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Risk Management Resources for Specialty Crop Producers

Shermain D. Hardesty, Editor

Risk management is an important consideration for specialty crop producers. Besides facing uncertainty in yields, government policies, and foreign markets, producers are subject to considerable market risk in terms of prices, sales volumes, quality requirements and other nonprice factors.

This collection of articles is related to the market risks that specialty crop producers face. Most of the information included was presented at two workshops organized by the University of California's Division of Agriculture and Natural Resources during May and November, 2007 for specialty crop producers.

Assessing Long Term Planning Options

Karen Klonsky, Agricultural and Resource Economics, University of California, Davis
The selection of enterprises for the farm must be made in the context of the overall farm business strategy and long run vision. In addition, the proposed crop should be a reasonable choice for your farm with respect to soil and climate conditions and available resources. The following discussion will focus on permanent crop enterprises, but the basic concepts presented pertain to annual crops as well as livestock enterprises

Managing Risk With Revenue Insurance

Robert Dismukes, Economic Research Service, USDA
Keith H. Coble, Agricultural Economics, Mississippi State University

Crop revenue insurance offers farmers a way to manage revenue variability that results from yield and price risks. Commodity-level revenue insurance, particularly for corn, soybeans, and wheat, has become a major part of the subsidized Federal crop insurance program. Whole-farm revenue insurance, based on combined revenue from all commodities produced on a farm, is a more broad-based approach, but is difficult to administer.

2007 Adjusted Gross Revenue Fact Sheet

USDA - Risk Management Agency
Risk Management Agency Fact Sheet No. 1906. (2 pp.) November 2006.

Agricultural Contracts and Risk Management Contracts

Rachael E. Goodhue, Agricultural and Resource Economics, University of California, Davis
Leo K. Simon, Agricultural and Resource Economics, University of California, Berkeley

A grower's risk management strategy must address a number of types of risk. Agricultural production is risky in a number of ways, including the quantity and quality of production and the costs of essential inputs. Agricultural marketing introduces additional sources of risk. Crop insurance and agricultural contracts are management tools which aid growers in managing production risks.

The Power of Producer Collaboration

Shermain D. Hardesty, Agricultural and Resource Economics, University of California, Davis
Cooperative organizations play an important role in strengthening market access and competitive returns for specialty crop producers. Key economic conditions face specialty crop producers. The cooperative structure is utilized to benefit these producers, with reduced market risk often associated with these benefits.

United Potato Growers Association

Shermain D. Hardesty, Agricultural and Resource Economics, University of California, Davis
In 2005 the United Potato Growers of America (UPGA) was created as a federation of regional cooperatives. As a young organization, UPGA provides a classic demonstration of the power of producer collaboration through the cooperative structure. It is developing strategies and implementing programs to increase and stabilize grower returns.

Making Sustainability Matter

The Hartman Group
Hartman Group is a consulting and consumer insights leader offering a wide range of services and products, specializing in the health and wellness marketplace. "Sustainability" is the marketing buzzword of the year. For consumers, sustainability involves preserving a certain way of life, allowing them the ability to control their surroundings. The dynamics of sustainability in US consumer culture will continue to change and evolve. Through further exploration and understanding, companies can leverage consumer values to tap into consumer desires and emotional aspects of sustainability.

The Emerging Farm Bill and California Agriculture: How is it Shaping Up?

Daniel A. Sumner, University of California Agricultural Issues Center, and Department of Agricultural and Resource Economics, University of California, Davis
Congress has yet to craft a new Farm Bill that will govern food, farm and rural policy in the United States for the next five years or so. The House and Senate versions of the Farm Bill include additional support for several crops, such as sugar, wheat and soybeans as well as some new spending for nutrition, environmental programs, pest protection and R&D, directed towards issues of importance to fruit, vegetable and tree nut industries.

Examing EU Policies Applied to Processing Tomatoes

Bradley J. Rickard, Agribusiness Department, California Polytechnic State University, San Luis Obispo
Daniel A. Sumner, University of California Agricultural Issues Center, and Department of Agricultural and Resource Economics, University of California, Davis

International trade in fruits, vegetables, processed products and other high unit-value products has been expanding rapidly relative to trade in bulk commodities. At the same time, most analysis of the effects of agricultural border measures and domestic support on trade patterns has dealt with bulk commodities with much less analysis of for horticultural products. Here we examine policies applied to the processing tomato industry.

This project was supported with a 2006 Commodity Partnerships for Risk Management Education Program grant to the University of California, Agriculture and Natural Resources from the Risk Management Agency, U.S. Department of Agriculture--Producer Education on Identifying and Managing Market Risks, Agreement No. 06-IE-0831-0207-E.