ABSTRACT
Ranching is bedeviled by more hazards than a Marine Corps obstacle course—drought and flood, searing heat and freezing cold, gusty winds, flailing hail, and drifting snow from weather alone. The greatest single cost, realized or unrealized in a ranching operation on privately owned lands, usually is the cost per animal unit for grazing. If one is paying a cash lease for grazing land, it is easy to see that the land cost per animal unit would be the lease paid. Prolonged, severe, and frequent or continuous grazing reduces leaf area and food production, forage and root growth, moisture absorption, and soil protection. Preferred plants lose vigor from abuse and are replaced by less palatable and productive plants that escape grazing pressure and by more bare ground. Marketing is the traditional area of concentration in risk management. Within that area, the term has become almost synonymous with the use of commodities futures in hedging.
