Case Studies on the Use of Crop Insurance in Managing Risk
Gloy, Brent A.; Staehr, A. Edward
Managing the risk associated with farming is challenging. Fortunately, farmers have a variety of risk management tools at their disposal. This series of case studies examines how crop insurance can be used to manage some of the risks faced by farmers. The examples illustrate how crop insurance purchases would impact the returns generated to a farming enterprise. While the examples cover a variety of commodities and insurance products, they do not consider every possible risk that might arise. Likewise, they do not consider all of the possible financial situations that might be experienced by a farmer. Instead, they focus on highlighting how crop insurance impacts the profitability of the farm. Companion spreadsheets are available for all of the examples so that readers can examine a wider range of scenarios than those discussed in the examples. These spreadsheets and other related materials are available for download at: http://www.agfinance.aem.cornell.edu/CropIns.html Cash flow is a very important financial concept. Among other things, cash flows are used to fund personal living expenses and service debt. For a more complete discussion of the role that crop insurance can play in your risk management plan readers are encouraged to examine the following tools and readings.