05/29/2026
šThe Climate is Risky Business ā
Farmers today face an increasingly unpredictable production environment, and many are reāevaluating how they approach risk management and agricultural policy as a result. To better understand this uncertainty, Natalie Loduca, clinical assistant professor in Agricultural and Consumer Economics at Illinois, is examining how producers make decisions and how riskāaverse they are in their operations.
Working with Scott Swinton, professor emeritus of agricultural economics at MSU, Loduca studied how participants respond to theoretical risk and reward. Farmers first completed monetary lottery choices, followed by assessments of realāworld management decisions and yieldāimpact scenarios. The results were consistent: farmers tended to be risk averse across both types of decisions.
As Loduca explains, āMore riskāaverse farmers may be more likely to invest in adaptive technologies that reduce exposure to climateādriven yield risk.ā These insights have meaningful implications for policymakers and industry leaders alike.
Building on this work, Loduca and Swinton are now exploring how farmersā stated risk preferences align with their actual crop production decisionsāa connection that could help shape more effective support programs and onāfarm tools.
Read more about the study here: https://ow.ly/3V0e50Z5kL2