by Elizabeth A. Tomlin
During the second session of Cornell Cooperative Extension’s (CCE) 2019 Manage Risk in Your Agritourism Business series, Delaware County CCE Senior Resource Educator/ Farm Business Management Specialist Mariane Kiraly, presenter for the series, spoke to viewers about managing production risk.
“Production risk relates to the possibility that your yield or output levels will be lower than projected,” said Kiraly.
Costumer/visitor expectations must be a priority.
Businesses such as “U-pick” or farm stands and similar businesses can be severely impacted by weather conditions, such as drought, excessive rain, freezes, insect pests, disease, equipment failure — or even failure of a credit card machine.
Production risk varies depending on what your venture is, and what you are relying on.
“There is a lot of production risk in agritourism,” Kiraly confirmed.
Several examples were looked at, including blueberry farms suffering damage from worms, and farms featuring pumpkin patches that suffered from excessive rainfall — resulting in too much mud, which deterred scheduled school field trips.
Your reputation in your agritourism business is everything.
“You want to save your reputation!” Kiraly emphasized.
If your blueberries are wormy this year, will your customers trust you next year?
If the school goes to a different pumpkin patch this year, will they come back to your farm next year?
If disappointed this time, many times they will not be coming back.
Strategies to minimize production risk include, carefully following recommended production practices, diversification through the addition of new crops, and maintaining equipment.
“I think if you’re going with any crop, planting the diversified variety of crops is critical.”
Crop insurance can stabilize income during these times of loss.
“Always have a back up plan to mitigate risk with production,” Kiraly advised. “The back up plan has to be as good or better than the original activity — especially if they are paying.”
Considering your site selection by evaluating existing land conditions will prove beneficial.
Although mitigation of production risk may cost money, time and effort, things like tile drainage, drip irrigation and planting resistant varieties should be considered.
Consider all risks pertinent to your particular venture. Documenting these risks will help you with planning. Participants in the risk management series were supplied with worksheets to help them with evaluating risks.
Other examples of things that can go wrong were discussed, such as with bounce houses, camping sites, wagon rides, and wedding reception venues; all of which Kiraly said are becoming increasingly popular in the northeast.
Specific case studies, including wedding venues and county-wide family farm days, were explored.
Having enough trained staff on hand is essential, Kiraly pointed out, emphasizing that staff must be trained for all required tasks.
Anticipate equipment failures, such as bounce houses that develop leaks, tractor tires that go flat — and even overly-tired horses that hold up the line, and have what you need for quick repairs or replacements on hand.
Safety of all farm visitors is paramount.
These may be equipment related, weather related, or simply everyday facts of your farm environment that visitors are not accustomed to.
Everything from animals to walkways must be taken into consideration.
Animals are generally unpredictable and children are frequently unpredictable, as well. So, it is best to have double fencing around livestock, fencing around all ponds and walkways maintained, with holes filled in, so that tripping and falls are prevented.
Hayrides with wagons that are hard to get on and off of, or are not properly secured to the tractor, can provide serious accidents. Hay-wagons should be closed in with railings so folks have security and children don’t fall off on bumpy hayrides. Wagons should also be attached with heavy, double chains, not pins.
“Wedding venues are becoming a big agritourism venture,” commented Kiraly. “When somebody is paying $10,000 for your wedding venue, everything really needs to be perfect.”
Weather conditions can potentially cause a serious agritourism risk where wedding venues are offered. Rain, mud, wind and even too much sun can ruin a wedding day. Precautions should be taken to ensure that expectations in this venue are met without exception.
Wilderness camping venues, another currently popular venture, present their own set of risks, with weather related risks topping the list — and lightning as a #1 concern. Buildings should be provided for shelter in the event of hazardous weather. Wild animals can be another risk. While some camps expect campers to see wildlife, other camping venues may view this as a hazard — and wild animals are frequently uncooperative in either case.
Consider these risks when planning your venture.
Signage cautioning folks of hazards and directing them to specific areas of your farm are advised to be bilingual or designed in universally understood symbols.
Business interruption due to fires, floods, wind damage and snow damage were also discussed.
Kiraly reminded participants of the program that the five areas of agritourism risk are: legal, marketing, human resource, financial, and weather/production.
For more information on these programs contact Kiraly at firstname.lastname@example.org or call 518.234.4303 (x111).
This is a five-county program, produced by CCE Delaware as host county and includes CCE Schoharie /Otsego, CCE Sullivan, and CCE Ulster counties. The program is also sponsored by the Northeast Extension Risk Management Education Center.