Kelvin Leibold, Farm & Ag Business Management Field Specialist, Central and Craig Chase, Farm & Ag Business Management Field Specialist, Northeast
The agricultural industry in Iowa is dominated by commodity production, which is a high volume, low profit margin industry. Narrow profit margins force farm businesses to grow in assets, output, and labor income to remain profitable. Moreover because of narrow margins, the ability to manage production and price risk can be the difference between insolvency and profitability.
To help agricultural producers and agribusiness professionals better understand how marketing and crop insurance products can be integrated into a risk management plan, Iowa State University Extension presented two, one half-day workshops in Waterloo and Nevada. The hands-on workshops utilized laptop computers and spreadsheet tools to emphasize the learning objectives. The workshops started by helping participants calculate break-even cost of production figures for three different case farms, as well as determining ability to bear risk. The participants then began looking at how different marketing strategies and crop insurance products changed revenues over a wide range of prices and yields. The workshop ended with a discussion of how the different combinations of marketing tools and crop insurance products worked for each of the case farms.
An end of the meeting evaluation indicated the program was well received. The 27 participants rated the overall workshop a 4.3 on a 5 point scale with 5 being extremely beneficial. Twenty four attendees would recommend the program to others with 3 unsure of the recommendation.
When asked what they learned and how they plan to use the information, numerous participants stated they better understand how marketing and crop insurance decisions can be integrated into an overall risk management plan and many plan to use this new knowledge with their own farm operation. One farmer from the Waterloo workshop stated that he would put his own data in the spreadsheets the following Monday. About half of the participants were agricultural lenders or crop insurance agents and are likely to use the knowledge gained to help hundreds of farmers make better risk management decisions.
When asked what topics or changes the participants would like to see in the future, some said more detailed information on marketing tools and specific crop insurance products. Additionally one producer would add an hour at the end of the workshop to input their own data.
ISU Extension is helping farmers and agribusiness professionals better understand how marketing tools and crop insurance products can be integrated into an overall risk management plan. With this new knowledge, participants can make informed decisions regarding risk management strategies. If interested in learning more about the risk management workshops, contact Kelvin Leibold at 641-648-4850 ( firstname.lastname@example.org ) or Craig Chase at 319-882-4275 ( email@example.com ).
March 31, 2006
POW 104 - Agricultural Risk and Financial Management
Page last updated:
July 19, 2006
Page maintained by Linda Schultz, firstname.lastname@example.org