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Economic Evaluation Of Income Protection Choices For West Tennessee Corn Producers

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  • Philpot, Walter
  • Larson, James A.
  • Stokes, Jeffrey R.

Abstract

Farmers need information about the expected value and variability of net revenues for alternative crop insurance and futures hedging strategies to manage risk. Specifically, the model will determine which risk management strategies are most desirable under various levels of risk aversion. The unstable futures basis relation in the data used in the simulation model contributed to increased variability of net revenues. In general, none of the crop insurance or hedging strategies markedly reduced variability of net revenue and relative riskiness when compared with the cash strategy. Revenue Assurance strategies were the most effective at setting a floor on net revenues. As a result, Revenue Assurance products may perform well for extremely risk averse producers.

Suggested Citation

  • Philpot, Walter & Larson, James A. & Stokes, Jeffrey R., 2000. "Economic Evaluation Of Income Protection Choices For West Tennessee Corn Producers," 2000 Annual meeting, July 30-August 2, Tampa, FL 21842, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea00:21842
    DOI: 10.22004/ag.econ.21842
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    References listed on IDEAS

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    1. G. Hanoch & H. Levy, 1969. "The Efficiency Analysis of Choices Involving Risk," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(3), pages 335-346.
    2. Arthur H. Grube, 1986. "Participation in Farm Commodity Programs: A Stochastic Dominance Analysis: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 185-188.
    3. Allan W. Gray & James W. Richardson & Jackie McClaskey, 1995. "Farm-Level Impacts of Revenue Assurance," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 17(2), pages 171-183.
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    Cited by:

    1. Rios, Ana R. & Patrick, George F., 2004. "A Comparison Of Risk Management Strategies For Indiana Grain Producers," 2004 Annual meeting, August 1-4, Denver, CO 20192, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Marketing; Risk and Uncertainty;

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