Risk management through product diversification may not be the first thing that comes to mind for many people when they think about the concerns of America’s farmers, but in fact, it is an underlying strategy for farmer Ron Blach and drives many of his decisions each planting season.
“Diversifying spreads your risk,” Ron says. “You never know what market prices are going to do, or the weather. Depending on rainfall, I may not have a wheat harvest one year, but my other crops will balance that out.”
Ron and his wife, Lisa, farm 3,900 acres of dry and irrigated land in eastern Colorado, some of which his great-grandfather homesteaded in 1887 and his family has been farming ever since. Two-thirds of the land is irrigated, and he grows everything from beets and potatoes to millet and confectionary sunflowers used in consumer food products. “It depends on what the market is offering,” Ron says, explaining that he researches contracts being offered for various crops and looks for the best margin. “I don’t have to take the contract, but I can use them to decide what to plant,” he says.
On the remaining dryland acres he follows a rotation of corn, sunflowers pressed for oil, and a fallow season to allow the land to replenish. Even in this standard rotation, though, Ron keeps his options open, deciding during the season whether to harvest the corn for feed, sale to an ethanol plant, or for silage, which is used for its fiber in cattle feed and involves harvesting the stalks as well as ears.
To further diversify, Ron recently became a partner in a dryland wheat and corn operation in Oklahoma. He also has a 240 head cow/calf and stocker cattle operation, pastured in part on land owned in a separate partnership with his father and brother, an indication of the strong family ties that he credits with helping him grow his operation from 640 acres he bought with his brother in 1987 to today’s 3,900 acres. “My wife is very much involved. My brother, father and I share equipment and help each other when we need it. Our entire family is involved when it’s time to harvest,” he says.
“Ron’s been so successful partly because of his diversification strategy,” says Premier Farm Credit's Chris Hornung, “but also because of how well he manages his operation. He puts a lot of thought into every decision.”