IDEAS home Printed from https://ideas.repec.org/a/ags/ifaamr/8192.html
   My bibliography  Save this article

Bio-ethanol Production from Wheat in the Winter Rainfall Region of South Africa: A Quantitative Risk Analysis

Author

Listed:
  • Richardson, James W.
  • Lemmer, Wessel J.
  • Outlaw, Joe L.

Abstract

Contrary to developments in other parts of the world, South Africa has not developed a bio-ethanol industry. The objective was to quantify the risks and economic viability of a wheat based bio-ethanol plant in the winter rainfall region of South Africa. Monte Carlo simulation of a bio-ethanol plant was used to quantify the risk that investors will likely face. Under the Base scenario a 103 million liter bio-ethanol plant would not offer a reasonable chance of being economically viable. Alternative price enhancing policies were analyzed to determine policy changes needed to make a bio-ethanol plant economically viable in the region.

Suggested Citation

  • Richardson, James W. & Lemmer, Wessel J. & Outlaw, Joe L., 2007. "Bio-ethanol Production from Wheat in the Winter Rainfall Region of South Africa: A Quantitative Risk Analysis," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 10(2), pages 1-24.
    • Handle: RePEc:ags:ifaamr:8192
    DOI: 10.22004/ag.econ.8192
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/8192/files/20071011_Formatted_BP.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.8192?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. J. Brian Hardaker & James W. Richardson & Gudbrand Lien & Keith D. Schumann, 2004. "Stochastic efficiency analysis with risk aversion bounds: a simplified approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 253-270, June.
    2. Richardson, James W. & Mapp, Harry P., Jr., 1976. "Use Of Probabilistic Cash Flows In Analyzing Investments Under Conditions Of Risk And Uncertainty," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 8(2), pages 1-6, December.
    3. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    4. repec:ags:joaaec:v:32:y:2000:i:2:p:299-315 is not listed on IDEAS
    5. Tiffany, Douglas G. & Eidman, Vernon R., 2003. "Factors Associated With Success Of Fuel Ethanol Producers," Staff Papers 14155, University of Minnesota, Department of Applied Economics.
    6. Klose, Steven L. & Anderson, David P. & Outlaw, Joe L. & Herbst, Brian K. & Richardson, James W., 2003. "The Feasibility Of Ethanol Production In Texas," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35181, Southern Agricultural Economics Association.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amigun, Bamikole & Petrie, Daniel & Görgens, Johann, 2011. "Economic risk assessment of advanced process technologies for bioethanol production in South Africa: Monte Carlo analysis," Renewable Energy, Elsevier, vol. 36(11), pages 3178-3186.
    2. Vosloo, Jodie, 2021. "A profitability and risk assessment of market strategies for potato producers in South Africa," Research Theses 334757, Collaborative Masters Program in Agricultural and Applied Economics.
    3. Asci, Serhat & Borisova, Tatiana & VanSickle, John J., 2014. "Risks in Potato Production: Fertilizer, Water, and Producers’ Decision Making," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162536, Southern Agricultural Economics Association.
    4. Maisashvili, Aleksandre & Bryant, Henry L. & Richardson, James W., 2016. "Economic feasibility of tobacco leaves for biofuel production and high value squalene," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(4), September.
    5. Andrew, Rogers & Makindara, Jeremia & Mbaga, Said H. & Alphonce, Roselyne, 2019. "Economic viability of newly introduced chicken strains at village level in Tanzania: FARMSIM model simulation approach," Agricultural Systems, Elsevier, vol. 176(C).
    6. Dlamini, Thula S. & Fraser, Gavin C.G., 2010. "Economics of Meat Production from the Springbuck in the Eastern Cape Karoo," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96181, African Association of Agricultural Economists (AAAE).
    7. Morris, Brittany D. & Richardson, James W. & Frosch, Brian J. & Outlaw, Joe L. & Rooney, William L., 2009. "Economic Feasibility of Ethanol Production from Sweet Sorghum Juice in Texas," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46852, Southern Agricultural Economics Association.
    8. Zapata, Samuel D. & Ribera, Luis A. & Palma, Marco A., 2017. "Effect Of Production Parameters On The Economic Feasibility Of A Biofuel Enterprise," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(3), pages 347-362, August.
    9. Robus, Charles L.L. & Gottumukkala, Lalitha Devi & van Rensburg, Eugéne & Görgens, Johann F., 2016. "Feasible process development and techno-economic evaluation of paper sludge to bioethanol conversion: South African paper mills scenario," Renewable Energy, Elsevier, vol. 92(C), pages 333-345.
    10. Vorotnikova, Ekaterina & Borisova, Tatiana & VanSickle, John J., 2014. "Evaluation of the profitability of a new precision fungicide application system for strawberry production," Agricultural Systems, Elsevier, vol. 130(C), pages 77-88.
    11. Yi, Fujin & Lin, C.-Y. Cynthia & Thome, Karen, 2013. "An Analysis of the Effects of Government Subsidies and the Renewable Fuels Standard on the Fuel Ethanol Industry: A Structural Econometric Model," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150224, Agricultural and Applied Economics Association.
    12. Asci, Serhat & VanSickle, John J. & Cantliffe, Daniel J., 2014. "Risk in Investment Decision Making and Greenhouse Tomato Production Expansion in Florida," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(4), pages 1-26, November.
    13. Kim, Man-Keun & Curtis, Kynda R. & Yeager, Irvin, 2014. "An Assessment of Market Strategies for Small-Scale Produce Growers," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(3), pages 1-18, September.
    14. Asci, Serhat & Konduru, Srini & Williams, Lynn, 2020. "Potential of Solar Energy in Agricultural Production in Caribbean Countries," Farm and Business - The Journal of the Caribbean Agro-Economic Society, Caribbean Agro-Economic Society, vol. 12(1), December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lau, Michael H. & Richardson, James W. & Outlaw, Joe L. & Fuller, Stephen W. & Nixon, Clair J. & Herbst, Brian K., 2004. "Location Of A Mixalco Production Facility With Respect To Economic Viability," 2004 Annual meeting, August 1-4, Denver, CO 20025, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Asci, Serhat & VanSickle, John J. & Cantliffe, Daniel J., 2014. "Risk in Investment Decision Making and Greenhouse Tomato Production Expansion in Florida," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 17(4), pages 1-26, November.
    3. Amigun, Bamikole & Petrie, Daniel & Görgens, Johann, 2011. "Economic risk assessment of advanced process technologies for bioethanol production in South Africa: Monte Carlo analysis," Renewable Energy, Elsevier, vol. 36(11), pages 3178-3186.
    4. Ribera, Luis A. & Outlaw, Joe L. & Richardson, James W. & Silva, Jorge A. da & Bryant, Henry L., 2007. "Mitigating the Fuel and Feed Effects of Increased Ethanol Production Utilizing Sugarcane," Biofuels, Food and Feed Tradeoffs Conference, April 12-13, 2007, St, Louis, Missouri 313700, Farm Foundation.
    5. Asci, Serhat & Konduru, Srini & Williams, Lynn, 2020. "Potential of Solar Energy in Agricultural Production in Caribbean Countries," Farm and Business - The Journal of the Caribbean Agro-Economic Society, Caribbean Agro-Economic Society, vol. 12(1), December.
    6. Morris, Brittany D. & Richardson, James W. & Frosch, Brian J. & Outlaw, Joe L. & Rooney, William L., 2009. "Economic Feasibility of Ethanol Production from Sweet Sorghum Juice in Texas," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 46852, Southern Agricultural Economics Association.
    7. Benavidez, Justin R. & Thayer, Anastasia W. & Anderson, David P., 2019. "Poo Power: Revisiting Biogas Generation Potential on Dairy Farms in Texas," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 51(4), pages 682-700, November.
    8. Falconer, Lawrence L. & Richardson, James W., 2013. "Economic Analysis of Crop Insurance Alternatives Under Surface Water Curtailment Uncertainty," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142990, Southern Agricultural Economics Association.
    9. Asci, Serhat & Borisova, Tatiana & VanSickle, John J., 2015. "Role of economics in developing fertilizer best management practices," Agricultural Water Management, Elsevier, vol. 152(C), pages 251-261.
    10. Lyman, Nathaniel & Nalley, Lawton Lanier, 2013. "Stochastic Valuation of Hybrid Rice Technology in Arkansas," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142505, Southern Agricultural Economics Association.
    11. Frikkie Maré & Bennie Grové & Johan Willemse, 2017. "Evaluating the long-term effectiveness of crop insurance products to provide cost effective and constant cover for maize producers under stochastic yields and prices," Agrekon, Taylor & Francis Journals, vol. 56(3), pages 233-247, July.
    12. Hristovska, Tatjana & Watkins, K. Bradley & Anders, Merle M., 2012. "An Economic Risk Analysis of No-till Management for the Rice-Soybean Rotation System used in Arkansas," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119676, Southern Agricultural Economics Association.
    13. Fumasi, Roland J. & Klose, Steven L. & Kaase, Greg H. & Richardson, James W. & Outlaw, Joe L., 2008. "Viability of cellulosic feedstock production from producer to biorefinery," Integration of Agricultural and Energy Systems Conference, February 12-13, 2008, Atlanta, Georgia 48716, Farm Foundation.
    14. Lien, Gudbrand D. & Flaten, Ola & Schumann, Keith D. & Richardson, James W. & Korsaeth, Audun & Eltun, Ragnar, 2005. "Comparison of Risk Between Cropping Systems in Eastern Norway," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24663, European Association of Agricultural Economists.
    15. Asci, Serhat & VanSickle, John J. & Fry, Curtiss J. & Thomas, John, 2015. "Where is Risk in Fumigation Choice: Methyl Bromide versus Alternatives?," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196862, Southern Agricultural Economics Association.
    16. Williams, Jeffery R. & Llewelyn, Richard V. & Pendell, Dustin L. & Schlegel, Alan J. & Troy, Dumler, 2009. "A Risk Analysis of Converting CRP Acres to a Wheat-Sorghum-Fallow Rotation," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 45985, Southern Agricultural Economics Association.
    17. Elrod, Christopher P. & Robinson, John R.C. & Richardson, James W., 2008. "Simulation of Alternative Marketing Strategies for U.S. Cotton," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6885, Southern Agricultural Economics Association.
    18. Ibrahim L. Kadigi & Khamaldin D. Mutabazi & Damas Philip & James W. Richardson & Jean-Claude Bizimana & Winfred Mbungu & Henry F. Mahoo & Stefan Sieber, 2020. "An Economic Comparison between Alternative Rice Farming Systems in Tanzania Using a Monte Carlo Simulation Approach," Sustainability, MDPI, vol. 12(16), pages 1-22, August.
    19. Lien, G. & Stordal, S. & Hardaker, J.B. & Asheim, L.J., 2007. "Risk aversion and optimal forest replanting: A stochastic efficiency study," European Journal of Operational Research, Elsevier, vol. 181(3), pages 1584-1592, September.
    20. Bizimana, Jean-Claude & Richardson, James W., 2018. "Agricultural Technology Assessment for Smallholder Farms in Developing Countries: An Analysis using a Farm Simulation Model (FARMSIM)," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266589, Southern Agricultural Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ifaamr:8192. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ifamaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.