1. A Whole Farm Approach to Risk Management for
Hog Producers
Eric Olson

2. Discussion What is Risk Management ? Back Ground Why?
Strategy for your Farm

3. Definitions
Entrepreneur – A person who starts a business and is willing to risk loss in order to make money
Risk – Possibility of a Loss
Management – Act or skill of controlling and making decisions about a business

4. Traditional Focus Production Pigs/sow Feed Conversion Bio-security
Grow it and it will work out

5. Five years of Change Understanding Changes in the Industry
Predictability
Unpredictable Events/Trends
US Dollar
MCOOL
Ethanol
H1N1
Drought

6. Strategy Need a Goal – Target Know your Cost of production
Know your Cash needs
Plan ahead

7. Strategy
Protect Margin
Make Active Management Decisions

8. Marketing Outlook Next 12 Month Outlook – Average Prices
Revenue $162.52
Feed Cost $102.23
Fixed Costs $
Margin $
Depreciation $

9. Information
Information Fruit
World is Small

10. Information is KING Right Information Hog Prices Grain Markets
Political Trends
Currency Outlook
Need to Understand
Why prices are where they are today
Where they are going

11. Risk Management Historical success in cash market
Not necessarily a predictor for future success
Market offering a profit

12. Conclusion
Each producer needs to manage risk according to their own farm situation
Make a Goal for your farm
Know your cost of production, ability to make informed marketing decisions
No action is a decision
MARGIN - Locking in forward prices on hog prices should be matched with contracts on feed, etc.
MAKE ACTIVE MANAGEMENT DECISIONS

13. Thank-you!
Questions?