Developing A Risk Management Plan Welcome To 制定风险管理计划欢迎到.pptVIP

Developing A Risk Management Plan Paul E. Patterson and Larry D. Makus Develop A Farm Plan A farm plan is the umbrella under which other plans reside Risk management is a component of each plan, not a separate plan A Farm Plan Includes: Goals objectives Land use plan Crop plan Livestock plan Resource inventory Financial statement Budgets Income statement Supporting data Planned vs Actual Plans and decisions are made based on expectations Evaluation should compare actual to expectations Risk Risk is the possibility that an outcome or event will not meet planned expectations Risk Management Risk management integrates production, marketing financial decisions Risk management is a planning process where you assemble and assess information Every management decision carries risk management implications Risk Management Requires Understanding of Your financial situation Understanding sources of risk and potential risk Understanding of risk management tools Risk Management Includes: Evaluation of alternative plans risk management strategies Implementation of the plan Monitoring the plan Developing probabilities to formalize risk assessment  Probability Probability is the chance orfrequency of an event Probabilities quantify the chance of an event occurring Probability What is the probability that soft white wheat at Portland will be under $4? What is the probability that your wheat yield will be below your 10-year average? Probability Cumulative Probability Risk Assessment Assess your risk bearing capacity How much risk can you tolerate? How much risk protection can you afford? How much risk are you willing to accept Managing Production Risk Crop selection Enterprise diversification Spatial dispersion Cultural practices Preventative maintenance Risk Reducing technology Insurance Managing Price Risk Multiple sales Contracts Hedging Market outlook Managing Revenue Risk Income Protection: USDA, RMA Crop Revenue Coverage: private IP and CR