An Economic Risk Analysis of Stocker Grazing on Conservation Tillage Small Grains Forage in Arkansas

K. Bradley Watkins, Jeffrey A. Hignight, Paul A. Beck, Merle M. Anders, Hubbell, Donald S., and Shane Gadberry

No 56356, 2010 Annual Meeting, February 6-9, 2010, Orlando, Florida from Southern Agricultural Economics Association

Abstract: This study evaluates both the profitability and risk efficiency of grazing stocker steers on conservation tillage winter wheat pasture using simulation and stochastic efficiency with respect to a function (SERF). Average daily gains are simulated for steers grazed on conventional tillage (CT), reduced tillage (RT) and no-till (NT) winter wheat pasture. Steer price distributions and prices for key production inputs such as diesel, fertilizer, and glyphosate are also simulated. Stocker steer net return distributions by tillage treatment are constructed and ranked for risk efficiency using SERF. The results indicate the NT system is the most profitable and most risk efficient of the three tillage systems, followed by the RT system. Both conservation tillage systems dominate the CT system under risk aversion based on SERF analysis and generate positive risk premiums for risk-averse cattle producers above the CT system.

Keywords: Farm Management; Production Economics (search for similar items in EconPapers)
Pages: 33
Date: 2010-02
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:saea10:56356

DOI: 10.22004/ag.econ.56356

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