History
In this year, the stock market crashed, leading to the Great Depression--an example of a Financial Risk causing loss.
What is 1929?
This term refers to the annual rate charged by a lender to a borrower for the use of borrowed funds, typically expressed as a percentage.
What is Interest Rate
These fluctuate often, causing further risk to the financial investments of agriculturists.
What are Market Prices?
This risk management approach involves maintaining a financial cushion or emergency fund to cover unexpected expenses or revenue shortfalls.
What are savings or financial reserves?
Buy a new cow
Roll the dice
Even- the cow lives
Odd- the cow dies
The US took a big risk in buying this area of land, costing them $15,000,000
The Louisiana Territory
What term refers to the money you owe on a loan or credit card, including both the principal amount borrowed and any accrued interest?
What is Debt?
These can also have an effect on the productivity of land and agricultural operations, and can completely wipe out entire crops.
What is disease/pests?
Farmers can participate in these programs to protect against losses caused by natural disasters or yield reductions.
What is crop insurance?
Buy a new Truck
Roll the dice:
1 or 2 the truck becomes a collector's piece and you make money. ($200,000)
3 or 4 the truck depreciates, and you net zero
5 or 6, you wreck the truck and loose it all.
Investment in a specific crop led Central American countries to this PANIC in the late-nineteenth and early twentieth centuries.
What is the BANANA PANIC!!!!!!?
This term describes a plan for how you will spend your money over a specific period, usually a month or a year.
What is a Budget?
While investing in these is a risk, it is often essential to the efficiency of agricultural operations. Investment in this non-current asset can be expensive, but is required.
What is equipment?
Farmers can implement these practices to minimize the risk of crop loss due to pests and diseases while reducing reliance on chemical inputs.
What is Integrated Pest Management (IPM)?
Buy a Combine
Roll the Dice:
1 or 2: you use the combine for the remainder of its useful life. It depreciates, and you net zero.
3 or 4: you are able to use the combine during a record year of productivity. You make that money back.
5 or 6: the combine breaks down, and as it is a new combine you do not have the tech necessary to fix it. It is rendered useless, or you have to spend more than you bought it for on fixing it. You loose money.
The US Gov. invested this many dollars in support for struggling citizens during the Covid-19 Pandemic
What is $814 Billion.
This term refers to a sustained increase in the general price level of goods and services in an economy over a period of time.
What is inflation?
A type of financial risk happens when a disruption in this, such as transportation bottlenecks or labor shortages, leading to increased expenses or lost revenues for farmers.
What is the supply chain?
This risk management method involves forming partnerships with other agricultural producers to jointly market products, share resources, and reduce operational costs.
What is forming a farming cooperative or collaborative network?
Buy a Business
Roll the Dice:
1: the business becomes a hobby, and you only make as much money as you spend.
2, 3, or 4: the business fails, and you sell it to another person. You make half as much money as you would have if it would have been successful.
5: after a few months, you file for bankruptcy. You loose half of what you spent.
6: the product you are selling has harmed somebody, and that person sues. You loose everything.
What crisis was caused due to land and commodity booms and busts?
What is the Farm Crisis?
This term refers profit minus liability.
What is Equity, Net Income
Possibility of unexpected increases in these costs, such as fuel, fertilizer, and seeds, can cause a risk to producers.
What are input costs?
This risk management strategy involves producing a diverse set of crops or livestock produced on a farm to spread the impact of production risk.
What is diversification?
You Go Gambling
Roll the Dice:
1, 3, 4, or 5: you loose everything you gambled.
2 or 6: you strike it rich and double what you invested.