Both in our lives and on the farm, sometimes circumstances are quite a bit different than we thought they would be. Whether a major or minor situation – the difference between what we think is going to happen and what actually happens can really throw us for a loop.

Going off-course in our farm business isn’t what anyone wants to happen – but the reality is that it’s going to happen to all of us at some point. No one is going to achieve their ideal scenario all the time, in every aspect of their farm business, but smart managers have strategies in place for how they’ll deal with those situations.

Active risk management

What really separates the farms that face adversity – and come out on top – is how the farm’s leaders deal with less-than-ideal situations or outcomes. It’s in how they plan for and, in some cases, even prepare for things that aren’t best-case scenarios. This is all part of being a good risk manager.

Taking a mindset of active risk management is extremely important in farming. Farm operations deal with factors – that greatly impact the business – that the leaders don’t have any direct control over.

Changes in weather, markets, government policy – these can feel overwhelming and lead to feelings of powerlessness. But good risk managers know they can still work to control what they can control, while leaving what they cannot control alone.

What to do

What about when even the best risk managers end up in a circumstance they didn’t foresee? Here are three steps to take when you find yourself in such a situation.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress.