Risk Management Challenges and Opportunities in 2010

In 2009, agriculture was impacted by significant volatility in commodity and input prices and major world economic events. The world economy continued to flounder, resulting in reduced demand for agricultural commodities, particularly livestock products. The H1N1 outbreak further exacerbated the situation as consumers around the world reduced their consumption of pork. In the last quarter of 2009, unemployment in the United States reached ten percent and continues to rise each month, albeit at a slower rate. In recent reports economic analysts contend the reported figures underestimate the actual unemployment, and that we will continue to face ten percent or more unemployment through 2010.

North Central Risk Management Education Center

The North Central Risk Management Education Center has been providing program coordination for extension risk management education in the North Central Region since 2001. During this time, nearly five million dollars has been awarded to public, private and non-profit entities to carry out producer-focused, results-based risk management education programs. The North Central Region includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, North Dakota, South Dakota and Wisconsin.

Weather Derivatives as a Potential Risk Management Tool for Irrigators

Irrigators in the Republican Basin and in parts of the North Platte Basin must learn to incorporate multiple year drought risk into their management plans, as they adapt to the limitations imposed by five-year pumping allocations. A major concern involves the implications of being water-short during the later years of the allocation period, because of an accumulative rainfall shortage or drought. Currently, producers can either ignore the risk of substantially lower incomes if their allocation is exhausted too soon, or reduce the risk by using less water early in the allocation period. The latter approach, however, may substantially reduce the present value of total net income over the five-year period. Alternatively, in the future it may be possible to use weather derivatives to manage income risk.

Wildlife Risk Management at Vancouver International Airport

The Vancouver International Airport (YVR) is the second busiest airport in Canada. YVR is located on Sea Island in the Fraser River Estuary - a world-class wintering and staging area for hundreds of thousands of migratory birds. The Fraser Delta supports Canada’s largest wintering populations of waterfowl, shorebirds, and raptors. The large number of aircraft movements and the presence of many birds near YVR pose a wide range of considerable aviation safety hazards. Until the late 1980s when a full-time Wildlife Control Program (WCP) was initiated, YVR had the highest number of bird strikes of any Canadian commercial airport. Although the risks of bird strikes associated with the operation of YVR are generally well known by airport managers, and a number of risk assessments have been conducted associated with the Sea Island Conservation Area, no quantitative assessment of risks of bird strikes has been conducted for airport operations at YVR. Because the goal of all airports is to operate safely, an airport wildlife management program strives to reduce the risk of bird strikes. A risk assessment establishes the current risk of strikes, which can be used as a benchmark to focus wildlife control activities and to assess the effectiveness of the program in reducing bird strike risks. A quantitative risk assessment also documents the process and information used in assessing risk and allows the assessment to be repeated in the future in order to measure the change in risk over time in an objective and comparative manner. This study was undertaken to comply with new Canadian legislation expected to take effect in 2006 requiring airports in Canada to conduct a risk assessment and develop a wildlife management plan. Although YVR has had a management plan for many years, it took this opportunity to update the plan and conduct a risk assessment.