Date of this Version
Cornhusker Economics, April 15, 2020
COVID-19 is causing us to experience events that have always been possible, just not yet observed. For farmers these events may have a big negative financial impact, or they may not. The impact on each individual farm has to do with how that individual farm has prepared for rare financially devastating events. Preparing for unseen events represents a logical approach. We call this approach stress testing. Just because you have not seen an event, it does not mean it does not exist. Or said another way, absence of evidence is not evidence of absence. In this article, we discuss how to consider and plan for rare events.