Abstracts Economics

Variability in Rice Returns Using a Representative Farm Approach

by Adriana Dimas

Agriculture is a major contributor to the U.S. economy and vital to the continued availability of a safe and inexpensive food supply. Representative farms are virtual farms that represent the production practices of a specific crop and region. Annually, growers face critical management decisions on what crop enterprise selection and combinations will maximize the net returns. Risk for growers comes from the variation in different factors such as yield, market price, production input costs, among others that are required to produce each enterprise. Nine representative farms were established within Louisiana, Mississippi, and Arkansas to evaluate net return variability among different rice cultivars with respect to different alternatives such as corn, cotton, and soybean production using a stochastic efficiency criterion per region. This research is aimed to evaluate which crop enterprise choice within continuous and rotational management strategies will maximize profitability over alternative crop selections across the range of risk aversion level.