How much value-at-risk (VaR) is your farm carrying this winter?
And what’s the chief cause of that risk?
With so much of this year’s crop in poor condition and in perilous situations, the average prairie farm’s revenues could swing by tens or hundreds of thousands of dollars, depending on how well those crops are treated by fortune, are managed and get marketed.
The obvious causes of risk are:
- The impact of the weather on crops still in the field and likely to stay there for the winter.
- The situation inside the bin, where many tonnes of damp crops might begin heating and degrading.
- The behaviour of buyers, who might begin discounting and degrading aggressively in a situation of far too much dodgy grain coming from prairie farms.
Those are all real, tangible and unfortunately general risks for farmers this winter. But I think that for many farmers the biggest risk could be posed instead by stress and anxiety leading to poor decision-making.
No matter where I have gone this fall and winter, I’ve picked up a constant murmur of anxiety and worry from the farmers I talk with.
Dave Meakin, a cheery and optimistic farmer I was chatting with at the Farm Forum Event in Saskatoon was having a good time, but admitted, “I want to get home and keep cycling bins.”
For all the valuable information and entertainment he was getting from the show (full disclosure: my company put on the event and I was involved as MC), the knowledge that he had a damp grain situation in his bins was biting at the back of his mind. He was fully aware of his own VaR.
Most people can handle occasional stress or underlying anxiety without too many problems. But at times the stress can become overwhelming. That’s when decision-making can get affected, and that’s what farmers need to be considering: am I making decisions for the right reasons, or am I pondering wacky ones because the stress and anxiety are pushing me into them?
That can be hard to assess, but it’s something farmers need to think about. Stress and anxiety can cause various types of poor decision-making, including:
- Capitulation — just selling at whatever price is available today because you just can’t stand worrying about it anymore.
- Denial — refusing to accept that some unpalatable prices will just have to be swallowed.
- Obsession — not being able to stop thinking about the crops in the field or wet in the bin — what they could have been worth and what they might end up being sold for.
- Paralysis — being unable to make any choices because every decision seems too fraught with danger.
- Desperation — looking for a magic bullet, secret weapon or miracle to resolve the problem.
- Paranoia — looking for evil forces or conspiracies to explain unfortunate situations.
Most decisions can be justified on rational grounds, but it’s important to be able to assess whether you’re motivated by those rational reasons or just rationalizing stress-based choices. With many farmers surrounded by other farmers facing similarly stress- and anxiety-inducing situations, it might be hard to keep that anxiety at bay when figuring out how to manage and market this crop.
It was great at the Farm Forum Event to see a number of sessions on farm stress, self-care and personal management. I attended three of them, and I gathered a lot of insight from them. So too did lots of farmers.
Heck, I can relate to the impairment that stress can cause to decision-making. I get very anxious about appearing live in public, so knowing I was going to be MC at this event preoccupied me for a couple of weeks beforehand.
For some reason, I became internally consumed with the question of whether I should go to a real barber to get my hair trimmed, or just pull out the clippers and cut my own hair, like I’ve been doing for 18 years.
This occupied much more of my mind than I’m happy admitting, and I ended up paralyzed, not sure what to do about this petty matter. I didn’t resolve it until the day of the show, when I just pulled out the clippers and buzzed my head, like I always do.
Farmers probably don’t have haircuts on their top-10 lists of current concerns. They have big-money decisions to make this winter and need to be able to think clearly to make decisions for the right reasons.
A good starting point for farmers is to take their mental health seriously and to be willing to consider whether they’re making decisions based on what they should be based upon or are instead being inspired by the impact of stress and anxiety.
That means farmers need to be adding “poor decision-making” into their VaR assessment for this winter especially because it’s something that’s hard to see but also likely to affect many.
If you figure out that you’re acting like a guy who is obsessing about how to get his hair cut, you can start dealing with it productively.