Price and weather shock resilience calculator
How far can price and harvest fall before this cycle turns a loss?
Worked out by switching value, with the room measured against your own farm’s swing.
Your result
Enter the revenue you expect and the total cost to see the three room figures. With your own record, or with the typical swing, the index appears; with a drop to test, the result under shock appears.
As budgeted, this cycle already fails to pay for itself, before any shock at all. The room comes out negative because there is none: it says how far price and harvest have to rise to break even.
The equal fall in both at the same time that brings the result to zero. It is the smallest of the three, and it is the one that decides.
How far the price can fall, with the harvest coming in as you expect, before the cycle stops paying for itself.
How far the harvest can fall, at the price you expect. It is larger than the price figure because harvesting less also costs less.
How many swings of your own record fit inside that room. Below 1, a jolt the size of one you have already lived through wipes the margin out.
Result under the shock you picked
What is left of the cycle with that drop in price and harvest at the same time.
The map of the loss
Price drop →Each cell is a pair of falls. The line where green turns red is the edge of the loss.
What weighs on this reading
How this number was put togetherThere is no single, ready-made index of resilience to price and weather shocks, and this one is a declared composition of two open methods. The first is the switching value, which says how far the arithmetic can worsen before it reaches zero. The second is the spread of your own record, which says how big a bad year is on your farm. The index is the first divided by the second, and it is a distance, not a probability: saying the room is worth less than one swing is not saying there is such-and-such a percent chance of a loss. The arithmetic also assumes price and harvest falling together, which is the right case for a farm far from the center of the market and a pessimistic one for a farm inside it.
Take the cycle’s endurance sheet
The report carries your three room figures with a reading for each, the index against your own record, the whole map of the loss with its step written out, the result of the shock you tested and the method caveat, in a document you can print and take to the table where the call gets made.
Done.
You will get the next management article by email. Your report is below.
Enter the revenue you expect and the total cost to generate the report.
Room is how far a figure can worsen before the cycle stops paying. Enter the revenue you expect, the total cost and the part of the cost that moves with the harvest, and see the room on price, the room on yield and the room with both at once, plus the whole map of the loss and what that room is worth measured against your own years.
A cycle expecting 900,000 of revenue against 720,000 of cost leaves 180,000, and that room absorbs a 20 percent fall in price alone, a 23.1 percent fall in harvest alone, but only 11.4 percent of each when both fall in the same year, about half of either one on its own.
Read against eight years of this farm’s own prices and yields, that same room held only 0.84 of an ordinary bad year, which is why the tool asks for your own history rather than a generic band, following the USDA method for measuring price and yield risk. A margin that looks comfortable against one shock can vanish against two.