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Mitigating Price and Yield Risk Using Revenue Protection and Agriculture Risk Coverage

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  • Biram, Hunter D.
  • Coble, Keith H.
  • Harri, Ardian
  • Park, Eunchun
  • Tack, Jesse

Abstract

This article evaluates Agriculture Risk Coverage (ARC) and Revenue Protection (RP) used in conjunction as an optimal risk management strategy for representative producers in the Corn Belt and Mississippi Delta. Using a simulation procedure to produce representative farm revenues, we find it is optimal under expected utility for producers to enroll in RP, despite having RP through ARC. Results are robust across alternative sampling methods and regions. These findings imply that ARC is better suited as a complementary program, and that it is optimal for a producer to enroll in higher coverage levels than we currently observe.

Suggested Citation

  • Biram, Hunter D. & Coble, Keith H. & Harri, Ardian & Park, Eunchun & Tack, Jesse, 2022. "Mitigating Price and Yield Risk Using Revenue Protection and Agriculture Risk Coverage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 54(2), pages 319-333, May.
    • Handle: RePEc:cup:jagaec:v:54:y:2022:i:2:p:319-333_7
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    Cited by:

    1. Bhattarai, Chandan & McKenzie, Andrew M. & Biram, Hunter D. & Durand-Morat, Alvaro, 2023. "Risk-Returns of forward contracting southern row crops with crop revenue insurance," 2023 Annual Meeting, July 23-25, Washington D.C. 335663, Agricultural and Applied Economics Association.

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