In the commodities world, such as in pork production, we often associate risk management with protecting income, expense items, or simply “managing the margin” between them. However, a key concept that goes beyond understanding risk management is the “action.”
One can have tremendous resources, knowledge, advisors and even a plan, but if not acted upon, it is useless. I more broadly look at risk management as multi-fold in our business. Yes, one should hedge pork value and production costs when opportunities exist, but there are numerous “other” pieces of our operations that must be protected as well.
Current risks in our industry can be labor stability, health management, disaster preparedness, facility maintenance, environmental management, succession planning, and more. Working in the pork industry is extremely dynamic and rewarding, but the risks are large and sleep is valuable.
ISU Extension and Outreach and IPIC have resources to assist decision-making in all of these aspects.
Consider estate and transition planning. While it can be a tedious and daunting endeavor, the resolve is all about risk management: protecting business continuity, preserving assets and wealth and empowering the next generation of management and/or ownership.
If the US pork industry is to remain competitive and keep our local communities and families thriving, we must be able to effectively plan for an operation's long-term survival.
An excellent resource to assist is the Estate Planning Portal, available through the Center for Ag Law and Taxation (CALT).