| | Risk | Defined | Sources | Management Controls |
| | Production | Uncontrollable events such as weather, pests, or disease make yields unpredictable. Changing technology makes a manager or capital obsolescent. Inputs are unavailable or low quality | Weather, extreme temperatures, pests, disease, technology, genetics, inputs (availability, quality, price), equipment failure, labor, … | Diversification, insurance (crop, revenue), buildings, storage, vaccines, extra labor, production contracts (e.g., ensure input supply and quality), new technologies (e.g., automate watering) |
| | Marketing and Price | Prices of inputs or outputs change after a producer commits to a plan of action. Price fluctuations stem from domestic and international supplies or substantial changes in demand | Product quality (genetics, disease, handling, input/feed)
Product price (quality, timing, global market, weather, government policy, contracts, …) | Futures and options, forward contracting, retained ownership, quality controls, storage (timing), cooperatives, niche/value-added marketing, … |
| | Financial | Stems form the way a business is financed Borrowed funds leverage business equity but increase business risks | Market, production, legal and human risk, interest rate changes, natural disasters (drought), land market changes, foreign exchange, loan calls, … | Cash reserves, equity, borrowing capacity, reducing other types of risk (production, marketing, etc.), insurance |
| | Institutional | Government or other institutional rules, regulations, and policies effect profitability through costs or returns | Taxes, contract disputes, regulations, government policies, law suits, ambiguous and/or unwritten agreements, neighbors, environmental programs, … | Estate planning, tax planning, contracts, bonds (e.g., environmental liability), research and education about local laws, … |
| | Human Resources | The character, health, or behavior of people introduces risk. This could include theft, illness, death in the family, loss of an employee, or a divorce for example | Ambiguous and/or unwritten agreements, poor planning, miscommunication, health or other family disasters, … | Family planning, including labor planning, clear contracts, training and goal setting, communication, estate planning, … |
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