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Wyo Ag Risk - Production Risk

Livestock Production Risk


Agricultural production implies an expected outcome or yield. Variability in outcomes from those that are expected poses risks to [a farm firm’s] ability to achieve financial goals. Any production related activity or event that is uncertain is a production risk. The major sources of production risks are weather, pests, diseases, and the interaction of technology with other farm and management characteristics, genetics, machinery efficiency, and the quality of inputs. Fire, wind, theft, and other casualties are also sources of production risk. (After National Crop Insurance Services’ Crop Insurance and Risk Management Primer, Risk Overview, pages 34 – 35.)


Production risk describes factors that affect the quantity and/or quality of livestock yields. When livestock is sold at varying weights on a per pound basis, production risks impact either the number of animals sold or the weight of the animals. In addition, production risks may affect the quality of the animals, making them less desirable and therefore less valuable in the market. The quest for improved yields and reduced yield variability has been the major driver of improvements in technology and production practices over the years.


The risks associated with production agriculture are substantial compared to other industries. For example, too much or too little rain can ruin crops, make animals sick, and damage rangelands. Cold and heat can have huge impacts on livestock throughout the year and especially during breeding and birthing times. Diseases can impact animal numbers and weaning weights. Such uncertainty must be properly understood and managed if a farm firm or ranch is to realize success required for a viable and on-going operation.

Two articles are presented on the topic of Livestock Production Risk:

  1. From the National Crop Insurance Services’ Crop Insurance and Risk Management Primer, we provide an article by Dr. Laurence M. Crane entitled Production Risk.
  2. From the University of Wyoming's Chris Bastian, we provide "Risk and Resilience in Agriculture - Managing Your Production Risk: An Overview of the Tools You Can Use."

These articles were selected for their relevance, ease of understanding, and completeness; however, they do not provide an exhaustive discussion of livestock production risk.  Readers desiring additional information about livestock production risk are encouraged to explore the reference links provided below.



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Additional References


Library Sources

Western Risk Management Library:


National Ag Risk Education Library:


Risk & Resilience in Agriculture:


Recognizing Risks:


Managing for Today’s Cattle Market and Beyond:




Matching Livestock and Forage Resources in Controlled Grazing:


The Cow-Calf Manager:


Breeding Management:

Cattle Diseases:


Livestock Vaccination:


Conducting A Comparative Analysis of Your Herd’s Production Facts With Other Herds’ Production Facts:

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