Irrigation is a risk management tool to reduce production losses due to drought and, in many cases, loss due to freeze damage. To deal with market risk develop budgets to determine break-even prices for fruit. The break-even price should serve as an important reference, even though it is usually not the desired price. Marketing tools include forward contracts, selling through a pool or participation program, hedging, options, and spreading sales over time. A good set of financial records are needed to maintain financial control of the business.
Records provide much of the information needed to understand critical financial risk .
Essential financial statements include the balance sheet and statement of owner's equity, income statements, and projected and actual cash flows. These records give a history of the business and provide data needed to calculate financial performance measures. Keep up to date with new technologies to minimize the possibility that new investments are prematurely obsolete. Legal risk involves examining the legal structure of the business to see if assets other than business assets are exposed to liability. Secure competent advice on tax planning to ensure that tax laws are being followed and that only the required amount of taxes are being paid.