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

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

doi:10.1017/s1074070800000754

Cited by 10 publications

(10 citation statements)

References 17 publications

(23 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The CE of a risky alternative is the guaranteed amount of money at which a decision maker would be willing to accept, instead of taking the risky alternative (Williams et al, 2014). Thus, risky alternatives with higher CEs are preferred to those with lower CEs (Hardaker and Lien, 2010;Hardaker et al, 2004;Meyer et al, 2009).…”

Section: Stochastic Efficiencymentioning

confidence: 99%

“…Stochastic efficiency with respect to a function methods can be adopted to a wide range of individual decision making processes. It has been applied to evaluate various alternative decisions, such as beef farms' insurance policies (Williams et al, 2014), and sustainability of crop farming systems (Lien et al, 2007). 3 The functional form of the power utility is as follows:…”

Section: Stochastic Efficiencymentioning

confidence: 99%

See 1 more Smart Citation

Risk Management Strategies using Precision Agriculture Technology to Manage Potato Late Blight

et al. 2017

Self Cite

View full text Add to dashboard Cite

Precision agriculture has emerged as a revolutionary technology, which transforms farming related data into useful information for agricultural decision-making. Th is paper compares precision farming technology with calendar-based approach in scheduling fungicide applications to manage potato (Solanum tuberosum L.) late blight disease. Th ree fungicide scheduling strategies were evaluated: calendar-based strategy, BlightPro decision support system based strategy (DSS-based strategy), and unsprayed control. Using results from 14 yr of computer simulation experiments for 59 locations in the United States, we constructed distributions of net return to all costs excluding fungicide cost and application cost per 0.41 ha (net return per 0.41 ha) for the calendar-based and DSS-based strategies at each location. Th ese distributions were then compared using three risk management methods: stochastic dominance, stochastic dominance with respect to a function, and stochastic effi ciency with respect to a function. Th e DSS-based strategy was identifi ed as the most eff ective approach to manage late blight in terms of disease suppression, net return per 0.41 ha, and risk-adjusted net return. Results indicate that the DSS-based strategy is the preferred method to schedule fungicide applications. Under high disease pressure circumstances, the economic benefi ts to potato growers of adopting the precision agriculture technology ranged from US$30 to $573 per 0.41 ha. For risk neutral individuals, who are concerned about the diff erence between average net return per 0.41 ha, the benefi ts ranged from $30 to $305 per 0.41 ha. Except for growers raising the moderately resistant potato cultivars, more risk averse individuals tended to benefi t more from adopting the precision agriculture technology, with benefi ts ranging from $38 to $573 per 0.41 ha. Abbreviations: AUDPC, area under disease progress curve; CE, certainty equivalent; DSS, decision support system; FSD, fi rst-degree stochastic dominance; RP, risk premium; net return per 0.41 ha, net return to all costs excluding fungicide cost and application cost per 0.41 ha; SERF, stochastic effi ciency with respect to a function; SSD, second-degree stochastic dominance; SDRF, stochastic dominance with respect to a function. Core ideas• Th e benefi ts of adopting precision farming technology was investivated in scheduling fungicide applications to manage potato late blight.• Th e precision farming technology is the preferred method to schedule fungicide applications in terms of disease suppression, net return per 0.41 ha, and risk-adjusted net return.• Th e increased adoption of the precision farming technology would help manage late blight, limit potential crop losses, and improve net returns.

show abstract

Section: Stochastic Efficiencymentioning

confidence: 99%

Section: Stochastic Efficiencymentioning

confidence: 99%

Risk Management Strategies using Precision Agriculture Technology to Manage Potato Late Blight

et al. 2017

Self Cite

View full text Add to dashboard Cite

show abstract

“…Stochastic efficiency with respect to a function (SERF) was used to rank the distributions of net return per hectare of conventional tillage without a cover crop and no‐till with/without cover crop treatments (Hardaker et al., 2004). The SERF procedure has been widely used to evaluate various risky alternatives and estimate the risk premiums to guide decision‐making process (Liu et al., 2018; Williams, Saffert, Barnaby, Llewelyn, & Langemeier, 2014). According to Hardaker et al.…”

Section: Methodsmentioning

confidence: 99%

“…The CE is the risk‐adjusted value of the net return per hectare for each tillage and cover crop treatment. The CE of a risky alternative is also the guaranteed amount of money a decision maker would be willing to accept, instead of taking the risky alternative (Williams et al., 2014). For a given utility function, CE is calculated as follows:

CE [w, r (w)] = U^{- 1} [w, r (w)]

where U ( w ) is the utility function of a decision‐maker with a risky alternative w (wealth), as shown in Figure 2a (Varian, 1992), and the risk aversion function r( w ) is between the lower and upper bounds r L ( w ) and r U ( w ).…”

Section: Methodsmentioning

confidence: 99%

See 1 more Smart Citation

Net return and risk analysis of winter cover crops in dryland cotton systems

Fan¹,

Liu

DeLaune³

et al. 2020

Agronomy Journal

View full text Add to dashboard Cite

Winter cover crop and no-till are two promising conservation practices to reduce soil erosion and promote long-term sustainability. This research evaluates the net returns of two different tillage methods and five cover crop treatments in dryland cotton (Gossypium hirsutum L.) production and identifies risk-efficient tillage and cover crop management practices. Four-year field experiments (2013−2016) were conducted for a continuous cotton production system under conventional tillage and no-till without a cover crop, as well as no-till with cover crops including winter wheat (Triticum aestivum L.), crimson clover (Trifolium incarnatum L.), Austrian winter field pea (Pisum sativum L.), hairy vetch (Vicia villosa Roth), and mixed cover crops. Results showed no statistical differences in lint yields (P = .98) or net returns (P = .82). No-till with crimson clover decreased yield variation compared to conventional tillage, while hairy vetch and mixed cover crops increased yield variation. The average net returns were US$454 and $461 ha −1 for conventional tillage and no-till without a cover crop, respectively. The average net returns ranged from $346 to $389 ha −1 for the cover crop treatments. Producers have a higher probability of getting a higher net return if switching from conventional tillage to no-till. The risk analysis results showed that no-till without a cover crop was the most preferred practice by risk-neutral, somewhat and rather risk-averse producers. For very and extremely risk-averse producers, no-till with crimson clover was the most preferred management practice.

show abstract

Economic analysis of adopting no‐till and cover crops in irrigated cotton production under risk

Fan¹,

Liu

DeLaune³

et al. 2020

Agronomy Journal

View full text Add to dashboard Cite

Adoption of soil conservation practices has been promoted to improve environmental and economic benefits across the United States. These practices are especially necessary for soil health improvement in the Southern High Plains where soils are prone to erosion and agricultural irrigation relies heavily on groundwater. Winter cover crops and no‐till cropping are two conservation practices for reducing soil erosion, but producers might face additional risks associated with adopting these practices. The objective of this study was to examine the profitability and risks associated with alternative tillage and cover crops (no cover crop, winter wheat [Triticum asestivum L.], and grass–legume mixture) for irrigated cotton (Gossypium hirsutum L.). Using data from a 6‐yr field experiment, net return distributions of each production system were evaluated and ranked across various risk aversion levels. The results showed that the average net returns were $1040 and $1049 ha−1 for conventionally tilled and no‐till cotton without a cover crop, while the net returns were $1121 and $1075 ha−1 for no‐till cotton with wheat and mixed cover crops, respectively. Producers adopting cover crops had a greater probability of getting a middle interval of net returns between $760 and $1370 ha−1. The results of risk analysis show that risk‐neutral and slightly risk‐averse producers prefer no‐till cotton production with wheat cover, while no‐till with mixed and wheat cover are the first and second most preferred systems for very and extremely risk‐averse producers. Sensitivity analysis confirms consistent profit effects of cover crops and no‐till adoption at multiple cotton price levels.

show abstract

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

Cited by 10 publications

References 17 publications

Risk Management Strategies using Precision Agriculture Technology to Manage Potato Late Blight

Risk Management Strategies using Precision Agriculture Technology to Manage Potato Late Blight

Net return and risk analysis of winter cover crops in dryland cotton systems

Economic analysis of adopting no‐till and cover crops in irrigated cotton production under risk

Contact Info

Product

Resources

About