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Introduction to Risk Management on Your Farm

When you’re a business person farming you know that you’re not in a riskless business. Risk is a four letter word but there are many things that can assist you in managing these risks.

There are 5 pillars of risk which you need to understand in order to successfully manage your farm business. You need to be able to understand them both separately and together. The 5 Pillars of risk on your farm are:

1. Market Risk;

2. Legal Risk;

3. Human Resource Risk;

4. Financial Risk; and

5. Production Risk

Warren Buffet once said that when making a decision with regards to your business, you shouldn’t be asking yourself how much money you can make,  but instead you should ask how much money you can lose. This change in mindset is important when evaluating the risk on your farm business.
This is an introduction video for the “5 Pillars of Risk Management”series. Watch Reg Shandro explain what risk management is and what you can do to minimize risk in your agricultural business.

For further introductory notes, please refer to the following resources:

OECD: Risk Management in Agriculture

Managing Risk in Agriculture: A Holistic Approach

Managing Risk in Agriculture (Purdue University)
This workshop was funded in part by the Agriculture & Food Council of Alberta

 

How to Boost Your Farm Business with an All-Star Advisory Team

Do you want a huge boost to your farm operation? Here’s a great tip: get all of your agriculture advisory professionals together in a meeting to share their oprinions and strategies for your farm business.

This means getting your accountant, banker, insurance agent, investment advisor, vet, lawyer and so on, together at the table. We know this is pricey but there’s tremendous value a meeting like this could have for your farm business.
Reg Shandro explains why it’s important to have an advisory team for your farm business operation.

This workshop was funded in part by the Agriculture & Food Council of Alberta

 

Pre-Planning Grain Sales: Some Basics on Forward Contracting

Risk management is all about planning ahead.  And that’s exactly what Kent Ploszspecializes in. If you’re not familiar with forward contracting, or DDCs, this video is a great place to start.

Forwarding contracting, also know in the grain industry as Deferred Delivery Contract (DDC) allows farmers to agree with a grain company ahead of time, that they will deliver a quantifiable amount of grain in return for a specified sum of money at a future date. This is a smart risk management strategy, that farm businesses should definitely be aware of, and look into.

This workshop was funded in part by the Agriculture & Food Council of Alberta

 

For further resources, check out these Important Topics for Successful Grain Marketing, from Farms.com Market School.