Analyzing Crop Revenue Safety Net Program Alternatives and Implications on Marketing Decisions

Jim A. Jansen and Bradley D. Lubben

No 285782, 2012 Conference, April 16-17, 2012, St. Louis, Missouri from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: This study evaluates the crop revenue effects of combining federal farm income safety net programs, crop insurance policies, and marketing arrangements. Eight representative farms across Nebraska are used to stochastically simulate the financial impact of nine risk management strategies to determine the optimal outcome during the 2011 production year. Procedures utilized to evaluate the stochastic results included the Expected Value, Coefficient of Variation, Stochastic Dominance, StopLight, and Stochastic Efficiency with Respect to a Function. Results indicate that out of the set of predefined strategies, the portfolio combination involving the government program choice of the Direct and Counter-Cyclical Program, crop revenue insurance with the fall harvest option, and hedging for the simulated time period provides the optimal outcome across the majority of representative farm scenarios in 2011.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2012-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:n13412:285782

DOI: 10.22004/ag.econ.285782

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