In agriculture, there are a number of risks that you have to analyze and manage  —  risk of weather, markets and production. With market risks, however, there are a number of ways to manage and reduce some of that, says Jeff Geider, Texas Christian University’s Ranch Management Program professor.

  • Conduct detailed enterprise budgeting.
  • Know your cost of production.
  • Observe seasonal and historical price trends.
  • Examine price relationships between different industry segments.
  • Consider forward pricing or contracting, not just for livestock, but feed, as well.
  • Use futures or options to mitigate or transfer risk.
  • Consider using value-based marketing to capture market premiums.
  • Consider commingling production with other like producers to increase numbers and uniformity.
  • Use diversification and multiple marketing times to spread out some of the risk.