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National Agriculture in the Classroom

Agricultural Literacy Curriculum Matrix


Lesson Plan

FARMLAND: Farm Risk

Grade Levels

9 - 12

Purpose

Students will understand farm-related risk and how it relates to the risk in everyday life using illustrations from the documentary, FARMLAND. Grades 9-12

Estimated Time

1 hour

Materials Needed
  • FARMLAND documentary, short version, clips from 9:40-11:54 and 15:50-17:30
    • This documentary is available for purchase in DVD format from Walmart or Amazon. It is also available for online streaming from Amazon Prime, iTunes, Netflix, YouTube, and more. The film is available in the full documentary format (77 minutes) or the short, education version lasting 44 minutes. The time stamps indicated for the lesson correspond to the 44-minute educational version.
  • Risk Management Fact Sheets, 1 copy per class of sections 2-6. Staple each section separately.
Vocabulary Words

futures market: an auction market on which participants buy and sell commodity/futures contracts for a specified future date

genetically modified organism (GMO): any organism whose genetic material has been altered using genetic engineering techniques

organic farming: the production of food without the use of synthetic chemicals, antibiotics or synthetic hormones

risk: a situation involving exposure to danger

Background Agricultural Connections

Risk is a part of everyday life for farmers. It must be managed in order for farmers to make money and be successful. Still, there are significant factors that affect the profitability of a farm that are out of the control of the farmers. Farms are businesses, after all, and have to make tough business decisions in order to earn money.

The weather makes farming a risky business, because it can’t be controlled or stopped. A windstorm or hail can damage buildings and crops, too much rain can damage crops and make manure management difficult, too little rain can also damage crops and prevent livestock from having enough grass to eat or water to drink. A snowstorm, such as the Atlas blizzard of 2013, can kill plants and animals. The Dust Bowl was a disaster that was partially a product of an extended drought that was devastating to farmers at the time.

The commodity markets play a significant role in the profitability of a farm’s harvest. Farmers have no control over the cost of their inputs or the price they sell their product at – that’s all decided by the commodity markets. If the cost of feeding hogs is high because of the prices of corn and soybeans are high, the farmer has to pay the high feed prices, but can’t raise the price of his pork products to cover his input costs. 

Farmers can manage some of the risk involved in marketing commodities by using the futures market, where they can sell commodities before they are ready to be harvested. They will likely get a premium for selling months in advance, but must be able to supply the correct amount of the commodity to the buyer at the contracted future time. If a farmer sells 200 bushels of corn on the futures market and then a hail storm comes through and damages the plants, he might not have 200 bushels of corn to sell, and he loses money.

Crop insurance is another tool that farmers have to manage potential risk. It works like a safety net for farmers. If a farmer has a field that floods and all the corn is killed, he will be compensated for that yield loss at the rate of the yield of his other fields. Crop insurance protects against natural disasters such as hail, drought, and floods as well as insects and disease or a loss in revenue due to a decline in market price. Similar to health and home insurance, crop insurance does cost money. Each farmer evaluates their risk to determine if the added cost of insurance is a sound business choice.

Farmers also have risks and rewards associated to their decisions regarding their use of technology. Farmers choose specific seed varieties for their farms. This decision directly effects the success of the crop for the whole year. Farmers can use technology to mitigate some of the risks associated with weather and nature, such as insect or drought resistant GMO crops. In contrast, organic farmers, who must farm without GMOs or synthetic pesticides, have a different set of risks and rewards. They can’t use many modern technological farming advances to protect crops, which further increases their risk. However, an added premium for organically certified crops could be a worthwhile reward and investment.

Farming faces risk on a large scale as an industry, not just as individual farmers. Faced with the challenge of feeding an exponentially growing population, farmers and agriculture scientists have to be looking for new ways to use resources efficiently and maintain sustainable farming practices. In some cases, scientists and farmers use genetic engineering and GMO crops to ensure a high yield and a crop that is nutritious and protected from Mother Nature. With a hungry world to feed, weather events that devastate crops can also hugely effect world markets and world hunger.

Interest Approach - Engagement
  1. Ask students to think about the word, risk. "What is the definition of risk?" (a situation involving exposure to danger.)
  2. Write the word “risk” on the board and give students five minutes to define the word and write down two things in their lives that could be considered risky. Examples could include daily activities such as driving or riding a bike. You can also list hobbies and activities such as swimming, riding four-wheelers, hiking, riding horses, etc.
  3. Once you have a sufficient list of risks, have students observe the list and identify ways that they can minimize their risks. Examples include wearing a seatbelt and practicing defensive driving to decrease the risk of being in a car accident while driving, wearing a helmet while riding a bike, wearing a life jacket and learning to swim, using proper hiking equipment, etc.
  4. Conclude that we face risks every day. Some risks are greater than others. Though most risks cannot be eliminated completely, they can be managed and decreased through smart choices.
  5. Ask students what risks farmers take. Allow students to offer their ideas and inform them that they will be learning about some of the business risks farmers face and ways that they manage and diminish those risks.
Procedures
  1. While referring to the list of risks you started in the Interest Approach - Engagement portion of the lesson, ask students to identify what the activities involving risk have in common.
  2. There may be multiple answers. As students offer answers, used guided questions to help them realize there is a portion of risk that is completely out of the control of the person involved. For example, driving to work or school is necessary. You can wear a seatbelt and buy a car that has a good safety rating, but you cannot control the other drivers on the road who may act dangerously. Give other examples from your class discussion as needed for further illustration.
  3. Ask students if any of them wish to own their own business at some point in their lives. If a student indicates that they wish to do so, ask them what specific risk could be associated with owning a business.
    • Answers may vary. Businesses can fail for many reasons both inside and outside of their control. Owning a business is inherently risky because the majority of the loss will be to the owner.
  4. Introduce the FARMLAND movie clips outlined in the Materials section. The first clip describes the impact weather can have on farming. The second clip describes the impact fluctuating markets can have on farmers. Prior to showing the clips, tell students that farms are businesses owned by an individual or family. Farms produce our food, fiber and fuel. There are many risks to operating a farm. 
  5. As the students watch the video clip, ask them to take good notes on the clip as it is played.
  6. Have students discuss the risks mentioned in the movie. The main two elements discussed were the weather and the markets. Can students think of any ways to manage these risk elements? How do these elements compare to the risk scenarios they listed on the board?
    • Unlike many other risky situations, the weather and markets cannot be managed. Farmers have no control over the weather in their area, and can’t do much to avoid damage caused by the weather. Keeping track of the weather and learning from meteorologists can help farmers in the short term. Farmers also have no control over the markets, but they can market some commodities on the futures market to help manage risk. A bad marketing decision on the futures market, however, can be just as devastating as a significant drop in daily market price. Farmers can also manage market risk by selling to a processor or processing the commodity themselves, which adds value to the product (ex. Cracked corn has been processed and is more valuable because it is more easily digested by livestock).
  7. Invite students to share any ideas they have about the types of risk there might be in running a farm business. Then, tell them there are 5 main categories of agricultural risk: production risk, marketing risk, financial risk, legal risk, and human risk. Divide your class into five groups. Assign each group a specific risk from the Risk Management Fact Sheet references found below and give them a printout of their assigned pages:
    • Production Risk (Section 2, pages 8-14)
    • Marketing Risk (Section 3, pages 15-22)
    • Financial Risk (Section 4, pages 23-29)
    • Legal Risk (Section 5, pages 30-34)
    • Human Risk (Section 6, pages 35-39)
  8. Give students a specific amount of time to read the information they are given and to prepare a summary for the rest of the class. Ask each group of students to teach their classmates the key points of what they learned. 
  9. Ask students if they can think of any other risk farmers might have to deal with and what category they would fit into. Some answers may include:
    • Risk of damage to the environment through soil loss, water pollution, or wildlife habitat loss
    • The risks and alternatively the rewards of choosing an organic, non-GMO or conventional production style.
    • The agriculture industry faces risk as it tries to feed a growing population. Weather is a significant factor in the yield of a crop, and weather events can cause severe yield reduction that results in less food for people to eat
  10. Ask students if they would want to be a farmer based on the risk involved in farming. If they say no, introduce some of the careers in the agriculture industry that help farmers to manage their risk.
    • Crop insurance specialists work with farmers to select crop insurance for their farms, crops and livestock.
    • Agriculture lenders help farmers manage their money and business goals. Many necessary pieces of farm equipment, such as tractors, combines, barns or fencing, require thousands of dollars to purchase. Agriculture lenders help farmers to buy the necessary machinery and develop a plan for paying back loans.
    • Meteorologists may only appear on TV, but they are a very important part of agriculture. Understanding weather and weather predictions can help farmers plan in the short term, especially when they are looking to plant crops or move livestock into heated barns.
    • Agronomists study the interaction between soil, crops and environment. The knowledge and advice of agronomists can help farmers select the appropriate seed for their soil and climate so the crop has the best possible chance of being high-yielding.
    • Seed scientists study seeds and the genetics of seeds to create the best possible seeds. These can include GMO seeds that are bred to resist disease, insects and environmental issues.

Concept Elaboration and Evaluation

After conducting these activities, review and summarize the following key concepts:

  • Farms are businesses. Concepts of business including supply, demand, marketing, and managing risk are all important to the success of a farm which leads to providing food for our population.
  • Besides being a farmer, there are other careers such as insurance specialists, financial lenders, meteorologists, agronomists, and seed scientists who help farmers minimize their business risk.
  • The marketing, or sale of a farmer's crop, (plants or animals) depends on the demand created by consumer choices.
  • Some production methods, such as certified organic, have more risk involved for the farmer in producing and harvesting a successful crop. However, the added organic label could bring a higher premium at the market making the risk worthwhile.
Enriching Activities
  • Have students research an agriculture career that helps farmers manage risks. Have them write a one page paper on the career and be prepared to give a report on it to the entire class.

  • Have students rank the activities they listed at the beginning of the lesson in terms of relative level of risk. Students should recognize that some activities (smoking cigarettes) are more risky than others (eating a raw egg)

  • Discuss with students when risk starts and stops for various scenarios. For example, the risk of smoking cigarettes starts when you start smoking, but doesn’t end when you put out the cigarette, because the damage to your lungs is permanent. When you drive the car to work, the risk is present only as you drive. As soon as you park, the risk is gone.

Suggested Companion Resources
Author

Kelsey Faivre

Organization Affiliation

Iowa Agriculture Literacy Foundation

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