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Risk Management Practices on U.S. Farms and Ranches, 1996–2020

Author

Listed:
  • Baldwin, Katherine L.
  • Miller, Noah
  • Todd, Jessica E.

Abstract

This report summarizes the utilization of agricultural risk management strategies by U.S. farms between 1996 and 2020, using data from the Agricultural Resource Management Survey (ARMS). The risk management strategies considered in this report fall into four categories: (1) on-farm strategies, such as income and production diversification, and storage; (2) market-based tools, including Federal Crop Insurance, marketing and production contracts; (3) other Government programs producers use for managing risk, including countercyclical-type programs and disaster programs; and (4) strategies to manage longer term strategic risk, including investments in farm improvements and succession planning. Results show that although some broad trends in risk management strategy utilization between 1996 and 2020 can be identified, these overall dynamics are often associated with factors related to farm size or commodity specialization. For the classes of strategies examined, results indicate that holding savings, engaging in off-farm employment, and purchasing insurance other than Federal Crop Insurance (such as private single-peril (e.g., hail or fire) policies, liability insurance, or property insurance) are the most frequently used strategies among all farms.

Suggested Citation

  • Baldwin, Katherine L. & Miller, Noah & Todd, Jessica E., 2026. "Risk Management Practices on U.S. Farms and Ranches, 1996–2020," Economic Information Bulletin 396453, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersib:396453
    DOI: 10.22004/ag.econ.396453
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    File URL: https://ageconsearch.umn.edu/record/396453/files/EIB-296.pdf
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    References listed on IDEAS

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    1. Chenxin Leng & Wanglin Ma & Jianjun Tang & Zhongkun Zhu, 2020. "ICT adoption and income diversification among rural households in China," Applied Economics, Taylor & Francis Journals, vol. 52(33), pages 3614-3628, June.
    2. Frederic Ang & Simon M. Mortimer & Francisco J. Areal & Richard Tiffin, 2018. "On the Opportunity Cost of Crop Diversification," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 794-814, September.
    3. Timo Sipiläinen & Anni Huhtala, 2013. "Opportunity costs of providing crop diversity in organic and conventional farming: would targeted environmental policies make economic sense?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(3), pages 441-462, July.
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    1. Tsiboe, Francis & Zhao, Hongxi & Turner, Dylan & Chakravorty, Rwit & Davis, Walker & Steinbach, Sandro, 2026. "Crop Insurance Penetration in the United States, 2025," ARPC Report 404304, North Dakota State University.

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