1/16/97

Contacts:
John Miranowski, Economics, 515/294-6741
C. Phillip Baumel, Economics, 515/294-6263
Susan Anderson, Agriculture Information, 515/294-0705

NEW RISK MANAGEMENT PUBLICATION TARGETS FARMERS

AMES, Iowa -- Farmers operate in an increasingly dynamic environment. To help farmers deal with the changes and opportunities, the Iowa State University economics department has developed a new publication on risk management.

The report is titled Managing Change-Managing Risk: A Primer for Agriculture. It examines changes in the agriculture industry that are impacting the risks for farmers. And it offers a wealth of information on strategies farmers can use to better manage the risks.

John Miranowski, economics department chair, says there are several reasons for the increasing risks. "For instance, the new farm bill is shifting income risk from the federal government to the farmer," he says. "Added to that are changing global trade patterns and grain reserve policies, plus changing climate patterns, which all translate into greater price volatility."

Miranowski says the good news is there are instruments now available or in development that farmers can use to manage risk. This new publication outlines those instruments.

There are 13 articles authored by the economics faculty. Several articles offer grain farmers insight into the use of contracts, options and futures. Another deals with concerns that can arise when producing grains for speciality markets.

Crop insurance and revenue insurance choices are outlined. Two articles geared to cattle and hog producers discuss price risk management, input prices and production contracts.

Some risk management strategies may actually increase risk if not properly employed, a topic dealt with in one article. Another uses charts to illustrate the impact of various risk management tools.

The book is available at a cost of $4 through ISU Extension Publications. To order by mail, send a check, made out to Iowa State University, to C. Phillip Baumel, Department of Economics, 460 Heady Hall, Iowa State University, Ames, IA 50011.

Editor's note: Papers from this report may be reprinted without permission, but please credit this report. Besides the two authors listed at the beginning of this release, other authors and phone numbers are:

Bruce Babcock, 515/294-5764
William Edwards, 515/294-6161
Roger Ginder, 515/294-6260
Dermot Hayes, 515/294-6185
Robert Jolly, 515/294-6267
John Lawrence, 515/294-6290
Sergio Lence, 515/294-8960
Robert Wisner, 515/294-6310

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