While it's convenient to classify risks into separate categories one should recognize that many of the risks are interrelated. Fire, theft and other casualties are also sources of production risk. Some risk management strategies that can lower production risk include diversification and crop insurance. One can diversify by growing more than one variety of fruit and utilizing more than one rootstock, having groves located in more than one geographical area, and producing both fresh and processed fruit. Crop insurance is available for fruit and in some pilot counties coverage is also available for trees.
Market risk is the random variability inherent in a farm's production process.
Unanticipated forces, such as weather or government action can lead to dramatic changes in fruit prices. As agriculture moves towards a more global market, these forces come increasingly from world factors. Managing market risk begins with a marketing plan. The goals of your business should drive the marketing plan. There may be times when the market price fails to cover all of the costs associated with production.