HORSCH Live in a new format

HORSCH Live enters the third round – this time with a new format. In 2022, too, HORSCH invites different speakers and guests from various sectors of agriculture to inform and discuss about current topics and events.

But there is something new! For instead of holding all speeches and panel discussions within one week like in the past years, HORSCH now organises an event series that starts with two panel discussions. From the beginning of December 2022 until mid-February 2023, experts hold speeches about different topics. They are broadcasted on Monday evenings on our usual social media platforms. This year the topics are climate changes and our soils under the motto „Balanced soils – Safe yields“.
HORSCH Live started with two live discussions: the topic on November 29, 2022 was “Weather extremes – What do farmers in Central Europe have to expect and what can we do?” and on December 2, 2022 the discussion was about “Cash is King? – What does a farm have to hold available?”

HORSCH Live – the kick-off

The past summer showed once more how the weather can impact agriculture. Extreme weather events more and more frequently cause big problems for farmers all over the world. In the last issue of terraHORSCH we already talked to Dr. Frank Wechsung, who works as a scientist at the Potsdam Institute for Climate Impact Research, about his assumption that persistence’s of the weather conditions will increase and thus for example the duration of high-pressure and low-pressure areas will increase, too, which results in long periods with extreme weather conditions.
In the HORSCH Live panel discussion of November 29, 2022, he talked among others with Dr. Rainer Langer (chairman Vereinigte Hagelversicherung), Carl-Philipp Bartmer (managing director of the arable farm AVG Mücheln), Philipp Horsch (managing director HORSCH Maschinen GmbH) and moderator Michael Braun about the topic “Weather extremes – What do farmers in Central Europe have to expect and what can we do?”
There have always been the weather and extreme weather events. “The weather is part of the climate, i.e. the climate is composed of the weather. Climate results from an average value of approx. 30 weather years. Weather extremes, too, are part of the climate. They mainly occur in the years of the climate change when we notice a shifting from one climate area to another”, says Dr. Frank Wechsung.
However, it is striking that such extreme weather events occur more and more frequently and more and more violently – this was obvious in the past years. In farming, besides the drought in spring, late frosts, too, cause problems. They affect the development of the crops and partly result in big damages. If a period of drought with no rainfall is to follow, big harvest and yield losses partly cannot be avoided. “Drought and high temperatures will definitely be part of the new climate. But it will not end there.“ We can also expect an accumulation of local heavy rainfall and persisting wet periods. Because of all this the farmers in Europe have to face enormous challenges and they worry: How can we prepare for this situation so that we can produce food and continue to secure the nutrition of the population?

Dr. Rainer Langner answer to the question if in the insurance sector we also notice increasing weather extremes is clear: The increase is obvious! However, there are big differences between the countries. In the Baltic States, this year has rather been wet with a lot of storms which caused considerable damage. In the West, it was very dry with drought damages. According to Dr. Langner, it is striking that in Germany drought damages are not insured particularly often. “German farmers mainly insure damages caused by hail, heavy rainfall and storm. There are only a few insurances against drought – I would estimate about 100,000 hectares.“ In Germany, 2022 fortunately was an average year with regard to hail, i.e. there were no considerable damages. “But we know a lot of regions where the damage was enormous, especially for late crops like maize. In Belgium and Luxembourg, too, we had to settle extreme damages, also damages caused by drought.“
The years between 2018 and 2022 were marked by drought, but we also saw intensive weather conditions, e.g. in the Ahr valley. This was the result of an intensive weather condition with a precipitation rate that so far has never been measured before at the local weather stations. In addition, in the past years, damages caused by tornados increased significantly. “This, too, is the result of what probably will hit us even more in the long run”, Dr. Langner predicts.
Philipp Horsch, too, noticed a global increase of very extreme weather conditions in different regions: “Especially South America, the south-western part of Brazil and Paraguay dried out completely. In South Africa, however, it was rather too wet his year.“ In Australia, too, the harvest was damaged because of too much rain.
Persisting dry or wet periods are an enormous challenge for farmers. It is a big task and at the same time an enormous challenge to adapt to both extremes, Philipp Horsch said. Carl-Philipp Bartmer confirms this: „We have to be able to react considerably more flexibly with increased efficiency at the right time. Farming depends on timing. And this now gets a completely new meaning.“ He explained, that more current resp. exacter weather models might help to optimise the farm organisation and to take the appropriate decisions with regard to the current farm processes.
When asked how far into the future it was possible to forecast the weather and when the forecasts started to get rather imprecise, Dr. Wechsung explained that forecasts up to one week worked quite well and that the forecast limit was approx. two weeks. “Everything beyond two weeks actually is difficult.“ But why do climatologists dare to predict the climate change? They cannot exactly say how a winter will turn out, but they can definitely say that it will become warmer. This is the core of the climate model. It is positive that the quality of the weather forecasts improved considerably in the past years. However, they can only be as good as the measuring network. “What people often do not see is that weather models are only one element of the weather forecast. These prognostics are corrected afterwards by using local weather information which come from the weather stations.”
The summary was that the climate is subject to faster changes than the climatologists originally predicted based on the models and the agricultural sector has to prepare for persisting weather periods in the future.
The climate changes and the challenges in farming also include the question how we can continue to feed the growing world population. Carl-Philipp Bartmer thinks that an intensive co-operation with technology, research and breeding is required. The topic of breeding new, adapted varieties is a rather long-term means that cannot be put into practice at short notice, Dr. Langner added. But according to Bartmer it is the variety adaption that is a crucial factor for high-quality crop production, especially with regard to the German agricultural sector. Farmers have to become aware of the fact that these breeders are the big allies when it comes to successfully cope with the climate change. “I consider this as a self-commitment of the farmer to contribute correspondingly so that our breeding, too, remains sustainable and that in the future we can dispose of powerful, adapted varieties.”

Cash is King?

In the past years, the farms had capital at favourable terms at their disposal because of the low interest rate policy. Short-term availabilities and low price fluctuations of the resources also had a positive effect on the liquidity of the farmers. From an economic point of view, however, such a constantly high liquidity was not wise. But last year, quite a few things changed: the prices for resources for agricultural products exploded. Especially the price for fertiliser almost doubled compared to the previous year. Because of the rising prices for resources the liquid assets of the arable farms increased enormously.
In the HORSCH Live panel discussion “Cash is King? – What does a farm have to hold available?”, Deert Rieve (farmer from Mecklenburg-West Pomerania), Felix Hollmann (independent consultant and partner of the LBB GmbH and agricultural economist), Bernd Werzinger (sales manager Deutsche Kreditbank AG and agricultural engineer), Michael Horsch and moderator Matthias Lech (product manager at Farm & Food) discussed how agricultural farms have to prepare for the future to remain liquid and profitable and how strong the influences of the changes in the interest rate policy are on the financing of resources and on the fields of the farms.
Bernd Werzinger, who looks after the whole range of agricultural farms (even wine-growers) explained that his customers are worried by general, but also by very special topics resp. sorrows and troubles. General topics are the general weather situations, changing markets, volatilities and liquidity. “This is true for all sectors. At the same time, there also are quite different problems.“ These different topics partly are very complex as they are farm-specific. This makes his tasks challenging but also interesting. What became clear with regard to farming resp. fluctuating markets last year was that high volatilities require a different liquidity control. If more liquidity is required, we wonder how we can secure it. “There are questions like: What do I get from my own harvest? How much money do I really have in my account? What do I have to do with regard to contracts and how do I face these questions with regard to liquidity? This is an important issue in the farming sector.“