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PR - Quantifying The Sources Of Dairy Farm Business Risk And Understanding The Implications For Risk Management Strategies

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  • Chang, Hung-Hao
  • Boisvert, Richard N.
  • Tauer, Loren W.

Abstract

The major sources of variability of net farm income on individual New York dairy farms over the past 10 years are identified using methods in variance decomposition. The most important source of income variability is the fluctuation in the price of milk received by farmers, followed closely by year-to-year variation in the quantity of feed purchased. The degree of success in engaging in activities that increase diversification that lead to a reduction in the variance in farm income is higher for older farmers and for those that milk in a milking parlor, use recombinant bovine somatotropin, have greater assets per cow, and have engaged in activities to earn income from off-farm sources.

Suggested Citation

  • Chang, Hung-Hao & Boisvert, Richard N. & Tauer, Loren W., 2007. "PR - Quantifying The Sources Of Dairy Farm Business Risk And Understanding The Implications For Risk Management Strategies," 16th Congress, Cork, Ireland, July 15-20, 2007 345363, International Farm Management Association.
    • Handle: RePEc:ags:ifma07:345363
    DOI: 10.22004/ag.econ.345363
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    1. Oscar R. Burt & Robert M. Finley, 1968. "Statistical Analysis of Identities in Random Variables," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 50(3), pages 734-744.
    2. Boisvert, Richard N. & Bills, Nelson L., 1984. "Variability Of New York'S Agricultural Use Values And Its Implications For Policy," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(2), pages 1-10, October.
    3. Boisvert, Richard N. & McCarl, Bruce, 1990. "Agricultural Risk Modeling Using Mathematical Programming," Research Bulletins 183294, Cornell University, Department of Applied Economics and Management.
    4. 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.
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