Evaluating Risk Management Alternatives via RightRisk Analytics (Nov. 20, 2020 Webinar)
Department of Agricultural Economics
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11/20/2020
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Description
With John Hewlett, ranch/farm management specialist, University of Wyoming, and Jay Parsons, professor and farm and ranch management specialist, University of Nebraska-Lincoln.
Evaluating risk management alternatives can be challenging, especially without the right tools. The RightRisk Education Team has been working for nearly 20 years to develop the right tools to assist managers of agricultural operations to make the best decisions, even when the information at hand is incomplete or difficult to interpret. The team has built numerous tools to assist managers to sift through the information available and alternative management strategies to identify those that have the best chance of moving them and their operation towards their goals. This presentation will explore the tools currently available and the general approach followed for each. Specific decision examples will be demonstrated including a look at the effect LRP insurance can have on projected revenue.
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- [00:00:24.570]Jay Parsons: Good afternoon, everyone. Thanks for joining our webinar today. I am J Parsons professor and farm and ranch management specialist in the Department of Agricultural Economics at the University of Nebraska, Lincoln.
- [00:00:36.480]Jay Parsons: This series of webinars is produced by our extension farm and ranch management team and typically runs every Thursday at noon Central time. You can find recordings of these sessions a schedule of upcoming webinars and other resources online at the URL farm ul.edu
- [00:00:54.360]Jay Parsons: We would like to quickly highlight the Nebraska rural response hotline today in times of stress.
- [00:01:01.950]Jay Parsons: Knowing when to reach out is is essential to Nebraska rural response hotline can provide mental health counseling information regarding legal assistance.
- [00:01:11.340]Jay Parsons: Financial clinics mediation and more lines toll free number is 1-800-464-0258 more resources related to stress and wellness can be found at rural wellness.us now.edu
- [00:01:30.210]Jay Parsons: And now for today's webinar on tools for evaluate evaluating risk management alternatives.
- [00:01:36.360]Jay Parsons: Evaluating risk management alternatives can be challenging especially without the right tools, the right risk education team has been working for nearly 20 years to develop the right tools to assist managers.
- [00:01:47.550]Jay Parsons: That your cultural operations to make the best decisions even when the information at hand is incomplete or difficult to interpret.
- [00:01:55.680]Jay Parsons: The team has built numerous tools to assist managers to sift through the information available and alternative management strategies to identify those that have the best chance of moving them and their operations towards their goals.
- [00:02:09.570]Jay Parsons: To address these challenges and explore available options. I'm glad to be joined today by my colleague on the right risk Education Team john hewlett
- [00:02:18.120]Jay Parsons: An extension farm and ranch Management Specialist with the University of Wyoming Department of Agricultural and Applied Economics
- [00:02:25.320]Jay Parsons: John has held this position since 1987, the same year he earned his master's in Agricultural Economics from Oregon State.
- [00:02:32.760]Jay Parsons: Prior to that, he graduated with his bachelor's degree in agricultural business from Montana State University at Wyoming John's extension work on farm and ranch management issues includes risk management financial analysis, technology, and much more.
- [00:02:48.690]Jay Parsons: At the conclusion of John's presentation. I'd like to take a few minutes to demonstrate one of the tools and the right risk analytics toolbox that I use extensively
- [00:02:56.520]Jay Parsons: In my extension work and in my classroom work here at UL and to tie it in with our webinar from last week, I'm going to use it to analyze the potential use of livestock risk protection insurance as a part of a cattle marketing plan.
- [00:03:10.260]Jay Parsons: Following that, we'd be happy to answer any questions that you have. During our Q AMP a session, you can enter those questions at any time at the bottom of your screen using the Q AMP a box that's available to you there. But we'll address all of those at the end.
- [00:03:26.580]Jay Parsons: So with that john thank you for joining us today and I'm going to turn the floor over to you to talk about evaluating risk management alternatives using the right risk analytics toolbox. So john floors yours.
- [00:03:40.110]John Hewlett: Well, great. Thank you, Jay, for the opportunity to present some of what we've been able to put together in the way of tools for analyzing different risk alternatives.
- [00:03:54.000]John Hewlett: And so I've got a number of them to kind of briefly introduce was the hope with this presentation.
- [00:04:01.140]John Hewlett: Clearly, we could spend quite a bit more time digging in. As you will be able to demonstrate at least one of the tools once we're finished, but I'm just going to run through them and try to give kind of a brief overview of each. So with that, let's go ahead and get started here.
- [00:04:21.750]John Hewlett: Let's see. Here we go.
- [00:04:24.510]John Hewlett: So, you know, risk management is essentially choosing. We don't think of it, often in this way but choosing
- [00:04:32.880]John Hewlett: On the part of the manager in an attempt to either alter the probabilities for future events or not. And you might ask, well, why not
- [00:04:43.140]John Hewlett: And the short answer is, well, some trade offs are actually just too costly to offer or two few benefits to worry about in terms of managing that type of risk.
- [00:04:56.580]John Hewlett: And the trick is that successful managers will spend the time thinking through which risks are worth managing before attempting strategies that may prove in fact ineffective.
- [00:05:08.610]John Hewlett: So once risk data has been organized and of course that could take quite a bit of time and involve a lot of different steps and sources.
- [00:05:16.080]John Hewlett: But once we have it organized into some sort of a consistent framework that we're confident
- [00:05:21.630]John Hewlett: That the data is now relevant for the situation we're facing in the decisions we need to make
- [00:05:26.460]John Hewlett: The next challenge is to follow one approach or another, or maybe even several to interpret that data and what it may mean for our management.
- [00:05:35.760]John Hewlett: So the right risk team as Jay mentioned it's built numerous tools to assist managers to sift through that data and the alternative management strategies.
- [00:05:44.850]John Hewlett: To identify those that may have the best chance of moving them and their operation towards their goals.
- [00:05:51.510]John Hewlett: So the right risk analytics analytics toolbox is available for download at the right risk website at no cost.
- [00:05:57.810]John Hewlett: And each tool includes a written guide to help with its application and some even have online dedicated courses or videos outlining their use and the application and various
- [00:06:09.660]John Hewlett: Different kinds of management decision frameworks. So again, this presentation will explore those tools that are currently available and the general approach used with each
- [00:06:21.300]John Hewlett: So before we get into the specifics, it might be good to reflect. Just stop and think for a minute, which decisions do you find most challenging to evaluate for your operation.
- [00:06:33.150]John Hewlett: And we have a number of choices up here running anywhere from day to day, risk management to down and number four is the strategic risk management strategies or some or all of those choices.
- [00:06:45.780]John Hewlett: And what we're looking at is a is a list of choices we gave two operators in a large Midwestern gathering with over 70 managers in attendance.
- [00:06:57.750]John Hewlett: And we took a poll using an audience response system with these results, you can see on the screen now.
- [00:07:03.690]John Hewlett: And what those folks said was nearly a third of them struggled with strategic decisions regarding whisk which risk management strategy to follow.
- [00:07:13.740]John Hewlett: Almost another third said that they found year to year decisions more difficult and those choices. Probably involve things like choosing crop rotations or machinery purchases
- [00:07:23.940]John Hewlett: Were general resource allocation and the remaining third of managers suggested that season to season dishes decisions are the most challenging
- [00:07:32.340]John Hewlett: And those who indicated that off more than one of the other choices offered
- [00:07:39.870]John Hewlett: And it's interesting that active managers of large Miss Midwestern farms find those bigger picture type questions and decisions more challenging.
- [00:07:49.440]John Hewlett: I strongly suspect that this may be due and true for operators elsewhere as well, but due to the fact that it's really complicated and and challenging to make these choices.
- [00:08:00.780]John Hewlett: So the real question is, where do we get help with these kinds of decisions and organizing the information into a framework that we can actually choose between one or another alternative
- [00:08:11.820]John Hewlett: Our position with with that sort of questioning, then, is that many if not most of these decisions are in fact risk management decisions.
- [00:08:20.940]John Hewlett: And the reason we find them difficult to make is that they involve uncertainty.
- [00:08:26.310]John Hewlett: And uncertainty that all of us human beings find really difficult to deal with. Whether it's in our day to day life personal lives, you know, or in the broader context of managing our business or thinking about where we want to head in the longer term and and further down the road.
- [00:08:46.980]John Hewlett: So with all those challenges that we face making sound risk management decisions.
- [00:08:51.990]John Hewlett: The risk right risk team is dedicated a good deal of time and a number of years and resources. In fact, developing risk analytics tools.
- [00:09:01.140]John Hewlett: And in fact, they're intended to help managers evaluate these sorts of decisions that we face that involve risk and uncertainty and in general.
- [00:09:10.650]John Hewlett: we've arranged this listing here with the tools at the top, addressing fell. It's fairly small management changes.
- [00:09:18.780]John Hewlett: While those near the bottom. Consider the larger or multi year kinds of strategic decisions that I suspect most of us deal with on a regular basis. So let's take a little closer look at each of these
- [00:09:32.070]John Hewlett: So the first analytics tool is the risk scenario planning tool. Many students of agricultural economics are introduced to the approach used by this tool early in their degree programs.
- [00:09:45.150]John Hewlett: And it may appear simple but in its approach, but it offers powerful assistance to managers looking to compare alternative management decisions.
- [00:09:54.480]John Hewlett: Or strategies as they consider which one may be best. So the tool uses this well known partial budgeting approach to consider the financial impact of making a management change.
- [00:10:05.940]John Hewlett: That change could be considering say the application of more or less fertilizer choosing to keep tabs on say on feed for another 30 days or
- [00:10:15.570]John Hewlett: Calling just a few more cows. There's lots and lots of alternatives, we could consider, but each alternative will have different financial implications.
- [00:10:24.420]John Hewlett: And those implications are entered into a matrix of four quadrants that and the tool is organized with the positive impacts on the left.
- [00:10:33.150]John Hewlett: With added returns or reduce costs and the negative impacts are listed on the right as added costs and reduced returns
- [00:10:41.280]John Hewlett: Of course, not all decisions require entries in all four quadrants, but will make entries, then where they are required and and to adequately address or described the impacts of the decision.
- [00:10:54.750]John Hewlett: So the tool, though goes well beyond then that partial budgeting approach by adding in the possibility of considering very ability in the outcomes. So the tool allows for up to two different separate factors to vary based on the user's input those
- [00:11:13.800]John Hewlett: Changes are that those inputs could be
- [00:11:17.340]John Hewlett: change in price or variations in yield or quantity or quality. In fact, but the user gets to describe that given the decision that they're trying to face and spell that out using the framework that is in in front of you. Here is an example.
- [00:11:35.850]John Hewlett: So after clicking run the tool evaluates possible outcomes by drawing at least 1000 different samples from the range of variation described by the users input.
- [00:11:47.640]John Hewlett: These samples are then sorted to generate a probability distribution like the one you see on the screen. And in this way the output, not only provides the user some idea of the range of possible values, but also the probability associated with those outcomes.
- [00:12:03.870]John Hewlett: For example, in this graph, we can see that the net benefit from an analysis of using livestock risk protection with ending net benefits, ranging from
- [00:12:14.160]John Hewlett: Basically 100% probability of ending above what we see on the left is 340 $6,203
- [00:12:22.620]John Hewlett: Zero percent probability of ending above what we see on the right end of this of this spectrum there are 410,000 $520
- [00:12:31.980]John Hewlett: Or if you could think of it as another way is 100% probability of ending below that 410,000 or even a 5050 probability of ending somewhere around in the middle there at $382,040
- [00:12:45.780]John Hewlett: So again, you can use your mouse within the tool to actually move along that curve and see probabilities and net benefit values associated with any particular point along the curve.
- [00:12:57.990]John Hewlett: But implication for us as we look at this in a broad context is that the middle value is probably the most likely outcome.
- [00:13:04.770]John Hewlett: Where the probabilities decline as we move away from that 380 2000 and the middle in either direction along the curve.
- [00:13:12.540]John Hewlett: So the results from a single run of the analysis might be enough to inform the manager about how to proceed.
- [00:13:18.510]John Hewlett: But more likely is that evaluating one alternative then spurs, the manager to start asking yet another question. What if
- [00:13:27.180]John Hewlett: And the values are easily adjusted and a second analysis run to learn what the difference in a slight change might mean in terms of the ending net benefit values and as well as the potential probability changes.
- [00:13:40.440]John Hewlett: So in this way, the risk scenario planning tool can help a manager compare and evaluate alternative risk management strategies.
- [00:13:48.420]John Hewlett: In order to make the best management decision possible with the information currently at hand. Of course it doesn't actually forecast the future.
- [00:13:57.270]John Hewlett: But it's essentially taking your best estimate of what the future might look like and putting that together.
- [00:14:03.480]John Hewlett: In a context that might help you to compare those based on your own estimates. So that's how that tool works.
- [00:14:10.560]John Hewlett: Second tool we wanted to quickly run through is what we call the machine risk calculator.
- [00:14:15.480]John Hewlett: Is another risk analytics tool designed to assist managers with decisions about machinery resources and they're using AG settings.
- [00:14:24.480]John Hewlett: So the tool will not only calculate the cost of owning and using powered equipment like a tractor or swath or combine, but it will also do the same for implements or attachments pulled or used in conjunction with that power equipment.
- [00:14:40.830]John Hewlett: So those standalone estimates can also be combined within the software using labor and operating inputs to define and estimate the cost
- [00:14:50.790]John Hewlett: For various field operations such as plowing or bailing or spring. So it actually gives you a cost per acre of doing those field operations.
- [00:15:02.040]John Hewlett: And those resulting estimates can be viewed as a table. So we see here in the output.
- [00:15:08.760]John Hewlett: Screen as an example showing what the cost of each operation component would be on a per acre or a per hour of operation basis.
- [00:15:19.680]John Hewlett: So you can see the per acre values estimated with a blue shading in the upper portion of that output table or can have a pink shading.
- [00:15:27.540]John Hewlett: In the lower section on a per hour of operation basis so obviously these estimates can be extremely helpful to managers looking to estimate their break even cost of operation.
- [00:15:38.460]John Hewlett: As well as consider the cost of upgrading or using new equipment to accomplish the same operation.
- [00:15:44.610]John Hewlett: In addition, the rates could be used to compare with current custom operator quotes or even machine release rage to compare various options to obtain machinery services which could be important, given what options you might be considering
- [00:16:01.530]John Hewlett: And then finally, the risk machine risk calculator will also allow the user to consider the changes in those estimated cost, where one or another factor is allowed to vary.
- [00:16:12.810]John Hewlett: So for example, if we allow fuel costs to vary over a range of values or interest rates repair costs or even labor rates, we can see the impact on those cost per acre or cost per hour of operation.
- [00:16:29.220]John Hewlett: So after we click Run and defining the problem with click Run and then the tool evaluate so as possible outcomes by AGAIN DRAWING at least 1000 samples.
- [00:16:38.190]John Hewlett: From the range of variation described by the inputs and those samplers to then sorted and generate a probability distribution like the one on the screen. And in this way.
- [00:16:48.000]John Hewlett: The output, not only provides the user some idea of the range of possible values, but also the probability associated with those outcomes. So in this graph.
- [00:16:57.870]John Hewlett: We see possible field operation cost per acre by allowing fuel and oil expenses to vary across the low most likely and high value estimates.
- [00:17:09.420]John Hewlett: And we can read that off as you can see on the screen there pretty handy. Again, you could move your mouse along that
- [00:17:16.830]John Hewlett: range of values and see the probabilities and the cost per acre as you move along the curve in either direction. So that's how that tool would work.
- [00:17:28.230]John Hewlett: Another one we have put together as a lot of folks have questions about forage and forage leasing and the risk associated with that can be fairly substantial
- [00:17:38.280]John Hewlett: So we've created this forage risk analyzer tool to help livestock owners, as well as landowners understand about the contributions each makes to a livestock grazing lease arrangement.
- [00:17:51.570]John Hewlett: You can also be used to help design what a fair or equitable lease arrangement might be between the two parties as well as used by a single party to better understand the full set of comp components that contribute to the value of harvested forage as a resource to their activities.
- [00:18:11.790]John Hewlett: So the forage risk analyzer includes a number of different tables to assist the, the user to fill out the necessary information and define the type and extent of the resources.
- [00:18:25.170]John Hewlett: That would be included within the least description. So we start out, for example, here on the on the screen. We have an entry form for native range.
- [00:18:35.520]John Hewlett: Where we could describe the acres. The number they UN's available and the cost as well as the average tdnn value per a UN. So again, trying to
- [00:18:48.360]John Hewlett: Get at the quality as well as the quantity estimates there. And again, native range is one example you can see there the buttons in the in the upper left hand corner of that.
- [00:19:01.140]John Hewlett: That table screen where a person could also enter irrigated pastor fences water points and other details about the typical
- [00:19:11.790]John Hewlett: Range for in that particular pastor or allocation within the least. So again, there are a number of different tables within the tool to help you make those estimates as necessary. If you don't actually have the data from
- [00:19:26.550]John Hewlett: Actual clippings, which would be rare. I think if people had that. But we have the NRC tables in there as well as some other textbooks values to make those estimates and help make it a little easier to to get the, the, the least situation just described and defined for analysis.
- [00:19:44.910]John Hewlett: So once the resources and the services provided by each party have been entered the the tool provides a summary tab which lists the total net return or loss for each category.
- [00:19:57.030]John Hewlett: The user may then describe the respective share each supplier or user in the arrangement has been assigned for each cost category.
- [00:20:07.110]John Hewlett: So it can allow for up to several difference three it says here, and we can see three different suppliers or three different users. So maybe
- [00:20:16.380]John Hewlett: Case where you're running in common, or you have multiple pastors, you're trying to use it can define a number of different scenarios there.
- [00:20:23.790]John Hewlett: But the details are summarized on this Analysis tab that also offers information on the risk that is involved. And so the idea
- [00:20:32.370]John Hewlett: Is to provide the suppliers and users of the forage additional information to determine what is fair, given what each party is contributing to the livestock and land enterprise combinations
- [00:20:45.150]John Hewlett: The lower section of that tab then offers the user the chance to allow one element of the net return analysis to fluctuate between estimated low and high values around
- [00:20:56.340]John Hewlett: That most likely estimate in the middle. And that's provided by the forage risk analyzer in a distribution. Again, like we've seen with the other outputs.
- [00:21:06.840]John Hewlett: So it does that, again, by drawing 1000 samples from the range of variation and the resulting distribution is an estimated probability that the net benefit will be at or below any given value on the resulting graph.
- [00:21:21.240]John Hewlett: The users may again move their mouse along that curve to view the individual estimates and decide whether
- [00:21:28.530]John Hewlett: That actually represents a fair or reasonable situation from their perspective. So in this example, we see the net return per year, as it varies between the low most likely and high values entered for the net return
- [00:21:45.660]John Hewlett: For user number one in this case I guess was the example.
- [00:21:51.420]John Hewlett: So another tool we have put together is called the Enterprise Risk analyzer tool and it's designed to help managers of agricultural enterprises.
- [00:21:59.490]John Hewlett: Better understand the cost and returns from those enterprise activities. The tools, based on an information readily found on most Schedule F tax forms.
- [00:22:08.850]John Hewlett: But for more in depth results, a set of schedules is also available to further described the inventories.
- [00:22:14.730]John Hewlett: Machinery and Equipment debt and other resources that might be used in it in the farm that we might be looking to analyze the resulting summary outlines net return for the entire farm or ranch, as well as revenues and expenses for each enterprise.
- [00:22:31.770]John Hewlett: The intimate information entered by the user about variations in price and yield for each enterprise are used estimate breakeven prices and yields for each enterprise independently.
- [00:22:43.950]John Hewlett: So this provides the active manager with the detailed understanding required to make mid year corrections to marketing plans as well as production strategies as needed.
- [00:22:55.170]John Hewlett: After the user clicks run the software again evaluates the various possible outcomes by running the simulation.
- [00:23:05.250]John Hewlett: Provided by the users input and then generates the resulting probability distribution.
- [00:23:11.160]John Hewlett: Giving the user estimates of the most likely net return on a gross farm basis, that is to say all costs and returns as well as on a cash only
- [00:23:21.930]John Hewlett: Basis. So we have a couple of different depictions here of the net return analysis. It's available in the software. We can also use other tabs.
- [00:23:32.220]John Hewlett: To use our to calculate or run the break even analysis on either price breakeven price or breakeven yield basis for each enterprise.
- [00:23:42.840]John Hewlett: So that once we click run again that depicts the distribution
- [00:23:48.000]John Hewlett: outlining the probability of break even breaking even across the minimum most likely and maximum values entered for either price or yield.
- [00:23:56.160]John Hewlett: And again, tied to each enterprise independently. So the analysis covers breakeven estimates on a gross farm basis again on the left. That would be all costs and returns as well as on a cash only basis in the right hand graph.
- [00:24:10.980]John Hewlett: So with that an accurate set of results are provided and the manager is in a pretty good position to evaluate
- [00:24:17.520]John Hewlett: How profitable each enterprise activity is on its own merit, as well as how profitable winner one enterprise activity is compared to others.
- [00:24:26.160]John Hewlett: And then finally, what might be the largest expense categories for each enterprise which could be of great concern or give the manager some insights as to where to apply the management.
- [00:24:38.250]John Hewlett: Effort to manage that enterprise if cost reduction is the focus. Obviously, this information is extremely helpful when identifying adjustments to enterprise activities with the goal of improving either enterprise profitability or the profitability of the entire farm or ranch.
- [00:24:58.080]John Hewlett: Already financial is another whole farm sort of analysis tool is designed to help understand the financial statements and how they interact to provide a measure of financial business position and financial performance.
- [00:25:11.940]John Hewlett: Rd and the name stands for Reader's Digest and usually the information we see presented here on the single screen.
- [00:25:19.410]John Hewlett: Requires a numerous financial statements and a number of pages. And so often the reader or the user gets lost in the detail.
- [00:25:27.240]John Hewlett: So the one of the primary purposes of this tool is to provide opportunities to better understand the relationship between the information across the five financial statements.
- [00:25:37.050]John Hewlett: depicted on this single output screen as well as how those values change when we adjust one or another factor.
- [00:25:45.120]John Hewlett: So on this screen. We're looking at beginning and ending balance sheets in the upper left hand corner. We have the cash flow statement in the lower left hand.
- [00:25:55.920]John Hewlett: Segment of that the accrual net income statement is in the upper right hand corner and then the lower right hand corner contains the statement of changes in owner's equity.
- [00:26:08.550]John Hewlett: And so, in brief, then the tool offers this chance to conduct. What if analysis through a set of drop down menus.
- [00:26:16.020]John Hewlett: Which is available in that drop down at the upper right hand corner. So we here we've selected Family Living revenues and expenses.
- [00:26:23.280]John Hewlett: And that's populated the lower section of the tool which we see these different sliders.
- [00:26:28.350]John Hewlett: listed there. And so moving one or more of those sliders left and right. Adjust the value for example owner withdrawals higher or lower than the initial value.
- [00:26:39.030]John Hewlett: And as this is done, the values on the linked financial statements change in response real time.
- [00:26:45.600]John Hewlett: So the user can see what would be impacted. By say, changing owner withdrawals. So in this way, the user is able to see what difference there may be with changes to one particular measure or by adjusting several of them and its impact for example on net income or on equity position, etc.
- [00:27:07.260]John Hewlett: Another tab on the analysis in within this tool allows the user to conduct some financial analysis by presenting the various financial ratios and indices. We're often looking at for financial performance. So essentially we're looking at the five different common categories listed here.
- [00:27:31.500]John Hewlett: Liquidity solvency profitability repayment capacity and financial efficiency and those are presented with a stoplight analysis. So, green, yellow, red
- [00:27:42.390]John Hewlett: Where each measure provides feedback. Then on whether the measure is good and would be depicted in green, yellow, where we might
- [00:27:49.620]John Hewlett: Need to pay a little more attention to it or if there's real concern red would be the color of the thermometer there and then the corresponding values in in numerical form on the far right.
- [00:28:02.370]John Hewlett: So another tab within that analysis. And I guess I don't have it captured here you can see at the top, it's labeled credit scoring allows the user to see
- [00:28:12.780]John Hewlett: How the lender might look at your values of financial performance on their side of the desk and and it allows you to adjust these sliders at the bottom.
- [00:28:21.630]John Hewlett: To see whether or not the adjustments you have in mind might actually make your credit perspective portfolio or or from the lenders perspective, a little more favorable
- [00:28:32.220]John Hewlett: So each one of the sets of results are adjustable. And again, dragging those sliders allows you to do. What if analysis with this tool, it does also allow the user to enter their own data and save and
- [00:28:46.890]John Hewlett: And do different what if scenarios in terms of thinking about different forms of restructuring, you might be considering or if you're just looking at tweaking some things using the sliders to accomplish that.
- [00:29:01.080]John Hewlett: Another tool we have is called the multi temporal risk analyzer. It's a mouthful, to say, but it's basically designed to provide financial analysis of multiple year management strategies.
- [00:29:14.280]John Hewlett: And decisions involving risk. So examples here might include things like investment decisions, change it in production practices.
- [00:29:24.060]John Hewlett: Maybe adding or subtracting enterprises or other decisions that involve multiple years to come to fruition, or a multiple year commitment.
- [00:29:33.390]John Hewlett: In order to see a positive economic return. So it's setup, similar to the risk scenario planning tool in that it's designed around the partial budgeting framework that we described with that tool, but in this case.
- [00:29:50.520]John Hewlett: The tool allows you to not only describe the the most likely value and the maximum or low and high values that you might expect, insofar as changes in the added returns or added costs, etc.
- [00:30:06.660]John Hewlett: But it allows you also there to the right to tick the boxes where those changes might occur. So you might have a return that that occurs periodically over series of years.
- [00:30:21.450]John Hewlett: Or a cost that may be only is is needed, every once in a while and then other costs that could be entered as occurring every single year.
- [00:30:31.020]John Hewlett: The horizon as you can probably see with the screen. There's is up to 20 years. So it's a very powerful tool in terms of thinking about
- [00:30:38.160]John Hewlett: Things like what if I installed some new you know water points or a
- [00:30:43.920]John Hewlett: I installed some new cross fencing and so clearly a long, long time frame there in terms of benefits to come back. How would that look
- [00:30:53.070]John Hewlett: Or if I upgraded my current irrigation system, what would be the payback. I might expect. And so, those types of things that would take a number of years to consider and mail and may have periodic maintenance required over time.
- [00:31:05.670]John Hewlett: Or other kinds of periodic cost of returns, we are able to account for that within this tool. Once we have that defined, we can look at the results, either in a tabular framework like we see here.
- [00:31:16.890]John Hewlett: Where we include cash only on the left is zero interest rate, essentially, or on a present value basis on the right hand side with some assumed interest rate as the basis for calculating the time value of money.
- [00:31:33.630]John Hewlett: In addition, there the tool presents those values that we saw there in the table on a graphical basis and shows the maximum values in a green dotted line in the upper portion their red line.
- [00:31:47.430]John Hewlett: Or the most likely line in terms of the blue and then the oscillation around that most likely value on an average basis. Again, this is the cash only
- [00:31:57.330]John Hewlett: Sort of depiction. So the lines are straight in that kind of outline. But if we look at the depiction on a
- [00:32:05.340]John Hewlett: On a present value basis where we're calculating the time value of money into that set of calculations, then the the
- [00:32:13.950]John Hewlett: The, the high values and the low values are are more of a curve. And we see that change over time and narrowing towards the most likely values on the right hand side so that
- [00:32:25.920]John Hewlett: Generated with just the tabular results, but the tool also allows us to put the risk and variation associated with risk into the, into consideration.
- [00:32:36.510]John Hewlett: Which I guess, in our view, adds the real palliative power to the analysis by generating those probability distributions for the possible net returns over the
- [00:32:44.790]John Hewlett: Over that horizon that we'd be considering. So these two graphs contain one of this reset of results, comparing net present value.
- [00:32:54.060]John Hewlett: Which is the green curve to an annual returns possibility depicted with the brown curve. So the green curve. You could think of is representing all the possible
- [00:33:05.250]John Hewlett: Values for any particular annual net present value return given thousands of possible random draws. So worst case scenario. And in this graph is a negative $7,841 and the best case scenario is a positive $10,388
- [00:33:23.520]John Hewlett: Or described. Another way that green curve includes the very best to the very best possible outcomes, while also including the very worst of the worst possible outcomes.
- [00:33:34.290]John Hewlett: And and everything in between where the brown curve is one set of possible outcomes with the annual net present value returned from just one sample draw across all those 20 years
- [00:33:48.840]John Hewlett: So it's also possible. You can see there's a run button down there at the bottom to recalculate the results. And what happens is
- [00:33:56.550]John Hewlett: Then we see that brown curve moving along the green curve, but it always within the bounds of the upper
- [00:34:02.640]John Hewlett: And lower limits of that green curve. And so you could think of the brown one as being just one possible run of the 20 years, whereas there's also also various
- [00:34:13.080]John Hewlett: Alternative possible runs and when you click the button, it's kind of interesting to see how those may change over time as well as the slope possible changes within the variations there.
- [00:34:25.770]John Hewlett: Another suite of tools that we have created was was part of a effort to create a textbook listed here on the lower left. It's called applied risk management and agriculture.
- [00:34:37.170]John Hewlett: And not that we're really thinking you might buy the textbook, but we put together a suite of tools to go along with that. To help folks evaluate
- [00:34:46.470]John Hewlett: Various risk management decisions within this strategic management framework represented by the diagram in the upper left hand corner.
- [00:34:54.810]John Hewlett: The first three steps of that strategic management process involved, your ability and preference to tolerate risk and to
- [00:35:04.290]John Hewlett: Try to and what it is you're trying to reach as far as a set of risk management goals, your tolerance for risk is going to depend on your financial health and personal preferences, obviously.
- [00:35:16.020]John Hewlett: Then the middle steps are that are the tactical steps which include identifying risk the outcomes for various management actions.
- [00:35:23.940]John Hewlett: Determining the light likelihood for each outcome and making an informed decision about how to manage any risks. So it's kind of an analysis stage.
- [00:35:32.760]John Hewlett: Thinking about again where you want to go and then looking at what some of the alternatives are to help you get there. Then, then the operational stage is the third stage, which
- [00:35:43.590]John Hewlett: Shoot, which is intended to assure that what you are doing is is properly evaluated and periodically reconsidered, and that the process then would
- [00:35:54.840]John Hewlett: Potentially be repeated with course corrections as you go through time with that replanning step in the
- [00:36:02.190]John Hewlett: In the far left of the operational stage. So it's intended to help you think through how you would manage risk and more of a strategic framework.
- [00:36:10.800]John Hewlett: And within this toolbox. There is essentially 20 different risk management tools or risk analytics tools to help you accomplish the planning framework outlined within that strategic risk management process.
- [00:36:24.630]John Hewlett: And again, all of those tools that I've just quickly. Very quickly move through are available on the right risk website at right risk orgy under the Tools link.
- [00:36:36.960]John Hewlett: And each one is designed to help decision makers take risk into account when they're considering making management changes as they plan for the future.
- [00:36:48.210]John Hewlett: The tools are intentionally designed to address everything from relatively small management changes to those involving obviously much larger and multi years strategic types of decisions.
- [00:36:59.910]John Hewlett: The team has also developed an extensive online library of self paced courses on risk management.
- [00:37:06.810]John Hewlett: topics are pretty widely ranging covering everything from record keeping to financial statements financial analysis.
- [00:37:14.520]John Hewlett: To management transition and end of life planning to evaluating risk strategies and understanding risk as it exists in agriculture, all of these are available online and free of charge with no registration required
- [00:37:30.840]John Hewlett: Team is also created in posted a series of different print and online publications offering users a chance to dig in further on various risk topics.
- [00:37:40.740]John Hewlett: Some of those include are categorized here as the risk management profiles, which are designed to outline various risks or management decisions faced by example operations.
- [00:37:51.630]John Hewlett: And a description of the tools and strategies. They've used to address those risks.
- [00:37:56.460]John Hewlett: The applied risk analytics series describes the application of risk analytics tools to evaluate risk alternatives for example operations. And then finally on the far right, we have risked concepts.
- [00:38:08.940]John Hewlett: Which are offering overview of various types of organizational structures comparing each across seven different alternative criteria for evaluating whether that structural form.
- [00:38:20.790]John Hewlett: best fits your type of operation and your goals for managing risk team also produces a monthly newsletter on a variety of risk management topics.
- [00:38:30.360]John Hewlett: And that newsletters available by either email or online with archives copies available from 2013 forward.
- [00:38:38.100]John Hewlett: So, a good number of years we've been doing that. And a lot of copies and different topics already have been addressed.
- [00:38:43.980]John Hewlett: The newsletter. If you'd like to subscribe is free of charge, and may be one additional method for you to keep up with the many different risk management approaches and strategies available to today's risk managers.
- [00:38:58.710]John Hewlett: So I'd like to thank you for participating in today's brief presentation on evaluating risk alternatives there indeed many competing alternatives for evaluating and managing risk in today's world.
- [00:39:10.680]John Hewlett: As well as plenty of uncertainty making that necessary. We'd be happy to help you move your risk management forward to the next stage.
- [00:39:20.160]John Hewlett: Our contact information is on the screen or we invite you to join us online at right risk.org
- [00:39:27.000]John Hewlett: And with that, Jay, I would like to again thank you for the opportunity to make this presentation today. And I'd be happy to try to answer any questions, folks may have on what we've been able to cover, whether that's you want to try to do that now. Or if you want to wait until we're done.
- [00:39:48.330]Jay Parsons: It takes john and I think I'll go ahead and demonstrate the risk scenario planning to with example had in mind and encourage people after hearing about all the tools that john mentioned that are in the right risk toolbox.
- [00:40:03.060]Jay Parsons: To
- [00:40:04.800]Jay Parsons: Visit and explore those if you have questions on those please go ahead and put those in the Q AMP a box down at the bottom of your screen.
- [00:40:13.410]Jay Parsons: So let's
- [00:40:15.480]Jay Parsons: Go ahead and I'll share my screen and
- [00:40:22.200]Jay Parsons: Flee that's up and people can see that okay
- [00:40:29.460]Jay Parsons: Okay, what I thought I would do is go ahead and
- [00:40:33.660]Jay Parsons: Demonstrate that risk scenario planning tool using the livestock risk protection insurance example that john briefly touched on, and tight together.
- [00:40:42.690]Jay Parsons: tied together with the webinar that we had last week that talked about all the changes that have been made to that insurance product here recently.
- [00:40:51.240]Jay Parsons: This is something I get a request on quite a bit. And I found that risk scenario planning tool to be a valuable tool to use to help explain
- [00:40:58.770]Jay Parsons: To people how LLP might help them and help them analyze the possible use of it.
- [00:41:04.380]Jay Parsons: Just as a quick background. For those of you that weren't on our webinar last week, LLP is a price protection tool. It's designed to protect against a decline in national cattle prices.
- [00:41:16.830]Jay Parsons: And it's available for feeder cattle under 600 pounds. So essentially calves off of the cow that with little or no background in
- [00:41:24.810]Jay Parsons: And then also feeder cattle from six to 900 pounds and fed cattle. It's available anywhere from coverage out anywhere from 13 weeks to 52 weeks or if you prefer months, I'd be three months to a full 12, month, year
- [00:41:39.270]Jay Parsons: And of course, a producer should choose the time closest when they actually plan to market the cattle in order to buy the coverage that would protect them against the risk that they face there.
- [00:41:50.040]Jay Parsons: It is offered through army and army approved livestock insurance agents is where you would purchase it. There's a two step process of filling out an application.
- [00:42:00.630]Jay Parsons: With the agent which basically connects you to somebody that can then sell you a specific coverage endorsement on a specific number head at a specific weight.
- [00:42:11.940]Jay Parsons: is highlighted in last week's webinar. There's been a lot of changes in two of the biggest ones that make it more appealing for producers to use this at the premium is now do at the end of the endorsement period, instead of the beginning
- [00:42:24.360]Jay Parsons: So you can take the insurance out and not have to pay for it up front, you pay for it at the end and prices go up and you don't get an indemnity
- [00:42:32.310]Jay Parsons: Hopefully you're happy with the higher prices and have the money available than to easily pay that premium and of course the prices go down.
- [00:42:39.930]Jay Parsons: The premium is taken out of the indemnity payment that you get the big one, though this getting a lot of coverage is this increase in subsidies.
- [00:42:48.330]Jay Parsons: Up for the first 15 years of the existence of LLP the subsidy was set at 13% no matter what coverage level. We've gone through three iterations of increasing that subsidy level.
- [00:43:00.270]Jay Parsons: To where we currently have the table depicted here anywhere from 35% to 55% subsidy.
- [00:43:07.170]Jay Parsons: Depending on the coverage level that you choose. So it's become a lot more appealing. We're getting a lot of questions on it. And so I've been using this risk scenario planning tool to help show that to people.
- [00:43:18.540]Jay Parsons: This is the example I'm going to work with. Today we're here in mid November but I went ahead and used a late November purchase date.
- [00:43:26.880]Jay Parsons: And projected out 17 weeks to late March and I looked at steers way to in that six to 900 pound range. We're going to go with 750 pounds.
- [00:43:36.330]Jay Parsons: For example, so this would be a situation where maybe you have your own steer calves. If you purchase some and you're going to say, put them out on cornstalk for the winter with some
- [00:43:45.840]Jay Parsons: distillers grains supplementation and put some weight on them and sell them in the spring and you're interested in some price protection if you go back, the last five years, purchased in the fall of 2015 up to the fall of 2019. These are the way the coverage would have worked out.
- [00:44:04.230]Jay Parsons: Where you see the expected ending value of the LP index. Again, this would be the CME feeder cattle contract expected ending value.
- [00:44:13.740]Jay Parsons: The coverage price was available and that represents the highest coverage price. You could have purchased during that time.
- [00:44:20.790]Jay Parsons: And then the actual change from that expected ending value is in bold. They're on the third line of the table so
- [00:44:29.580]Jay Parsons: You'll notice that in for the five years prices went down one year in 2016 it actually went up $8 and 40 cents in two years 2017 and 2019 and went down significantly.
- [00:44:41.130]Jay Parsons: Which is what you would have purchased the insurance for and those are the two years that you would have got sizable indemnity of $16 or roughly nine and a half dollars in each case.
- [00:44:53.010]Jay Parsons: That would have essentially cushion that fall for you. And that's the primary reason, of course you would purchase.
- [00:44:58.740]Jay Parsons: The insurance. A question is always, is it worth purchasing that protection given that you're stuck with paying this premium every single year and you only needed it or it really only paid off for you in those two years.
- [00:45:12.180]Jay Parsons: Where you had the sizable drop in prices. But of course,
- [00:45:16.410]Jay Parsons: As john mentioned. That's why we set up the tool was to help people look at some of those things and make that decision. This would be a graphical depiction of it.
- [00:45:24.390]Jay Parsons: Where you say, Is it worth in 2017 and 19 to have that insurance in place to cushion that fall compared to what I have to give up every single year when I pay those premiums.
- [00:45:35.160]Jay Parsons: On the top end when it doesn't actually pay off, so to speak, to have the insurance, as we all know, you don't purchase insurance, hoping to collect you purchase it for that protection. The question is always, is it worth it at that point.
- [00:45:47.910]Jay Parsons: So this is the example I'm going to work from these prices. I pulled, just a couple of days ago for a 17 week policy. So this would be from mid November to mid March.
- [00:45:58.410]Jay Parsons: And this is what was actually up and available. So we had an expected ending value at the end, March 16 at 130 9.189 for that feeder cattle contract, you could purchase a coverage at 130 801 which is roughly 99% of that.
- [00:46:17.100]Jay Parsons: This rate right here. The cost per hundred weight that they publish online is the full rate, the producer with a 35% subsidy, which would be in play here.
- [00:46:26.400]Jay Parsons: This number would drop to $3 and 90 cents 100 way. So that's what we're going to work with in our example we're going to assume you have 100 steers at 750 pounds.
- [00:46:36.900]Jay Parsons: That $3 98 cent 100 way cost of insurance coverage price at 138 index value when 39.189 is your expected ending value. And then the last piece we had to put in here.
- [00:46:49.650]Jay Parsons: Because remember, this here is the national prices, you're going to have a basis between that national price in your local market price.
- [00:46:56.460]Jay Parsons: And we have the luxury in Nebraska, I guess you'd call it a luxury, we generally have a positive basis. Can we have a lot of feed yards and a lot of processing facilities in Nebraska relative to the number of calves that we have coming off the cows. We do have a lot of calves, but
- [00:47:13.140]Jay Parsons: Anyway, we end up usually with a positive basis. So I'm going to assume a $12 basis here in the example of positive pieces so that put us at 151 for that expectation locally. So with that, I'm going to go ahead and pull up our risk scenario planning tool.
- [00:47:31.560]Jay Parsons: And show that to you with those numbers plugged in john mentioned, this is a partial budget right hand side is basically the the negative effects. And in this case, it's your premium cost.
- [00:47:42.510]Jay Parsons: So we have 100 head and I picked the 100 on purpose so because we're going to do all this and hundred weight at 750 pounds at 750 hundred weight.
- [00:47:51.450]Jay Parsons: At $3 and 98 cents per hundred Wait, so roughly on just under $3,000 worth of insurance premium costs.
- [00:47:59.370]Jay Parsons: And that's the negative of it on the left hand side is all the market information to calculate the revenue. So we start off with a basis value of $12
- [00:48:08.160]Jay Parsons: Expected index and when 3919 for the price index and a coverage level 130 801 we're going to sell these in the local market so that seminar and 1500 way to get sold. If everything turned out normal and be
- [00:48:22.050]Jay Parsons: Which is just our basis added to the National price index. So roughly $113,000 worth of revenue.
- [00:48:30.420]Jay Parsons: LLP indemnity will kick in. If this price index actually falls below that amount. So let's just say this price index falls to 130 in the end.
- [00:48:42.960]Jay Parsons: That would get put us there at
- [00:48:45.630]Jay Parsons: $8 one cent indemnity would kick in. Then, and this is just a formula that says if if d seven is less than DEA then take the difference between them.
- [00:48:55.950]Jay Parsons: If you download this template that's available on the right risk website that formula is already there and and you don't have to worry about it, but
- [00:49:05.640]Jay Parsons: We put this back in
- [00:49:08.370]Jay Parsons: Okay, so we end up back at our starting point. I'm not going to go over the cash forward contract right now. But this particular template that I've been using I throw that in. Also, so I can use it.
- [00:49:20.310]Jay Parsons: But anyway, if everything turns out normal would need the insurance so we end but
- [00:49:25.620]Jay Parsons: So we pay this $3,000 and not get it. And we net out about 110 not need it and get net about 110 but we're buying it in case something bad happens. And as john mentioned, you can put in two different scenarios. In this case, we let the
- [00:49:38.940]Jay Parsons: Ending price index, which we expect to be at that 130 9.189 very between 130 and 155 I just pick these numbers, so don't take him as my forecast. I just took an educated guess at what I might expect.
- [00:49:54.390]Jay Parsons: And then the basis value, which we're putting in 12 currently we let vary between zero and 15 and again I pick those numbers. There's no hard science analysis behind that at this point.
- [00:50:08.220]Jay Parsons: So we allow those to vary. And then we say, what's the best in the worst case scenario. So as I run those you'll see it's pulling from those possible variation to crank out a whole bunch of different scenarios and then it's given me the distribution of possibilities here.
- [00:50:24.990]Jay Parsons: And it would run from a high of 121,000 in a best case scenario to a low of one or two in a worst case scenario is I pulled from all the different
- [00:50:36.990]Jay Parsons: possibilities in terms of prices for the national price index. And then for the basis. So that's a range of revenue that it could get
- [00:50:45.720]Jay Parsons: From the sales john mentioned the 50th percentile, which would be right here that's about 110,000 which is pretty much where I was in terms of my expectations.
- [00:50:55.980]Jay Parsons: So, which means I'm basically 50% chance of being above that 50% of being below that natural question might be, this hundred and $13,000 revenue. Where does that lie.
- [00:51:07.050]Jay Parsons: If we scroll along here. The $113,000 revenue is more like an 80% probability that will be below that. So the question is, you know, that naturally comes up business insurance worth it.
- [00:51:20.760]Jay Parsons: At this point with the tool allows you to do those quickly make those changes. So if I wanted to compare this to no insurance at all except to come back here and don't pay the premium.
- [00:51:30.390]Jay Parsons: And when I don't pay the premium. I can't get the indemnity. OK, so my expectation is that 113 391 but I'm going to get dinged then
- [00:51:42.630]Jay Parsons: If prices go low, but I can quickly have it run it again.
- [00:51:48.150]Jay Parsons: Produce a new distribution. Now this is an Excel. So sometimes it does some funky scaling here.
- [00:51:53.190]Jay Parsons: But again, I can just mouse along here 124 because my high point because I don't have that almost four or $3,000 worth of premium to pay. So obviously, things are not great. I get $3,000 more money there.
- [00:52:06.090]Jay Parsons: And the interesting piece here is I end up about it the same on the on the bottom end here.
- [00:52:11.130]Jay Parsons: Okay, so this distribution that I'm looking at here. I'm saying, well, it doesn't really help me a whole lot on the downside.
- [00:52:16.740]Jay Parsons: Inside you know the middle is really with those expectations but now because I'm not paying the insurance premium about 113 so if I was a producer, looking at this and contemplating this I'd start to think that maybe I don't need the insurance. And the question will be, why
- [00:52:33.690]Jay Parsons: In this particular case, you'll notice that most of the riskier. Most of the uncertainty as to the upside and LLP is only protecting over here on this national market price.
- [00:52:44.580]Jay Parsons: Situation. It's not protecting you. On this basis, risk. Okay. And there's a lot of downside risk on the basis which the way I have this currently depicted
- [00:52:53.820]Jay Parsons: So if I were a producer, looking at this, I might consider well boy, maybe I don't want to do the LP insurance. Maybe I need to look at it at a actual cash forward contract that's going to like lock in that basis.
- [00:53:05.850]Jay Parsons: If you have $150 dollar offer here a person could come back and and actually contract half these calves. Of course you would have less to sell on the cash market, then
- [00:53:17.250]Jay Parsons: So then you get this weighted average again without insurance.
- [00:53:21.330]Jay Parsons: Very easy to play the What If game of how this actually plays out.
- [00:53:27.150]Jay Parsons: In terms of possibility. So that would produce this distribution. And now we bump up about 107,000 so we brought that bottom and about $5,000 higher
- [00:53:39.210]Jay Parsons: We're going to suffer on the top side though because we're accepting that 150
- [00:53:43.800]Jay Parsons: For certain on half of our calf crops. We're down to 118 there. So we're giving up about $6,000 in the top side but this gives a person or an opportunity to play that. What if game. How do I want to market these caves. What kind of distribution. Do I want to look at
- [00:53:58.650]Jay Parsons: The other question I get a lot is, this is all in the total. So the final thing would be sometimes people like to look at this, just in terms of prices and if you do that, what you can do.
- [00:54:08.610]Jay Parsons: Is instead of putting an actual calf numbers here, you can just go through and put together percentages.
- [00:54:14.940]Jay Parsons: So if I want to do all this on percentages and they'll RP and play end up doing a half, half of them as a contract. All of this is on 100 wait pieces so it'll produce a distribution for you, but the distribution will will be in terms of prices.
- [00:54:33.570]Jay Parsons: Okay, so this case we're going from 142 roughly too high of 153
- [00:54:44.730]Jay Parsons: Okay, so that's an example of how I've been using that risk scenario planning to a lot with people that are looking at LP or their pricing options when it comes to marketing their calves, so
- [00:54:56.790]Jay Parsons: With that, let's see if we have any questions that have come in, feel free to type those in the Q AMP a box and john or I will address those.
- [00:55:13.440]Jay Parsons: So john. One of the questions is one that we get a lot. And that is just wondering, to reiterate that all of those tools in that right risk.org website. All of those are free for people to use. Correct. How are you able to do that was basically the question.
- [00:55:32.580]John Hewlett: That is
- [00:55:33.450]John Hewlett: I think probably the most common
- [00:55:35.220]John Hewlett: Question, we get. And so, the short answer is, those have been developed using grant dollars from a number of different programs. But one of the primary funders was risk management agency or ma
- [00:55:47.280]John Hewlett: With USDA and so as a result we have posted those and made them available. So not only are the tools there, but I think there is a guide for almost every one of them.
- [00:55:58.500]John Hewlett: And many of the guides include examples. So it's not just the tool, but a chance to
- [00:56:04.410]John Hewlett: To get started with it, we hope, and then again those other pubs in some cases have demonstrated those tools and results from them. So try to create a series of not only the analytics tools, but also the description and and examples of how they might be used in various management settings.
- [00:56:24.240]Jay Parsons: Thank you. And another question somebody noticed that
- [00:56:28.560]Jay Parsons: There were some other universities mentioned on some of the tools if they're interested in working with you on anything with the tools, whether they be examples, how do they go about doing that. Are you there an opportunity to do that. I guess is what you're asking.
- [00:56:43.710]John Hewlett: Yeah, absolutely. Good. Good question. We've, we've had other folks that have had some examples or some specific applications of some of the tools that
- [00:56:54.300]John Hewlett: We've worked with to to put those together. So yeah, absolutely. Lead entertain the idea of of anyone might have some ideas about how they might might be used or applications that they might be looking at
- [00:57:07.980]Jay Parsons: And somebody want to know, how did they get the newsletter in their inbox.
- [00:57:13.170]John Hewlett: Yeah, well it's the short answer is that on the back of the newsletter. It says, where to send an email. But basically, you could email me.
- [00:57:22.260]John Hewlett: Or I think there is an A email address listed on the right risk website basically just send, send us an email and asked to be added to the list and we'll be happy to put you on
- [00:57:34.080]Okay.
- [00:57:36.030]Jay Parsons: So we're here just a few minutes for see if there's any other questions that come in really appreciate you coming on today john to go through those gotta admit though, it's actually humbling.
- [00:57:48.570]Jay Parsons: The surprise all the work we've done over the years and a shorter time span.
- [00:57:53.280]John Hewlett: And there are lots of things. I mean, what
- [00:57:55.800]John Hewlett: Obviously I did not do justice to the tools other than just give a quick overview. But yeah, we're looking at almost 20 years worth of effort there, you've been working on some of these things and examples and
- [00:58:09.870]John Hewlett: Man, the applications.
- [00:58:12.150]John Hewlett: LLP is one I know you've used quite a bit, but recently figured out, we can use that same risk scenario planning tool to evaluate PRF and I'm kind of excited to put together some different examples with that going forward as well.
- [00:58:28.770]Jay Parsons: Yeah, that triggers a thought on my mind for the producers that are online or perhaps viewing this recording, I know I speak for john and I and for the whole right risk Education Team. We're always interested in helping people work through examples because we we use
- [00:58:46.680]Jay Parsons: Those experiences to help us build better education tools for other producers. So if there's a producer out there that's looking to use one of these tools and might need a little guidance on it and in how they put things and feel free to contact
- [00:58:58.950]Jay Parsons: John or I
- [00:59:01.020]Jay Parsons: We'd be happy to help you with that because it's it's a valuable as valuable for us as it is for you to see how the tools actually work in a live decision.
- [00:59:16.980]Jay Parsons: Okay, well, I don't see any other questions coming in to the chat box here unless I missed it.
- [00:59:24.210]Jay Parsons: So I think I'll go ahead and
- [00:59:27.660]Jay Parsons: Close things off, and thank you john for presentation here today and thank everyone else for joining us. A recording of this webinar will be posted on online at farm ul.edu
- [00:59:41.040]Jay Parsons: And that's where you can also go to register for any of our other upcoming webinars so check that website forum.us al.edu for more webinars in this series, they
- [00:59:52.440]Jay Parsons: Tend to all focus on farm and ranch management issues that are relevant to Nebraskans the series will be off next week for Thanksgiving. But we are going to return on December 3 so be sure to check that website farm ul.edu for our December schedule.
- [01:00:09.810]Jay Parsons: You will be receiving a short 32nd survey and your email, and we really appreciate your feedback on today's webinar, and especially your input on
- [01:00:18.900]Jay Parsons: Future sessions and potential future topics or speakers that we might reach out to to present in this webinar series. We just want to make it relevant and useful for
- [01:00:30.720]Jay Parsons: producers out there. So thanks again for joining us. And thank you john for excellent presentation on the right risk analytics tool box and hope everybody has a pleasant day to day and in a great Thanksgiving next week.
- [01:00:45.690]John Hewlett: Now. Thank you, Jay. Have a thing.
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