Application of Markowitz Portfolio Theory to Producing the World Major Field Crops

Abstract

Development of growing cereals and oilseeds is a pressing issue for providing global food security and renewable energy. The study deals with applying methods of portfolio theory to mitigate natural and marketing uncertainties emerged from unstable yields and volatile prices for wheat, maize, barley, sunflower, soybeans, and rapeseed. The research outcome based on the utilization of Markowitz mean-variance indicators made possible to evaluate portfolio performances of the world top cereals and oilseeds producers. The study findings at a country level combined econometric forecasting of the crop revenues and modeling optimal portfolios of cereals and oilseeds subject to acceptable trade-offs between risks and expected revenues. The fulfilled calculations with Ukrainian focus clarified farmland allocations under cereal and oilseed crops to underpin biodiversity and keep firm positions in the world markets.

Clustering countries of the world according to their business practices in agriculture

“…The contemporary business context emphasizes the necessity of integrating sustainable practices into strategic planning and measuring the success of companies. This is done not only based on financial outcomes but also considering social responsibility, environmental sustainability, and overall contributions to society ( Some studies demonstrate that integrating sustainable development principles can significantly improve not just the environmental indicators of agricultural enterprises but also their economic efficiency and social responsibility (Hadouga, 2023;Olaniyan & Adepeju, 2023;Vasylieva, 2020;Plastun et al, 2021). Moreover, organic farming and other eco-friendly land management methods help preserve biodiversity, improve soil and water quality, and ensure healthy food products for consumers (Dobrovolska & Espejo, 2018).…”