FARRM: A Holistic Risk Management Simulation Game “The thrill of victory, the agony of defeat” Kim Anderson J.C. Hobbs Oklahoma State University
FARRM: A Holistic Risk Management Simulation Game
“The thrill of victory, the agony of defeat”
Kim Anderson
J.C. Hobbs
Oklahoma State University
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We had a plan
Game to be the “hook”Resource allocationMarketingBudgetsFinancial analysisRisk management
Develop a risk management workshop
FARRM
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Wheat & Stockers640 acres of owned crop land640 acres of rented crop land0.5 head/acre winter grazing1.5 head/acre grazeout
Paper FARRM
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Gains from Marshal Pasture ResearchYields from county and farm recordsPrices
Paper FARRM
CashForward contractFuturesOption premiums
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Marketing alternativesCashFuturesOptionsWheat storage
Paper FARRM
Enterprise budgets
ChartsYearend summary
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July Crop and Stocker Selection.September Wheat crop insurance.September Sell grain sorghum.November Sell cotton, stored wheat.January Stocker marketing risk decisions.March Sell March stockers.April Wheat marketing risk decisions.May Sell May stockers.June Wheat sell/storage/marketing
decisions.
Paper FARRM decisions
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Great results
Paper FARRM
NegativeSpent most of the time calculating resultsComputational errors detracted fromlearning
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By “hook” & by “crook”Programmed in Visual BasicUsed MS Access for dataBuilt FARRM in sectionsAdded crop insuranceAdded cash flow sheet & analysis
Computer-FARRM
Unable to obtain funding
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StockersOctober – MarchOctober – May grazeout
Computer-FARRM
WheatPre-harvest strategiesPost-harvest strategies
CottonGrain Sorghum
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Wheat to sorghum/cottonSorghum/cotton on owned land only.Double crop wheat to S/C from grazeout.Skip one wheat crop to go to S/C
Computer-FARRM
Sorghum/cotton to wheatNo winter grazingCan grazeout
Rules
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RulesStockers
Grazeout on owned acres only.Winter grazing .5 hd/ac. or 2 ac/hd.Grazeout 1.5 hd/ac.
Computer-FARRM
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Very SuccessfulExpanded time for teachingMost participants enjoyed model
ProducersHigh school students
Computer-FARRM
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Problems120+ MS Access filesOnly 4.5 years run timeGremlinsAestheticsSupporting material
Computer-FARRM
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Increase from 5 years to 15 yearsLotus 1,2,3 data format
1 workbook with 5 sheets
Improve looksImprove ease of use
Computer-FARRM V. 2
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$12,000 programming$2,000 data collection$1,000 travel & supplies
Computer-FARRM V. 2
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Hired programmerJunior CIS majorFound and recommended by . . .
Computer-FARRM V. 2
ProvidedOfficeComputerLaptop
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Programmer problems
Still worked but productivity declined
Computer-FARRM V. 2
Good progress
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Potential for FARRM
Computer-FARRM V. 2
High school ag students
Model for other statesRelatively easy to insert
enterprisesData modification
relatively easy
Producer risk management workshops
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Programming is expensive.
Lessons learned
Good reliable programmers are hard to find.
Model development takes time—years.
Supervising is frustrating unless you know how to program.
Computer games may be used to “set the hook” for teaching risk management.
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Go Cowboys