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3. 2011 Extension Risk Management Education National Conference

A Comprehensive Financial and Risk Management Solution for Beginning Farmers and Ranchers – A Farm Level Approach

Peter Zimmel

Summary

What does it mean to be a beginning farmer or rancher? According to USDA, a beginning farm or ranch is one that is “operated by one or more operators who have 10 years or less of experience operating a farm or ranch”. With that definition in mind, how does one possibly start farming in this day and age with the high cost of land, inputs, machinery and limited access to capital? The Food and Agricultural Policy Research Institute (FAPRI), with support from the Beginning Farmer and Rancher Development Program of the National Institute of Food and Agriculture (USDA), is currently beginning the second year of a three year grant.
Using a farm level approach, four panels of beginning farmers and ranchers (4-7 per panel) were organized by local extension specialists. A total of 23 producers make up the four panels. For each panel, data was collected to build a farm that was representative of the group. The farm was simulated for 8 years and financial statements and summary statistics were shared with the panels. Then the panels had the ability to simulate what-if scenarios to see if changes they were thinking of making would have a positive or negative impact on the representative farm.
Our presentation will focus on providing insight into the risk management decision support tools and farm level analysis that have resulted from this project. Additional discussion will focus on web-based tools currently under design.

Details

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