Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-13T04:14:18.791Z Has data issue: false hasContentIssue false
  • English
  • Français

Marketing of Cotton Fiber in the Presence of Yield and Price Risk

Published online by Cambridge University Press:  28 April 2015

Jan Wojciechowski ,
Glenn C. W. Ames ,
Steven C. Turner  and
Bill R. Miller
Jan Wojciechowski
Affiliation:
Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia 30602-7509
Glenn C. W. Ames
Affiliation:
Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia 30602-7509
Steven C. Turner
Affiliation:
Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia 30602-7509
Bill R. Miller
Affiliation:
Department of Agricultural and Applied Economics, University of Georgia, Athens, Georgia 30602-7509
Get access Rights & Permissions [Opens in a new window]

Abstract

An expected-utility model and a chance-constrained linear programming model were used to analyze four marketing strategies and seven crop insurance alternatives for cotton marketing in Georgia. The results suggest that existing marketing tools and insurance alternatives can be used to reduce cotton producers' revenue risk. The optimal level of yield and price insurance coverage depends on an individual producer's risk aversion.

Keywords

crop insurancemarketing strategiesrisk aversion
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 32 , Issue 3 , December 2000 , pp. 521 - 529
Copyright
Copyright © Southern Agricultural Economics Association 2000

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Balkeslee, L. “Optimal Sequential Grain Marketing Decisions under Risk Aversion and Price Uncertainty.” American Journal of Agricultural Economics Vol. 79 (November 1997):1140–1152.CrossRefGoogle Scholar
Brorsen, B.W., Buck, D.W., and Koontz, S.R.. “Hedging Hard Red Winter Wheat: Kansas City versus Chicago.” Journal of Futures Markets Vol. 18, No. 4 (1998):449–466.3.0.CO;2-Q>CrossRefGoogle Scholar
Feder, G., Just, R.E., and Schmitz, A.. “Futures Markets and the Theory of the Firm Under Price Uncertainty.” Quarterly Journal of Econometrics 94(1980):317–28.Google Scholar
Givan, W. and Shurley, D.W.. “1997 Crop Enterprise Cost Analysis.” Athens, Georgia: Cooperative Extension Service, November 1996.Google Scholar
Grant, D. “The Theory of the Firm with Joint Price and Output Risk and a Forward Market.” American Journal of Agricultural Economics 65(1985):630–635.CrossRefGoogle Scholar
Holthausen, D.M. “Hedging and the Competitive Firm under Price Uncertainty.” American Economic Review 69 (1979):989–995.Google Scholar
Lapan, H., Moschini, G., and Hanson, S.D.. “Production, Hedging, and Speculative Decisions with Option and Futures Markets.” American Journal of Agricultural Economics Vol. 73, No. 1, (1991):66–74.CrossRefGoogle Scholar
Markowitz, H. “Portfolio Selection.” Journal of Finance 7 (1952):77–91.Google Scholar
Paris, Q. “Revenue and Cost Uncertainty, Generalized Mean-Variance, and the Linear Complementarity Problem.” American Journal of Agricultural Economics (May 1979):268–275.CrossRefGoogle Scholar
Pratt, J.W. “Risk Aversion in the Small and in the Large.” Econometrica 32 (1964):122–136.CrossRefGoogle Scholar
Rain and Hail Crop Insurance Company. Agent Training Manual, place of publication unspecified, 1998.Google Scholar
Rolfo, J. “Optimal Hedging under Price and Quantity Uncertainty: The Case of a Coca Producer.” Journal of Political Economy 88(1980):100–116.CrossRefGoogle Scholar
Vercammen, J. “Hedging with Commodity Options When Price Distributions are Skewed.” American Journal of Agricultural Economics Vol. 77, No. 4, (1995):935–945.CrossRefGoogle Scholar
Von Neumann, J. and Morgenstern, O.. Theory of Games and Economic Behavior, 3rd ed., (New Jersey: Princeton University Press), 1953.Google Scholar
Wojciechowski, Jan. “Price and Yield Risk Management in the Marketing of Cotton Products Using Futures, Options, and Crop Insurance.” Unpublished Ph.D. dissertation, The University of Georgia, Athens, Georgia, 1998.Google Scholar