Analysis of economic risk in potatoes cultivation

Milan Cizek, Miroslav Mimra, Miroslav Kavka and Jaroslav Humpal
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Milan Cizek: Potato Research Institute Havlíčkův Brod, Havlíčkův Brod, Czech Republic
Miroslav Mimra: Department of Machinery Utilisation, Faculty of Engineering, Czech University of Life Sciences Prague, Prague, Czech Republic
Miroslav Kavka: Department of Machinery Utilisation, Faculty of Engineering, Czech University of Life Sciences Prague, Prague, Czech Republic
Jaroslav Humpal: Institute of Agricultural Economics and Information, Prague, Czech Republic

Agricultural Economics, 2019, vol. 65, issue 7, 331-339

Abstract: A number of variables influences potatoes growing, including natural conditions, used growing technologies and market conditions. The most important parameters for the production of potatoes crops are yield, farmer's price, subsidies and costs. All these parameters can change over time. This means that managers of farms must constantly assess the key parameters affecting the economic outturn and analyse the degree of risk of their achievement. This article analyses the economic risks of potatoes cultivation based on statistical data obtained over the last 10 years. The Monte Carlo stochastic simulation method was used to analyse the risk of gross profits. The results of the calculations confirmed the considerable variability and risk of growing potatoes in the climate conditions of the Czech Republic in general, and especially regarding the first early potatoes and potatoes for starch production.

Keywords: break-even point; gross profit; Monte Carlo method; risk analysis (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:65:y:2019:i:7:id:319-2018-agricecon

DOI: 10.17221/319/2018-AGRICECON

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