Another facet of production risk management is the use of crop revenue insurance coverage or hail insurance. We of course suggest this insurance along with the latest in production technology, pest management and cultural practices to maximize yield. Nothing will replace yield. The flip-side of production risk managment is price risk management which is also the hard part for our farmers. I joke and tell them they always use the three step approach - hope, greed and then fear.
Hope is always present at planting time regardless of price.
The farmer has both production hope and price hope. Hope usually lingers until the price starts up, and then greed sets in. Sure enough, planting scares, floods, drought, and uncertain crop size usually make the futures price jump some time during the crop year. Greed is set in concrete. Farmers tend not to sell on an up market.