Recognizing Risk in Global Agriculture: A Summary of the 2011 Agricultural Symposium

In agriculture, record profits usually are fleeting; farm booms historically are followed by farm busts. The recent rebound in agriculture’s profitability combined with projections of burgeoning global demand for food, fiber, and fuel suggest the industry has entered a new “golden era.” Still, the glint of banner profits in agriculture could turn out to be fool’s gold. While many in agriculture have enjoyed booming profits in recent years, market risks also have soared amid high and volatile commodity prices. On July 19 and 20, 2011, almost 200 agricultural finance and business leaders examined the threats to agriculture’s ability to maintain its recent profitability at the Federal Reserve Bank of Kansas City’s symposium, “Recognizing Risk in Global Agriculture.” The symposium in Kansas City began with a discussion of the risks agriculture faces in regard to food and fuel. Participants then explored the financial health of the agricultural sector and its ability to weather unexpected downturns in profits. Finally, the discussion addressed how agriculture was managing risks in a profitable, but highly volatile environment. Despite elevated risks, participants were cautiously optimistic that