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Financial Risk in Cotton Production

Paul N. Wilson and Carl E. Gundersen

Journal of Agricultural and Applied Economics, 1985, vol. 17, issue 2, 199-206

Abstract: Risk analysis continues to emphasize price and yield variability as the principal components of the decisionmaker's risk environment. This research demonstrates the relative importance of financial risk for a representative cotton farm in Arizona. For highly leveraged operations, financial risk may account for 70 percent of the total risk faced by the producer. Implications for future risk analysis are discussed in light of these findings.

Date: 1985
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