Farm Management Minute: Do not cut corners |

Farm Management Minute: Do not cut corners

Instructor, Lori Tonak
farm design
Getty Images/iStockphoto | iStockphoto

I hope the title caught your eye! During these times of lowered grain commodity prices, higher land costs and uncertain future livestock markets, every producer is looking at where corners can be cut. I have heard of reduced fertilizer sales from my agronomy friends, as farmers and ranchers are tightening their belts. Livestock producers are looking at ways to decrease their feed costs to make sure they can still make profits in the face of downward trending prices. All of these are good areas to examine. One area, I feel should not cut out of your budgets-estate planning and life insurance.

Some individuals may feel that estate planning and life insurance is taking too much money out of the operation and feel this is an area that can be eliminated for the year, or maybe even a few years. Also, talking of death and a future without us is a hard conversation to have. Maybe a person feels that having a conversation about estate planning/life insurance is like telling God you are ready to go home to heaven. That is not the case! Estate planning and life insurance policies are an assurance that the operation can survive past an individual’s mortality.

What I would really like to stress is that life insurance is not only needed on the main operator, or farm partners, it is also needed on the entire family. In this past two weeks, I have seen obituaries on at least three young people that have passed away unexpectedly. By having life insurance on all members of a family, the financial hardship is eased if a tragedy strikes. Also, by getting a life insurance policy on a child, many times it can be rolled into an adult policy even if there are health issues. Make sure to check with the insurance agent for that potential on the policy.

A spouse that is not involved in the day-to-day operation should also be insured. If the family has been using the off-farm income the spouse may earn for the family living, an insurance policy can help to bridge the gap until a new plan is made. This is also important if the spouse is a stay-at-home farm wife, with young children, as daycare may be needed if something catastrophic happens.

As I said at the beginning, these are not easy conversations to have, but are very important. Take it from me-my mother went to town one day to get a small load of corn and was killed in a car accident on the way home. She was 44 years old. Without her life insurance policy to help pay for unplanned funeral expenses, the farm would have been at great risk.

If any producer would like more information on how the SD Center of Farm and Ranch Management can help your operation, call 1-800-684-1969, email or check out our website at

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