A stochastic simulation model is used to determine crop insurance premiums and farm program payments for a Illinois corn-soybean and Mississippi corn-soybean-rice-cotton farm. The optimal portfolio of crop insurance and farm programs are determined subject to payment limitations and crop...

An on-farm harvest, drying and storage system simulation model is used to determine how producers' risk attitudes effect combine and dryer capacity. Stochastic dominance determines the risk efficient combine and dryer set for a 2000 acre farm in central Indiana. Capacities decrease as risk...

This research investigates the potential effects of the row crop provisions of the standing disaster assistance program (SURE) in the 2008 Farm Bill. Results suggest little impact on producer crop insurance purchase decisions, though the program does seem to provide an incentive for mid-level...

Recent legislation has cleared the way for subsidized livestock price insurance. Such programs could increase production. Expected feeder cattle prices with and without subsidized insurance will be analyzed using E-V and Stochastic Dominance. Results will highlight the potential effects of the...

A non-parametric simulation model incorporating price risk determined gross revenue less risk management costs for cow-calf, winter stockering, and retained ownership scenarios for cattle producers in the Southeast. Risk management scenarios simulated hedging with commodity futures and...

A non-parametric simulation model incorporating price and yield risk determined gross revenue less risk management costs for corn, cotton, and soybeans produced with and without irrigation. Risk management alternatives protecting price risk, yield risk, and combinations of price and yield were...

Optimal hedge ratios are estimated for various weights of feeder cattle in four cash markets based on CME data from 1992 to 1999. Three-month uniform hedges are simulated for every weight, contract, and cash market combination. Hedging effectiveness is compared empirically across locations to...

Recent spikes in commodity prices have led to higher margin amounts and option premiums. For the most part, producers have always attributed their lack of use in reducing risk via futures and options markets to the high cost associated with the use of these markets. This study determines the...

This research evaluates whether the introduction of countercyclical payments creates an incentive for program crop producers to hedge the expected government payment using futures and/or options. Results indicate that some level of countercyclical payment hedging is optimal for risk-averse...

This research evaluates whether or not hedging strategies using call options on the New York Board of Trade cotton futures can be effectively used to protect the new counter-cyclical payment on cotton. Results indicate that some level of counter-cyclical payment hedging is optimal for risk...