Despite one of the worst Midwest blizzards in 30 years, more than 425 farmers and agribusiness leaders gathered in Chicago last week for the third annual DTN-Progressive Farmer's Ag Summit. The turbulence we were discussing wasn't due to snow drifts on Interstate 80, it was stomach churning swings in weather, commodity prices, government policy, fertilizer and fuel prices that marked crop year 2009 and will mean more disparity between the haves and have nots when this year's profits are tallied. Consider some of the speakers' highlights:

Hope isn't a strategy for managing risks, reminded Allan Gray, director of Purdue University's Center for Food and Agriculture. Yet a minority of farmers regularly use management tools like options or futures (18 to 35 percent, with bigger farmers using them more often), and only 53 to 74 percent even forward price their production (again tilting in favor of bigger operators).

Even then, commodity markets don't always offer profit opportunities: The 26-month fallout in the pork sector is the "longest period of negative returns in hogs since the early 1980s," he noted, requiring operators to dig deep into their working capital and lifetime equity

Higher input costs--up about 85 percent for corn growers in 2009 vs. the previous five-year average--actually expose growers to more risk than ever, he added. Farm safety nets like Counter Cyclical Payments and target prices actually do little to buffer losses today, since they haven't kept pace with higher breakeven costs, he stressed. "The government program used to do a great job of taking care of us when prices were low, but not today," Gray said. "Programs didn't go away, they're just not very effective."

All farm lenders are beginning to absorb loan losses now, and that will make them more cautious credit providers in the year ahead, warned Donnie Winters, CEO of Farm Credit Services of Mid-America in Louisville. Pure grain operations haven't been impacted much yet, but livestock operations are in a different world, he said.

Going forward, lenders won't just size up your risk in simple total debt-to-total asset ratios, Winters said. Instead, they'll dwell on debt-to-income measures like debt per cow, sow or tillable acre to assess your long-term survivability. Some dairies have accumulated losses of over $7,000 or more per cow, for example. They'll be challenged to compete with those with more normal $3,000 per cow debts. On the other hand, those now buying bankrupt ethanol plants at 95 cents-per gallon capacity should have a leg up on the bulk of plants that are operating at $1.50 per gallon debt. For some second owners, the lower investment costs offer real competitiveness.

Climate changes are likely to continue to torment Grain Belt growers with more extreme weather patterns that could encourage pests and impact yields, observed Jerry Hatfield, director of the Agricultural Research Service's Ames, Iowa laboratory and a Nobel Peace Prize contributor. He foresees a period of wetter springs and more intense but infrequent rainfall. Those storm patterns mean farmers need to defend their top soil with more stover and biomass. But there are fringe benefits to building organic matter: Adding 1 percent organic matter to Iowa soils increased corn yields 16 bu. per acre, or about $64 an acre per year. "That's more than the price of carbon," he said.

Farming isn't all about money; sometimes it's just a reminder that businessmen need to exercise their conscience as well as their wallets. Farmer-philanthropist Howard Buffett, son of Berkshire-Hathaway Chairman Warren Buffett, uses autosteer and SWATH technology on his Illinois farm like the best U.S. farm operator. But solving Africa's food insecurity will require more than high technology, he told the crowd. "The strategy should not be to take the poorest people in the world and hook them on fossil fuel technology they can't afford," he said.

Instead, his foundation has already given away $150 million to improve seed and farming techniques for small stakeholders, usually women farming one or two acre plots. They aren't focused on yields, he says, they focus on a diversified crop mix so that if one fails, they have enough food to last until the next harvest. "These people don't have a recession, because they don't have a possession to lose," he said.

Buffett could have been spending Christmas in Palm Beach or playing golf, living the life of the idle rich. He could have simply written a check to his favorite charities. Instead he was headed for an African civil war zone, where hungry people really needed him, putting body on soul on the line.

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