The environment which is currently being faced by farmers in New Zealand is much more risky than it was a decade ago, and the relative importance of different sources of risk has changed over the period. It is likely that a variety of risk management strategies are being adopted in response to these changes. In this paper, some basic ideas on risk are outlined. The risk environment of New Zealand farming is outlined, definitions of risk are explored, and the different sources of risk are discussed. The idea that there is a maximum level of risk which can be tolerated is considered, and the implications of this for risk adjustments by farmers is outlined. A range of risk management strategies are discussed, and the linkage between sources of risk and responses to risk is considered. On the basis of this discussion, some concluding comments are made on the attributes of farmers who are likely to be successful managers of risk.