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Common Ground
Farm Credit Services of America Blog

Educational Tool Teaches FFA Students Smart Risk Management

by Rod Hartwig, Financial Officer - Harlan, Iowa | Feb 18, 2014

Wise farmers like to pose a question that goes to the importance of risk management: Would you rather be lucky or smart?

The Farm Risk Management Tool ensures high school students know the correct answer long before they strike out on their own in farming and ranching.

National FFA week, which runs through Feb. 22, offers an opportunity to highlight how agriculture instructors and FFA chapters use this management tool and a curriculum tailored for instructors to prepare the next generation to be smart producers.

demo accountsThe Farm Risk Management Tool, built by a Nebraska-based company called GrainBridge, is offered to all FFA chapters in Iowa, Nebraska, South Dakota and Wyoming at no cost through Farm Credit Services of America. We have nearly 490 FFA chapters serving more than 24,000 students in our four-state area. The Farm Risk Management Tool currently is used by 167 chapters, including by Sara DeBour’s in north-central Iowa.

Sara’s students in Dumont, Hampton and Latimer are heavily involved in row crop farming. But Sara knows that they need more to succeed: They need the know-how to market what they grow. The Farm Risk Management Tool -- created and modeled on the same GrainBridge software used by producers --  gives students hands-on experience in planning and managing crops. It also allows students to run what-if analyses and evaluate risks based on a simulated farm.

Each of Sara’s students has his or her own account based on their family operations or the test plot at school. The tool then lets the students experience the challenges of planning their crop, understanding production costs and identifying their break-even points. Students use the program throughout the year, mirroring the seasonal decision-making required of producers.

“I like that we can store information in the program and then sell on the actual day that (a specific commodity) is trading,” Sara says.

 “It makes students see the real -world application of grain management, using 21st century skills to carry out their tasks.”

By the time they complete the curriculum, the students know what goes into a grain marketing plan and experience how every decision – whether to buy crop insurance, utilize futures, sell on a particular day -- impacts the bottom line.

They also learn that they can’t leave anything to luck.

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