Many 'family farms' even in the dainty UK are multi-million $ businesses, run by people who know how to shear sheep and bunt hurdles and wurzels. They complain about the effect of market prices, and the worry they create, but they are taking on these risks unhedged (and farmers being unhedged makes me giggle). Similar size businesses would we hedging their FX risk through their local bank with simple FX forwards. Farmers could directly hedge corn prices (commodities futures), and indirectly hedge fertilizer and diesel prices with oil futures. They could virtually remove market risk and concentrate on the risk inherent in the business (weather, disease etc)
I would offer this advice, but they are all so clever you can't tell them anything. They are a very insular bunch in general and their tie to their land is a bit more than the blood sweat and tears mentioned below, its a bit more like being the Lord of their Manor. I agree with the top post, they would happily be less profitable to save tax. It is intriguing (but not surprising to me) that many UK farmers voted to leave the EU, despite it being their main source of unearned income and the main market for their goods, and despite the National Farmers Union coming out in favor of remaining. I have noticed the young generation of farmers be openly aggressive towards foreign people (not that they actually meet any). It is kind of sad, but when they all lose their farms after Brexit they will still blame the French for it.
Disclosure: worked a lot with farmers, and have some in the family
Dominic Cummings, architect of the Vote Leave campaign has been pretty open about what they regarded as the winning factors:
" Would we have won without immigration? No. Would we have won without £350m/NHS? All our research and the close result strongly suggests No."
Even though I was a Remain voter I have to credit Vote Leave with how dynamic and data driven their campaign was - they knew what buttons to press based on large quantities of raw data.
Note that I am not saying that the claims they made in their campaign were correct - far from it.
What I mean is that they managed their campaign in a data driven and dynamic way - even to the point of hiring developers and writing their own polling platform VICS:
It sounds like you know some truly nasty people - the fact they are farmers is merely window dressing. Some huge broad brush strokes tarring people in that comment, and almost a gloating tone about the idea of people losing their livelihoods because of Brexit. Quite odd.
I know of UK farms that hedge their crop and currency prices. There is a common theme of wanting to be both hedging and getting the upside, but I don't think they are all unhedged.
>There is a common theme of wanting to be both hedging and getting the upside
I see that in my professional life x10. When I suggest 'options' (so you get the option of taking the hedge or the market at the strike date) they scoff at the margin. We are back to Brexit again, they want to have their cake and eat it!
I'm sure you are right that there are some farmers, especially the 'agi-businesses' that are hedging. There seem to be many more that are winging it.
I would offer this advice, but they are all so clever you can't tell them anything. They are a very insular bunch in general and their tie to their land is a bit more than the blood sweat and tears mentioned below, its a bit more like being the Lord of their Manor. I agree with the top post, they would happily be less profitable to save tax. It is intriguing (but not surprising to me) that many UK farmers voted to leave the EU, despite it being their main source of unearned income and the main market for their goods, and despite the National Farmers Union coming out in favor of remaining. I have noticed the young generation of farmers be openly aggressive towards foreign people (not that they actually meet any). It is kind of sad, but when they all lose their farms after Brexit they will still blame the French for it.
Disclosure: worked a lot with farmers, and have some in the family