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COVID-19 highlights importance of risk management

Volatility in ag markets this year because of COVID-19 has highlighted the importance of risk management, according to the latest Purdue University/CME Group Ag Economy Barometer.

Jim Mintert says they asked farmers if they have a marketing advisor.

“21 percent of the farms in the survey said they have a marketing advisor, so almost 8 out of 10 farmers don’t,” he says.

Of the farmers surveyed who do have a marketing advisor…“When we asked the people who do have a farm marketing advisor how closely they follow those recommendations they said they follow recommendations quite closely,” he says. “So, it’s kind of interesting to see where we’re at with that particularly in light of the level of risk that’s out there and whether or not people might be making some shifts in their perspective.”

Farm operations that have a marketing advisor typically choose their advisor based on the recommendation of another producer or agribusiness, according to the monthly survey of 400 US farmers.