NY FarmNet’s Comprehensive
Approach to Risk Management
Ed Staehr
Senior Extension Associate
NY FarmNet/FarmLink Programs
March 31, 2009
Reno, NV
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Who Calls NY FarmNet?
 Farm Families in the process of making
critical changes
 Beginning Farmers
 Farmers preparing to retire
 Farmers exploring new markets or business
opportunities
 Farmers who would like to improve profitability
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Why Farms Call
 Getting started in farming
 Farm transfer
 Business and finances
 Family communication
 Intergenerational conflict
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What to Expect when Calling
NY FarmNet
 A “live voice” who answers calls.
 Speaking with someone who is
knowledgeable about agriculture
 A returned call by a consultant within 24
hours.
 Consultants who are experienced in
working with farmers
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Program Outreach
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How We Help
Free, Confidential On-Farm Consulting
Financial Consultants
Personal/Family Consultants
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Consultant Locations
Family
Financial
Legal
Tax
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Areas of Assistance
Financial Analysis
Business Planning
Farm Transfers
Retirement and Estate Planning
Farming with the Family
Personal Wellbeing
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NY FarmNet Helps Farmers Mitigate Various
Types of Risk
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Human Resource
Legal
Financial
Production
Marketing/Price
Business Risk Management
• Analyzing
the present profitability of farms
• Identifying options for improving farm viability
• Helping create useful cash flow budgets
• Evaluating proposed business changes and
their impact on profitability
• Working with others to provide options for
debt restructuring
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Personal Side of Risk
Management
• Setting Goals
• Conflict Management
• Management Principles
• Conducting Family Meetings
• Business Decision Making
• Time Management
• Farm Succession Planning
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Managing Human Resource
Risk
Risk Management Strategies Suggested by NY
FarmNet:
Develop buy-sell agreements.
Purchase life insurance on management team.
Purchase disability insurance/pay SE tax.
Designate a power of attorney.
Evaluate Health Insurance, Medicare, Medicaid,
State and Federal Programs.
 Develop a business transfer and succession plan.
 Develop an estate plan.
 Improve communication and HR practices.
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Managing Legal Risk
Example Legal Risk Management Strategies:
 Review liability/casualty insurance
policies.
 Adopt a business structure that offers
liability protection (with attorney
assistance).
 Update current legal agreements.
 Get all contracts in writing.
 Review legal risk with an attorney and
insurance agent.
 Improve neighbor relations.
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Managing Financial Risk
Example Financial Risk Management
Strategies:
 Keep accurate records.
 Routinely communicate with your lender
and accountant.
 Plan to meet cash flow requirements.
 Examine industry benchmarks.
 Improve cost control.
 Evaluate alternative investments.
 Evaluate measures to improve
profitability.
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Managing Production Risk
Example Production Risk Management
Strategies:
 Purchase Crop Insurance
 Evaluate yield based vs. revenue based
 Improve Crop Production Practices
 Hybrid/variety selection
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Managing Marketing/Price
Risk
 Forward contract crops.
 Develop a marketing plan.
 Utilize futures/options.
 Market crops/products directly.
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Risk Management Tools for
NY FarmNet Consultants
February 2009
EB 2009-01
Do I Need Crop Insurance?
Self evaluating crop insurance as a risk
management tool in New York State
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Tools, Continued
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For More Information
http://www.nyfarmnet.org
http://www.nyfarmlink.org
(800)547-3276
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