Now that you have a basic understanding of risk and risk management principles, let’s put your knowledge to work.
You now own a farm/ranch, called the RULazy2, which you will run for six years. Over that period, you will make a series of management decisions and face the economic consequences of those decisions.
You should try to make money on your farm/ranch, because if a farm does note make money, it will eventually fail. Your profitability will depend on 1) your decisions and 2) uncontrollable chance. So, to be successful, you need to make good decisions and be a little bit lucky.
Here in Lesson 4, you will make decisions for Years 1-3. Then, you will learn about Federal crop insurance programs before returning to the game in Lesson 7, where you will make decisions for Years 4-6.
For reference, here are some points to consider as you make your decisions:
- As in real life, you are likely to see ups and downs in terms of your production and prices across the six years.
- You have a line of credit at your local bank, so you can go in the hole; however, you should be careful in counting on debt for your success.