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The Impacts of Farm Size and Economic Risk on No-Till Rice Whole-Farm Profitability

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  • Watkins, K. Bradley
  • Hignight, Jeffrey A.
  • Anders, Merle M.

Abstract

This study evaluated the impacts of farm size and stochastic return variability on no-till (NT) rice profitability at the whole-farm level. Mixed integer programming was used to determine optimal machinery complements, fuel consumption, and machinery labor requirements for conventional till (CT) and NT rice-soybean farms of 1200, 2400, and 3600 acres in size. Crop yields, market prices, and prices for key production inputs were simulated to construct stochastic whole-farm net returns for each farm size under CT and NT management, and both first and second degree stochastic dominance analysis were used to rank cumulative distribution functions of whole-farm returns according to specified risk preferences. The results indicate NT farms exhibit second degree stochastic dominance over CT farms regardless of farm size, and high input prices have less downward effect on the profitability of NT farms relative to CT farms.

Suggested Citation

  • Watkins, K. Bradley & Hignight, Jeffrey A. & Anders, Merle M., 2011. "The Impacts of Farm Size and Economic Risk on No-Till Rice Whole-Farm Profitability," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98733, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea11:98733
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    File URL: http://ageconsearch.umn.edu/record/98733/files/Watkins%202011.pdf
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    Cited by:

    1. Hasan, Boboev & Higano, Yoshiro & Yabar, Helmut & Devkota, Mina & Lamers, John P. A., 2015. "Conservation Agriculture Practices in Salt-Affected, Irrigated Areas of Central Asia: Crop Price and Input Cost Variability Effect on Revenue Risks," Sustainable Agriculture Research, Canadian Center of Science and Education, vol. 4(2).
    2. Goeringer, L. Paul & Goodwin, Harold L., Jr. & Dixon, Bruce L. & Popp, Michael P., 2013. "EnVesting in an Agricultural Legacy: Design and Implementation of a Targeted Young and Beginning Farmer Loan Program in Arkansas," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143037, Southern Agricultural Economics Association.

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    Keywords

    Farm Management; Production Economics; Risk and Uncertainty;

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