An application of agribusiness strategic planning under risk

Due to the character of the original source materials and the nature of batch digitization, quality control issues may be present in this document. Please report any quality issues you encounter to digital@library.tamu.edu, referencing the URI of the item.Includes bibliographical references (leaves 104).Issued also on microfiche from Lange Micrographics.Agriculture entered a new era with the passage of the 1996 FAIR Act. This new era will likely be associated with increasing risk factors that agribusiness managers must consider in developing appropriate management strategies. Managers who can anticipate the changes in the economic environment and correctly alter their decisions to maximize returns, given an acceptable level of risk will likely improve the agribusiness's chances of success. The objective of this research is to evaluate an agribusiness's strategic plan in a risky economic environment. A firm level, financial risk analysis model (FRAN) will be used to quantify the probabilistic economic outcomes resulting from alternative equity management decisions. The analysis will provide the decision-makers with a tool to evaluate alternative equity management plans of action. Managers will be able to evaluate the likelihood of adverse risk and the benefits of transferring risk to other parties. This case study was applied to a multi-divisional cooperative on the high plains of Texas to validate the model's ability to reasonably reflect the economic activity of the cooperative. Alternative equity management strategies were analyzed and presented to the board of trustees and manager. These decision-makers found the risk management assessment to be valuable in their decision making process