ECONOMIC EVALUATION OF INCOME PROTECTION CHOICES FOR WEST TENNESSEE CORN PRODUCERS
James Larson () and
Jeffrey Stokes ()
No 21842, 2000 Annual meeting, July 30-August 2, Tampa, FL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)
Farmers need information about the expected value and variability of net revenues for alternative crop insurance and futures hedging strategies to manage risk. Specifically, the model will determine which risk management strategies are most desirable under various levels of risk aversion. The unstable futures basis relation in the data used in the simulation model contributed to increased variability of net revenues. In general, none of the crop insurance or hedging strategies markedly reduced variability of net revenue and relative riskiness when compared with the cash strategy. Revenue Assurance strategies were the most effective at setting a floor on net revenues. As a result, Revenue Assurance products may perform well for extremely risk averse producers.
Keywords: Marketing; Risk and Uncertainty (search for similar items in EconPapers)
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