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A Risk Analysis of Adjusted Gross Revenue-Lite on Beef Farms

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  • Williams, Jeffery R.
  • Saffert, Andrew T.
  • Barnaby, G. Art
  • Llewelyn, Richard V.
  • Langemeier, Michael R.

Abstract

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.

Suggested Citation

  • Williams, Jeffery R. & Saffert, Andrew T. & Barnaby, G. Art & Llewelyn, Richard V. & Langemeier, Michael R., 2014. "A Risk Analysis of Adjusted Gross Revenue-Lite on Beef Farms," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(2), pages 227-244, May.
    • Handle: RePEc:cup:jagaec:v:46:y:2014:i:02:p:227-244_00
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    References listed on IDEAS

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    1. Miller, J. Corey & Coble, Keith H. & Barnett, Barry J., 2000. "Investigating The Implications Of Multi-Crop Revenue Insurance For Producer Risk Management," Professional Presentations 15802, Mississippi State University, Department of Agricultural Economics.
    2. Dismukes, Robert & Durst, Ron L., 2006. "Whole-Farm Approaches to a Safety Net," Economic Information Bulletin 33893, United States Department of Agriculture, Economic Research Service.
    3. Dismukes, Robert & Coble, Keith H., 2007. "Managing Risk With Revenue Insurance," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-6, May.
    4. Fields, Deacue & Gillespie, Jeffrey, 2008. "Beef Producer Preferences and Purchase Decisions for Livestock Price Insurance," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(3), pages 789-803, December.
    5. Barham, E. Hart Bise & Robinson, John R.C. & Richardson, James W. & Rister, M. Edward, 2011. "Mitigating Cotton Revenue Risk Through Irrigation, Insurance, and Hedging," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 43(4), pages 1-12, November.
    6. Jeffrey R. Stokes & William I. Nayda & Burton C. English, 1997. "The Pricing of Revenue Assurance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 439-451.
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    Cited by:

    1. Yangxuan Liu & Michael R. Langemeier & Ian M. Small & Laura Joseph & William E. Fry & Jean B. Ristaino & Amanda Saville & Benjamin M. Gramig & Paul V. Preckel, 2018. "A Risk Analysis of Precision Agriculture Technology to Manage Tomato Late Blight," Sustainability, MDPI, Open Access Journal, vol. 10(9), pages 1-1, August.
    2. Liu, Yangxuan & Langemeier, Michael & Small, Ian & Joseph, Laura & Fry, William, 2015. "Risk management strategies using potato precision farming technology," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205417, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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