Managing Risk to Preserve a Legacy
As a fifth-generation hog and crop farmer, Andy Bakken is no stranger to the myriad external factors that can affect a farm. Markets are never certain, weather events have become more intense and, this past year, supply chain challenges entered the mix.
“Since I started farming in 1999, I haven’t seen a year quite like this past one,” Bakken explained.
Bakken raises hogs and beef cattle and grows corn, soybeans and alfalfa on 1,100 acres in Albert Lea, Minn. He and his wife Jody own Bakken Ventures, which is also home to a niche farrow-to-finish hog farm that provides pork and, more recently, beef to local meat lockers and restaurants in the Twin Cities.
Over the recent growing seasons, the Bakkens saw hail storms hit several fields — a challenge made worse by prices hovering at or below the breakeven point for most farmers. They’ve also dealt with changes in consumer preferences. “We know that customers want to know where their pork is coming from,” Bakken said. “And after the supply chain challenges we saw in 2020, they want to be able to have it in their freezer.”
Bakken’s best advice to farmers facing the same external factors? Actively manage your risk.
PLANNING FOR RISK
When the hail storms became more of a rule than an exception, Bakken decided to work with Compeer Financial to build out a crop insurance plan.
“We usually meet with our insurance officer three or four times a year to review where we’re at and discuss what will work best for us,” Bakken explained. “Our insurance officers are doing their homework, and they know what the best products are going to be for our farm.”
Bakken’s insurance team at Compeer include Krista Blair, crop insurance team leader, and Britney Haugh, crop insurance officer. As a team, they came up with a plan to manage against unknowns.
“My job as an insurance officer is knowing my clients’ operations and helping them make the best risk management decisions possible,” Haugh said.
“In 2019, margins were getting tight, so we needed to protect every bit of that crop,” Blair explained. “We worked with the Bakkens to understand their situation and suggest the best product to meet their goals.”
Bakken Ventures is a multigenerational operation. Bakken’s father, Alan; mother, Bonnie; and kids Brennan (18), Blaine (16), Brielle (13) and Bryant (11) help around the farm. That family connection drives Andy and Jody to preserve their legacy into the future.
“Every one of the kids has taken an interest in the farm and helps — whether it's weaning pigs, power washing or even driving equipment now that they are older,” Andy Bakken shared. “I wouldn’t be surprised if they all want to come back and farm someday."
This article was originally printed in the Winter 2022 edition of Compeer Financial's Cultivate magazine.