Insuring the energy future of the family farm

One of the hardest parts of ranching or farming a multi-generational agricultural entity is the constant knawing sensation that a perfect storm of weather problems and low livestock or crop prices may stress the operation to the point that the bank won’t even offer an operating loan. Rural Montanans know that feeling or know someone who does.

When there is a perfect storm of good news, the bank gets paid off and if there is anything left over, you might buy that truck you’re badly in need of or the neighbors tractor or cow when they’re forced to auction the farm off; because he or she couldn’t hold on, even in a “good” year.

Most farmers and ranchers are also “insurance poor”. By that I mean that a lot of their income each year goes to buy insurance on health, land, buildings, vehicles and equipment. The total Insurance dollar number is shocking when it lines up against profit and most of that expense seems to vaporize forever. There is one form of insurance that does offer a payback and helps to take the gamble out of agricultural living.

How would you like to be able to lock your electricity prices in at $.06 a killowatt for the next 25 years and free after that?

We are all aware of and maybe a little nervous about the recent trends and happenings in Montana’s electricity market. We love the idea of “buying back the dams” but know that the ratepayer will be paying the $900 million pricetag. We’ve already seen considerable rate increases due to the dams purchase and repairs to existing infrastructure with more to come.

All this causes some uncertainty as to what energy costs may do to the long term cost of overhead to run the family farm. When you buy a cow, you can calculate roughly what that cow may bring back to the farm in the years to come. You know the average age of your old cows you’ve gotten rid of. You know how many dry cows you typically have in a year. You know something about a cows genetics so you can give it your best guess as to what size calf she might bring in in the fall. There are still a lot of what-ifs and veterinary bills and chance poachers and predator attacks, but you are willing to take the chance and feel like it will pay off.

In comparison, consider this: You could install a Solar energy system at a fixed, onetime cost that has a warranty period of 25 years and an expected life of 50 years with little or no maintenance expense. A solar system that locks your energy costs for whatever size system you install at $.06 per killowatt for the warranty period and free for the rest of the life of the system. This is insurance that gives back in a big way.

If you haven’t had an energy assessment done by a certified solar installer in the last couple of years, you really should consider looking into it. I think you’d be surprised at the great opportunity for long term investment in the energy security of your family farm by hedging against inevitably higher energy costs down the road.

By Mary Hamilton, Retired Co-owner: Solar Plexus LLC Missoula MT.