IDEAS home Printed from https://ideas.repec.org/a/cup/jagaec/v41y2009i03p641-652_00.html
   My bibliography  Save this article

Enhancing Farm Profitability through Portfolio Analysis: The Case of Spatial Rice Variety Selection

Author

Listed:
  • Nalley, Lawton Lanier
  • Barkley, Andrew
  • Watkins, Brad
  • Hignight, Jeffery

Abstract

This study applies portfolio theory to rice varietal selection decisions to find profit maximizing and risk minimizing outcomes. Results based on data from six counties in the Arkansas Delta for the period 1999-2006 suggest that sowing a portfolio of rice varieties could have increased profits from 3 to 26% (depending on the location) for rice producers in the Arkansas Delta. The major implication of this research is that data and statistical tools are available for rice producers to improve the choice of rice varieties to plant each year in specific locations. Specifically, there are large potential gains from combining varieties that are characterized by inverse yield responses to growing conditions such as drought, pest infestation, or the presence of a specific disease.

Suggested Citation

  • 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.
    • Handle: RePEc:cup:jagaec:v:41:y:2009:i:03:p:641-652_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1074070800003126/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Brennan, John P., 1984. "Measuring the Contribution of New Varieties to Increasing Wheat Yields," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 52(03), pages 1-21, December.
    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. 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.
    4. Annou, Mamane Malam & Thomsen, Michael R. & Hansen, James M. & Wailes, Eric J. & Cramer, Gail L., 2001. "Implications Of Rice Biotechnology On Optimal Rice Crop Rotation In The Mississippi River Delta Region," Staff Papers 15774, University of Arkansas, Department of Agricultural Economics and Agribusiness.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Watkins, K. Bradley & Henry, Christopher G. & Mazzanti, Ralph & Schmidt, Lance & Hardke, Jarrod T., 2014. "Non-Radial Technical Efficiency of Water and Nitrogen Usage in Arkansas Rice Production," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162593, Southern Agricultural Economics Association.
    2. Mortenson, Ryan & Parsons, Jay & Pendell, Dustin L. & Haley, Scott D., 2012. "Wheat Variety Selection: An Application of Portfolio Theory in Colorado," Western Economics Forum, Western Agricultural Economics Association, vol. 11(2), pages 1-12.
    3. Watkins, K. Bradley & Hristovska, Tatjana & Mazzanti, Ralph & Wilson, Charles E., Jr., "undated". "Measuring Technical, Allocative, and Economic Efficiency of Rice Production in Arkansas using Data Envelopment Analysis," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142962, Southern Agricultural Economics Association.
    4. Codjo, O.S. & Fiamohe, R. & Kpenavoun, S. & Acclassato, D. & Biaou, G., 2018. "Application of Portfolio and Stochastic Simulation Analysis for a Decision of Governance Structures Choice of Benin s Rice Producers," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277145, International Association of Agricultural Economists.
    5. Steven C. Blank & Danny Klinefelter, 2012. "Keeping ARMS relevant: increasing its usability," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 72(2), pages 222-232, July.
    6. Bodin, P. & Olin, S. & Pugh, T.A.M. & Arneth, A., 2016. "Accounting for interannual variability in agricultural intensification: The potential of crop selection in Sub-Saharan Africa," Agricultural Systems, Elsevier, vol. 148(C), pages 159-168.
    7. Mishenin, Yevhen & Marekha, Iryna & Yarova, Inessa & Kovalova, Olha & Pizniak, Tetiana, 2022. "Optimizing a portfolio of agri-environmental investments," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 8(1), March.
    8. Watkins, K. Bradley & Henry, Chris G. & Hardke, Jarrod T. & Mane, Ranjitsinh U. & Mazzanti, Ralph & Baker, Ron, 2021. "Non-radial technical efficiency measurement of irrigation water relative to other inputs used in Arkansas rice production," Agricultural Water Management, Elsevier, vol. 244(C).
    9. Diersen, Matthew & Gurung, Pratik & Fausti, Scott, 2015. "Optimal Allocation of Index Insurance Intervals for Commodities," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196793, Southern Agricultural Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dahl, Bruce L. & Wilson, William W., 1997. "Factors Affecting The Supply Of Quality Spring Wheats: Comparisons Between The United States And Canada," Agricultural Economics Reports 23218, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. Salvatore Di Falco & Charles Perrings, 2003. "Crop Genetic Diversity, Productivity and Stability of Agroecosystems. A Theoretical and Empirical Investigation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 207-216, May.
    3. Aaron Michael Shew & Alvaro Durand‐Morat & Lawton Lanier Nalley & Karen Ann‐Kuenzel Moldenhauer, 2018. "Estimating the benefits of public plant breeding: beyond profits," Agricultural Economics, International Association of Agricultural Economists, vol. 49(6), pages 753-764, November.
    4. Edilegnaw, Wale, 2006. "What do Farmers financially lose if they fail to use improved Seeds? Some Econometric Results for Wheat and Implications for Agricultural Extension Policy in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 12(2), pages 1-81, November.
    5. Derek Byerlee, 1993. "Technical Change and Returns to Wheat Breeding Research in Pakistan's Punjab in the Post-Green Revolution Period," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 32(1), pages 69-86.
    6. Busdieker-Jesse, Nichole L. & Nogueira, Lia & Onal, Hayri & Bullock, David S., 2016. "The Economic Impact of New Technology Adoption on the U.S. Apple Industry," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-21, September.
    7. Godden, David P. & Brennan, John P., 1994. "Technological Change Embodied in Southern NSW and British Wheat Varieties," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 62(02), pages 1-14, August.
    8. Barkley, Andrew P. & Chumley, Forrest G., 2012. "A Doubled Haploid Laboratory for Kansas Wheat Breeding: An Economic Analysis of Biotechnology Adoption," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 15(2), pages 1-22, May.
    9. Angelo Zago, 2005. "Tecnhnology estimation for quality pricing in supply-chain relationships," Working Papers 27/2005, University of Verona, Department of Economics.
    10. McFadden, Brandon R. & Nalley, L. Lanier & Popp, Michael P., 2013. "How Greenhouse Gas Emission Policy and Industry Pressure Could Affect Producer Selection of Rice Cultivars," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(2), pages 325-348, August.
    11. Tsiboe, Francis & Nalley, Lawton Lanier & Durand, Alvaro & Thoma, Greg & Shew, Aaron, 2017. "The Economic and Environmental Benefits of Sheath Blight Resistance in Rice," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 42(2), May.
    12. Qiuzhuo Ma & Krishna P Paudel & Liting Gu & Xiaowei Wen, 2018. "An application of a cardinality-constrained multiple benchmark tracking error model on a plant enterprise selection problem," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(5), pages 677-721.
    13. Lawton Nalley & Francis Tsiboe & Alvaro Durand-Morat & Aaron Shew & Greg Thoma, 2016. "Economic and Environmental Impact of Rice Blast Pathogen (Magnaporthe oryzae) Alleviation in the United States," PLOS ONE, Public Library of Science, vol. 11(12), pages 1-15, December.
    14. Mintewab Bezabih & Mare Sarr, 2012. "Risk Preferences and Environmental Uncertainty: Implications for Crop Diversification Decisions in Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(4), pages 483-505, December.
    15. Barkley, Andrew P. & Nalley, Lawton Lanier & Crespi, John M., 2008. "The Impact of the CIMMYT Wheat Breeding Program on Mexican Wheat Producers and Consumers: An Economic Welfare Analysis," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6931, Southern Agricultural Economics Association.
    16. Roberts, Shane & Brooks, Kathleen & Nogueira, Lia & Walters, Cory G., 2022. "The role of quality characteristics in pricing hard red winter wheat," Food Policy, Elsevier, vol. 108(C).
    17. Kim, Kwansoo & Chavas, Jean-Paul, 2003. "Technological change and risk management: an application to the economics of corn production," Agricultural Economics, Blackwell, vol. 29(2), pages 125-142, October.
    18. Lyman, Nathaniel & Nalley, Lawton Lanier, 2013. "Incentivizing Net Greenhouse Gas Emissions Reductions in Rice Production: The Case of Arkansas Rice," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 45(1), pages 1-15, February.
    19. Todor Stoilov & Krasimira Stoilova, 2022. "An Algorithm for Business Management Based on Portfolio Optimization," Mathematics, MDPI, vol. 10(22), pages 1-19, November.
    20. 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.

    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jagaec:v:41:y:2009:i:03:p:641-652_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/aae .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.