?Choosing your crops may simply be based on the experience of the management team, which is a good way to go. With a team that has wide experience, however, you may want to consider producing many different crops in the attempt to maximize your revenue and profitability at all times. Multiple Crops as a Hedge With food prices as volatile as they are, an individual farm is generally at the mercy of the market as to whether they will make a profit in any given year for their crops. Planting or producing multiple, different crops can allow you to create a portfolio of sorts, hedging against the possibility of price decreases for any one of your products. If prices drop in one and you will not be able to produce that crop profitably, you can reasonable transfer some of your labor capacity to increase production on another. Specialized Assets However, switching from crop to crop will never work just like rebalancing an investment portfolio. For one thing, the cost of switching the use of your land may be prohibitive if it will require extensive work. Also, retraining staff may be necessary to prepare them to work on an unfamiliar crop, creating another cost. Finally, the equipment and tools you own may be only useful for specific crops, and selling them off may return only a small percentage of their original value once the cost of selling is included. These assets (land, human resources, and equipment) can be too specialized to be re-purposed in this way without forethought. If you plan to use a multiple crop system as a hedging mechanism as described here, think through how you can avoid the pitfalls of specialized assets before you launch. Perhaps you can rent or lease rather than buy your equipment to reduce your investment in it, and hire workers who are trained for multiple crops or are quick learners to ease transitions. You will also need a savvy sense of the commodities markets and an ear to the ground on coming trends to know when it is time to shift capacity or to abandon a crop altogether. Are you looking for more tips on how to open a farm or advice on developing your farm business plan? Call 877-BIZ-PLAN to learn how Growthink can help you build your farm business.