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

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.