshing.

I listened intently as they spoke about different tactics used to maximize profits. There were lots of charts. A wiggly line in a box was not needed to illustrate the seasonal price trends, familiar to tax payers and writers of rent checks. February is not a good month to sell what we produce. Colored bar-graphs and columns of statistics help show what has actually happened, a proven history, the increases and decreases of all sorts of factors in a set time period. They help us to visualize weather patterns or perhaps the bell-shaped curve of opportunity.

We need not be worried about information collection. There are lots of people watching, tracking, and analyzing data of all kinds. We pay them to do it. They study the effects of inflation and the value of the U.S. dollar in the world market. They watch usage and demand, measure the supply on hand, and calculate imports and exports. There are specialists who study the weather in other countries and keep track of the progress of crops grown there. Unemployment rates influence purchasing. Diseases, energy prices, ethanol usage, and even the protein diet craze play a role in the rise and fall of farm prices. The products China is purchasing in preparation for the 2008 Olympics and the supplies they will need as the big event approaches are taken into account when studying price fluctuations.

My small brain could not absorb all the factors that might influence our markets. It is hard to comprehend million metric tonnes or anticipate global carryover. When an expert explains them to me I can see the importance of a gap in the charts, understand a pinch, and identify a dead-cat bounce. But the big question remains: how will it all affect me? There are those that collect a handsome fee for predicting exactly what will take place and when – UNLESS any one thing happens that no one can foresee, like the discovery of a single cow with some strange disease or a shift in the ocean floor. What are the odds of that?

By Patsy Bronner