Risk Management for Christmas Tree Growers Custom Ag Solutions Brett Crosby OSU Tree School March 24, 2007

Custom Ag Solutions Based in Cowley, Wyoming Previous Experience Focus on Agricultural Finance –Risk Management –Feasibility –Valuation –Technology Applications

USDA Agency Created in 1996 to Administer the Federal Crop Insurance Program Three Divisions –Insurance Services –Research & Development –Risk Compliance RMA Quick Facts –Over 500 Employees –Ten Regional Offices –Main Offices in Kansas City and Washington, DC Risk Management Agency (RMA)

RMA’s Vision: To serve America’s agricultural producers through effective, market- based risk management solutions. RMA’s Mission: Promote, support, and regulate sound risk management solutions to preserve and strengthen the economic stability of America’s agricultural producers. Risk Management Agency (RMA)

RMA’s Approach: Partner with Public and Private Organizations to Develop New Risk Management Programs. Partner with Private Insurance Companies to Deliver Risk Management Products (e.g., crop insurance, LRP). Partner with Public and Private Organizations to Provide Risk Management Education. Risk Management Agency (RMA)

RMA’s Risk Management Education –“Informed Customers and Stakeholders.” –100 Separate Initiatives Targeted States Outreach Programs Commodity Partnerships Risk Management Education (RME)

Management Decisions Resource Availability Site Selection Site Preparation Planting Stock Planting Technique Plantation Protection Weed Management Fertility Management Irrigation Options Shaping/Shearing Insect/Disease Control Harvesting Marketing Starting Over

Risks Faced by Christmas Tree Growers Every management decision affects a grower’s exposure to one or more of the following risk categories: –Production Risk –Price Risk –Financial Risk –Legal Risk –Human Risk

Evaluating Your Decisions The four “Knows” for each management decision: 1.Know the risks associated with each decision 2.Know the anticipated reward of each decision 3.Know the costs of each decision 4.Know the benefits of each decision

The Christmas Tree Risk Analysis Tool Model your current operation Use the model to evaluate: –Your ability to withstand a price drop –Your ability to meet your financial obligations at various price levels –The costs and benefits of the practices used to manage production, human, and legal risks

Contact Information For Free Risk Management Information and Software Call: or Visit