North Central Extension Risk Management Education Center

Managing through the current economic challenges and accumulating shocks in ag sector will be a major challenge for farmers and ranchers. Educating producers to manage these risks and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program

North Central Extension Risk Management Education Center

After several years of growing agricultural prosperity and U.S. net farm income that peaked at almost $124 billion in 2013, the most recent forecast from UDSA\u27s Economic Research Service projects net farm income at less than$70 billion for 2019. The six-year cumulative decline since 2013 is primarily due to a drop in commodity prices, a result of growing supplies, and more recently, trade conflicts and declining exports for key commodities. While the aggregate financial position of U.S. agriculture remains relatively strong with an aggregate debt-asset ratio of less than 14% (USDA-ERS, 2019), total debt has grown while profit margins have shrunk, putting more pressure on management decisions and putting more operations at financial risk. Managing tighter profit margins and the underlying production, market, and financial risks will be a critical part of working through the current economic environment. Legal risks and human risks, whether from changing farm programs, trade polices, or regulatory requirements or from the continued aging of the farm population and growing transition needs, must also be addressed. Educating producers to manage these risks and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program

North Central Extension Risk Management Education Center

After several years of growing agricultural prosperity and U.S. net farm income that peaked at almost $124 billion in 2013, the most recent forecast from UDSA\u27s Economic Research Service projects net farm income at less than$70 billion for 2019. The six-year cumulative decline since 2013 is primarily due to a drop in commodity prices, a result of growing supplies, and more recently, trade conflicts and declining exports for key commodities. While the aggregate financial position of U.S. agriculture remains relatively strong with an aggregate debt-asset ratio of less than 14% (USDA-ERS, 2019), total debt has grown while profit margins have shrunk, putting more pressure on management decisions and putting more operations at financial risk. Managing tighter profit margins and the underlying production, market, and financial risks will be a critical part of working through the current economic environment. Legal risks and human risks, whether from changing farm programs, trade polices, or regulatory requirements or from the continued aging of the farm population and growing transition needs, must also be addressed. Educating producers to manage these risks and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program

North Central Extension Risk Management Education Center Helps Producers Manage Risks

Farmers and ranchers face many risks and challenges in production agriculture every day. Changing market fundamentals, farm policy reforms, and crop insurance program developments defined the risk environment that led to the authorization of agricultural risk management education as part of the Agricultural Risk Protection Act of 2000. The educational efforts that have followed have been designed to help producers manage the full range of production, marketing, financial, legal, and human risks that are all part of agriculture. In the more than two decades since, the risks facing producers have continued to grow. Producers managed through both the opportunities of the bioenergy and agricultural commodity boom cycle and the economic challenges of the Great Recession in the late 2000s. They then coped with drought losses in 2012, storms and flooding extremes in 2019, and more storm, drought, and wildfire losses since. To top it off, everyone has had to manage through the challenges and market shocks of trade conflicts since 2018, COVID disruptions since 2020, and now the global supply shocks and security concerns of the ongoing Russia- Ukraine conflict. Add in other market shocks and volatility, policy changes, and supply chain disruptions and producers have had to manage a wide range of risks. A substantial market rally for many commodities since 2020 has provided for a strong farm economic outlook at present, but risks and uncertainty remain high, and managing those risks will continue to be a major challenge for farmers and ranchers. Educating producers to manage risk and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program

The North Central Extension Risk Management Education Center, Part III: Outcomes and Impacts

The North Central Extension Risk Management Education (ERME) Center has existed since 2001 to help support producer-focused agricultural risk management education across the twelve-state North Central Region. The Center works together with centers in other regions of the country to implement a comprehensive program of needs assessment, regional grantmaking, capacity building, and evaluation and reporting to support projects that help producers manage risk and document the outcomes and impacts of those projects. The last two Cornhusker Economics articles have described the Center and its activities and have highlighted the successes of some recently funded projects. This article concludes the discussion with a focus on the outcomes and impacts of the funded projects and the overall risk management education program. The focus on outcomes is a core principle of the Center’s regional competitive grants program. In fact, grant applicants are required to identify expected outcomes of the proposed educational projects as part of the application process. Unlike research projects where the expected outcome may not be known, these educational projects are focused on reaching producers with information, tools, and training that will help them achieve intended outcomes across the level of understand, develop, and implement

North Central Extension Risk Management Education Center

Average United States net farm income from 2004 to 2011 was more than $77 billion, the most profitable period in real dollar terms since 1972-1975 (United States Department of Agriculture (USDA) Economic Research Service (ERS)). Farm balance sheets are at the strongest levels since the USDA started tracking data in 1960 (USDA-ERS), and farmland values have grown exponentially, with U.S. average farmland values rising more than eight percent per year in the 2004-2011 period (USDA National Agricultural Statistics Service)

North Central Extension Risk Management Education

After peaking over $123 billion in 2013, U.S. net farm income fell to$68 billion in 2016 with projections of $62 billion for 2017, a nearly 50% drop (USDA Economic Research Service). The large drop from 2013 to 2017 after nearly a decade of strong growth in agricultural income presents a substantial challenge to agricultural producers and an increased need to manage risk on the farm or ranch carefully

North Central Extension Risk Management Education Center

Managing through the current economic challenges and accumulating shocks in ag sector will be a major challenge for farmers and ranchers. Educating producers to manage these risks and position their farm or ranch for future growth and success is the fundamental purpose of the Extension Risk Management Education (ERME) program

North Central Extension Risk Management Education Center

After several years of growing agricultural prosperity and United States net farm income that peaked at $124 billion in 2013, the most recent forecast from UDSA’s Economic Research Service projects net farm income at less than$60 billion for 2018. The drop of more than 50% since 2013 is primarily due to a decline in commodity prices, presenting significant challenges for agricultural producers. While the aggregate financial position of U.S. agriculture remains relatively strong with a debt-asset ratio of less than 13% (USDA-ERS, 2018), total debt has grown while profit margins have shrunk, putting more pressure on management decisions and putting more operations at financial risk