Texas AgriLife Extension Service

Types of Risks

There is risk associated with managing any agricultural enterprise. Risk is defined as the chance of injury, damage or loss, often expressed as degress of probability.

Range ecosystems are especially complex, which, when combined with variable weather and markets, increases the risks associated with range management.

For a rangeland enterprise to be financially and ecologically sustainable, landowners must know the risks associated with various management decisions, and make those decisions wisely.

 

Table 1: Major risks associated with rangeland and livestock
production in the United States (Holechek et al. 1998).

Risk Category

Example

Climatic risk

Drought, severe winter

Biological risk

Livestock disease, predation, grasshopper infestation, grazing mistakes, toxic plants, seeding rangeland

Financial risk

Rising interest rates, rising production costs, falling cattle prices, falling land values

Political risk

Rising taxes, increased regulation, higher grazing fees on public lands, elimination of subsidies, increased protection for endangered species, land use restrictions

Other

Fire, theft, vandalism

 

General Risk Management Strategies

Good managers consider both the present and the future, knowing that a decision is irresponsible if it puts them at significant financial risk or threatens the sustainability of resources, either in the current year or in years to come.

Strategic planning is important because we cannot accurately forecast the future. Use strategic planning to guide your decision making. A strategic plan includes contingency provisions, and these are just as important as the specifications for things that are known. Find ways to avoid, reduce or manage risks so that your rangeland operation is sustainable.