Foothill Farming
University of California
Foothill Farming

Production Risk

What Is Production Risk?

Production Risk Icon

Anything that directly affects the quantity and quality of your production or  causes variation in expected yield. If you've been farming for even a little while, you are probably well-versed with production risk.

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Some Sources of Production Risk

  • Weather and wildfire
  • Pests and disease
  • Production management - planting, harvesting, food safety
  • Infrastructure (on-farm and off-farm) malfunction

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Some Questions to Ask to Assess Your Production Risk


  • Which of the listed risks affects me by keeping me from getting to my goals?
  • Which can I manage on my own?
  • Which do I need help managing?
  • Which can I avoid?

Production Management:

  • How much benefit might I get from using protected cultivation?
  • Would changing my pest management practices reduce crop losses?
  • How can I minimize food safety issues in my production, harvest and post-harvest handling practices?
  • How can I bring down production costs?


  • Will a new enterprise offer effective diversification?
  • What knowledge and management skills do I need for an extra enterprise?
  • Which extra capital investments and labor would I need to diversify?
  • Do I have a serious commitment to a new enterprise?

Crop Insurance:

  • What are my major sources of production risk?
  • What type of insurance coverage do I need for protection?
  • What coverage is available to me?
  • How much coverage do I need for adequate cash flow?

New Technology Adoption:

  • Does adopting a new technology reduce my risk?
  • What is the economic benefit of adopting new technology?

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Source: USDA Risk Management Agency. "Introduction to Risk Management: Understanding Agricultural Risks." Revised December 1997

This information made available due to a grant from the USDA Risk Management Agency.

Tools for Mitigating and Planning for Production Risk

  • Diversify crops or enterprise
  • Change production methods
  • Use lease arrangements with crop or livestock shares
  • Invest in new technologies
  • Maintain farm infrastructure and equipment
  • Use protected cultivation
  • Stay informed
  • Site selection
  • Get crop insurance
  • Develop a contingency plan

Remember: It's important to choose the tools that are best for you, your level of risk tolerance, and your operation.

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Risk Management Checklist - USDA Risk Management Agency

Crop Insurance Information:
(Note: More information on appropriate crop insurance policies for Placer and Nevada counties coming soon)

Production and Pest Management:


Food Safety Information:

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Additional Production Risk Management Resources

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