3 Strategies for Farmers To Better Manage Supply Chain Risks

Many of the agricultural supply chain challenges that began during the COVID-19 pandemic have yet to ease. Rising costs, global geopolitical tensions, an increase in natural disasters, and now tariffs all continue to exacerbate uncertainty on a global scale.

As the supply chain crisis persists into 2026, growers must adapt and build resilience through thoughtful management practices.

SUPPLY CHAIN TRENDS AND ISSUES

The first step for growers is to understand the key issues and trends facing your relevant supply chain. Then, it’s possible to leverage the right tools and strategies to mitigate risks, optimize operations, and maintain a competitive edge.

Current supply chain trends impacting nearly all industries include:

• Nearshoring: A dramatic shift toward nearshoring — outsourcing production of goods or services to a nearby country — is reshaping international trade. For example, in 2023 Mexico surpassed China as the leading importer of goods to the U.S., the AP reported, due to increasing tensions between the U.S. and China and a desire to import from countries in closer proximity.
• Geopolitics: Political changes in the U.S. and around the world are influencing trade dynamics. Soybeans are one example. As of late September, the U.S. soybean harvest began without any soybean orders placed by China, typically the largest buyer of U.S.-grown soybeans. The impact of tariffs and duties has kept U.S. soybean prices higher than South American supplies, and China has been ordering record numbers from Brazil.
• Natural disasters: As extreme weather events, from hurricanes to wildfires, increase in frequency and severity, businesses should expect more climate-related disruptions to the supply chain. According to the U.S. EPA, current climate impacts on agriculture include changes in productivity, an expansion in occurrence and range of insects, erosion and depleted soil nutrients, and even worker health.
• Artificial intelligence (AI): The influence of rapid advancements in AI includes supply chain management and logistics. Global investment in AI for supply chain optimization is expected to rise from its current valuation of $4.5 billion to more than $157 billion by 2033. Integrating AI-based technologies offers opportunities such as dynamic inventory replenishment, predictive analytics and modeling, and data viability and centralization, but it also can bring risks related to cybersecurity and regulatory compliance.

STRATEGIES TO MANAGE RISKS

To protect operational efficiency and gain a competitive edge amid supply chain uncertainty, there are several key strategies that companies can consider:

1. Leverage technology strategically and effectively. Modern AI and predictive analytics tools have extraordinary power to supply and analyze data so that growers can better weather supply chain volatility. For example, growers can use AI tools to monitor potential disruptions, such as in weather fluctuations and to global trade.
2. Diversify sources and plan for resilience. Like many aspects of business, preparation is key. Companies that are particularly vulnerable to supply chain disruptions, such as those that get a specific product or material from just one supplier or sell goods to one source, need backup options if something goes wrong. Organizations can partner with logistics experts to create a well-defined, comprehensive resilience plan that improves their ability to proactively address all potential threats, from a natural disaster to rising geopolitical instability. As the global economy adapts to the recent tariffs, this is poised to be the single largest disruptor to the supply chain and may impact both the import and export of goods across the agricultural sector.
3. Partner with an insurance broker with industry-specific supply chain expertise. Supply chain risks will be better mitigated with an insurance broker that understands both agribusiness and the business’s organizational objectives and can provide a global perspective on relevant issues. An effective insurance partner should be able to provide a customized, holistic approach to supply chain coverage within their sector. An insurance broker with a worldwide network of carrier partners is also essential to negotiating the best rates and coverage options to protect against whatever supply chain challenges may arise.

With supply chain uncertainty persisting, taking a proactive approach is crucial. Leverage the latest tools, create a plan and work side-by-side with your insurance advisor to help navigate these complex policy changes and address uncertainties in the global market.