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Wheat Variety Selection: An Application of Portfolio Theory to Improve Returns

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  • Barkley, Andrew P.
  • Peterson, Hikaru Hanawa

Abstract

This presentation will report results of research that shows that a portfolio of wheat varieties can enhance profitability and reduce risk over the selection of a single variety. Many Kansas wheat farmers select varieties based on average yield. This study uses portfolio theory from business investment analysis to find the optimal, profit-maximizing and risk-minimizing combination of wheat varieties in Kansas.

Suggested Citation

  • Barkley, Andrew P. & Peterson, Hikaru Hanawa, 2008. "Wheat Variety Selection: An Application of Portfolio Theory to Improve Returns," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37597, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nccest:37597
    DOI: 10.22004/ag.econ.37597
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    File URL: https://ageconsearch.umn.edu/record/37597/files/confp03-08.pdf
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    References listed on IDEAS

    as
    1. Robert A. Collins & Peter J. Barry, 1986. "Risk Analysis with Single-Index Portfolio Models: An Application to Farm Planning," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 152-161.
    2. Andrew P. Barkley & Lori L. Porter, 1996. "The Determinants of Wheat Variety Selection in Kansas, 1974 to 1993," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 202-211.
    3. Peter J. Barry, 1980. "Capital Asset Pricing and Farm Real Estate," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(3), pages 549-553.
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    Cited by:

    1. Nalley, Lawton Lanier & Barkley, Andrew & Watkins, Brad & Hignight, Jeffery, 2009. "Enhancing Farm Profitability through Portfolio Analysis: The Case of Spatial Rice Variety Selection," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(3), pages 641-652, December.
    2. Kandulu, John M. & Bryan, Brett A. & King, Darran & Connor, Jeffery D., 2012. "Mitigating economic risk from climate variability in rain-fed agriculture through enterprise mix diversification," Ecological Economics, Elsevier, vol. 79(C), pages 105-112.
    3. Todor Stoilov & Krasimira Stoilova, 2022. "An Algorithm for Business Management Based on Portfolio Optimization," Mathematics, MDPI, vol. 10(22), pages 1-19, November.

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    Keywords

    Agricultural Finance;

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