1998 Risk Management Essay Winner

Risk, risk, and more risk. Every day we are exposed to a certain amount of risk. In an emerging world of technology, risk is very debatable, and even more so than the risk itself, the way you manage it. Risk prevention is imperative in order to run an efficient and economical operation.

My subject of risk is a heifer that I recently purchased. I have two goals I am wanting to achieve with her. First, I want her to become a healthy, classy show animal, and secondly, I want her to develop into a mature and productive cow.

I realize that if my heifer dies or can"t produce healthy calves, my net profit has crashed. Therefore I have designed a plan composed of three risk management strategies; self-insure, avoid, and reduce.

My first strategy, self-insure, involves being financially capable of suffering loss. If my heifer dies, I have to start all over again, but I have enough money in savings to do so. I got a super deal on my heifer, and my parents pay for feed in exchange for labor throughout the year. They have already informed me that I will have a lot of summer-fallowing to do this summer!

The first strategy naturally leads into my second, avoid. I must not exceed my debt-to-asset ratio or in other words, I must not spend more money than I intend to make. I will try to save money on supplies and having my feed paid for helps quite a lot.

The third and most broad strategy is reducing risk. I am trying to take all possible precautionary measures. I started out to implement this strategy by selecting my heifer from a local purebred Hereford operation. The operator is a very reliable man. I have seen the results of his cattle and have dealt with him on many occasions. I will try my best to provide adequate shelter and wind break for my heifer. Vaccines are a very important part of reducing risk. My heifer has been Ivomeced, Bangs vaccinated, and treated for lice, in hope of preventing illness. Nutritional status makes all the difference in the world. My heifer must get a balanced diet, for nutritional stresses are the primary cause of failed or poor performance, poor re-breeding, weak unhealthy calves, low milk production, or disease and death. Cows and heifers need adequate protein and energy in their diet, so I"m giving my heifer a pellet feed with a protein and energy supplement. This feed is used to increase weight gain. She will also receive mineral, salt, and plenty of forage.

I believe the three prevention steps that I have included in my risk management program of self-insure, avoid, and reduce are the key to raising a healthy and profitable heifer!!!!!!!

Introduction to Risk Management (USDA Risk Management Agency, September 97)

Publication: Farm and Ranch Guide (page 42A, Farm and Ranch Guide, Friday, January 16, 1998)

Publication: Cattlemen Coping With Winter (EXT NDSU Extension Service)

Management Implication (by Harlan Hughes, Extension Livestock Economist) (EXT NDSU Extension Service)