Risk Management for Christmas Tree Growers

Custom Ag Solutions

Brett Crosby

OSU Tree School

March 24, 2007

Custom Ag Solutions

• Based in Cowley, Wyoming

• Previous Experience

• Focus on Agricultural Finance– Risk Management– Feasibility– Valuation– Technology Applications

• USDA Agency• Created in 1996 to Administer the Federal

Crop Insurance Program• Three Divisions

– Insurance Services– Research & Development – Risk Compliance

• RMA Quick Facts– Over 500 Employees– Ten Regional Offices – Main Offices in Kansas City and Washington, DC

Risk Management Agency (RMA)

RMA’s Vision: To serve America’s agricultural producers through effective, market-based risk management solutions.

RMA’s Mission: Promote, support, and regulate sound risk management solutions to preserve and strengthen the economic stability of America’s agricultural producers.

Risk Management Agency (RMA)

RMA’s Approach:• Partner with Public and Private

Organizations to Develop New Risk Management Programs.

• Partner with Private Insurance Companies to Deliver Risk Management Products (e.g., crop insurance, LRP).

• Partner with Public and Private Organizations to Provide Risk Management Education.

Risk Management Agency (RMA)

RMA’s Risk Management Education– “Informed Customers and Stakeholders.”– 100 Separate Initiatives

• Targeted States

• Outreach Programs

• Commodity Partnerships

Risk Management Education(RME)

Management Decisions

• Resource Availability

• Site Selection• Site Preparation• Planting Stock• Planting Technique• Plantation Protection• Weed Management• Fertility Management

• Irrigation Options• Shaping/Shearing• Insect/Disease Control• Harvesting• Marketing• Starting Over

Risks Faced by Christmas Tree Growers

Every management decision affects a grower’s exposure to one or more of the following risk categories:

– Production Risk– Price Risk– Financial Risk– Legal Risk– Human Risk

Evaluating Your Decisions

The four “Knows” for each management decision:

1. Know the risks associated with each decision

2. Know the anticipated reward of each decision

3. Know the costs of each decision

4. Know the benefits of each decision

The Christmas Tree Risk Analysis Tool

• Model your current operation

• Use the model to evaluate:– Your ability to withstand a price drop – Your ability to meet your financial

obligations at various price levels– The costs and benefits of the practices

used to manage production, human, and legal risks

Contact Information

For Free Risk Management Information and Software Call:

866 847-4578 or Visit

www.ChristmasTreeRiskManagement.com