AN EVALUATION OF RISK MANAGEMENT STRATEGIES FOR DAIRY FARMS

Variability in feed prices and crop yields are important sources of risk to dairy farmers. A simulation model of a representative dairy farm was used to evaluate crop insurance and hedging as risk management strategies. These strategies lowered expected net returns but also reduced risk. The preferred set of strategies at lower levels of risk aversion included hedging and crop insurance, although a base scenario in which no risk management strategies were employed was also efficient. The preferred strategy at higher levels of risk aversion was a combination of crop insurance and hedging.


Issue Date:
1992-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/29638
Published in:
Southern Journal of Agricultural Economics, Volume 24, Number 2
Page range:
173-182
Total Pages:
10




 Record created 2017-04-01, last modified 2018-01-22

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