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A Risk Analysis of Converting CRP Acres to a Wheat-Sorghum-Fallow Rotation

Author

Listed:
  • Williams, Jeffery R.
  • Llewelyn, Richard V.
  • Pendell, Dustin L.
  • Schlegel, Alan J.
  • Troy, Dumler
Abstract
This study examines the economic potential of producing a wheat (Triticum aesitivum) and grain sorghum (Sorghum bicolor (L.) Moench) rotation with three different tillage strategies compared to the Conservation Reserve Program (CRP) in a semi-arid region. This research uses stochastic efficiency with respect to a function (SERF) to determine the preferred management strategies under various risk preferences and utility-weighted certainty equivalent risk premiums. Yields, input rates, and field operations from an experimental field in western Kansas are used to calculate net returns for each tillage strategy. Although current net returns to crop production using reduced tillage and no-tillage strategies are higher than CRP, risk analysis indicates CRP would be the preferred strategy for some risk-averse managers.

Suggested Citation

  • Williams, Jeffery R. & Llewelyn, Richard V. & Pendell, Dustin L. & Schlegel, Alan J. & Troy, Dumler, 2009. "A Risk Analysis of Converting CRP Acres to a Wheat-Sorghum-Fallow Rotation," 2009 Annual Meeting, January 31-February 3, 2009, Atlanta, Georgia 45985, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saeana:45985
    DOI: 10.22004/ag.econ.45985
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    References listed on IDEAS

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    5. Dustin L. Pendell & Jeffery R. Williams & Scott B. Boyles & Charles W. Rice & Richard G. Nelson, 2007. "Soil Carbon Sequestration Strategies with Alternative Tillage and Nitrogen Sources under Risk," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 247-268.
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    8. Pendell, Dustin L. & Perry, William R. & Williams, Jeffery R. & Barnaby, Glenn Arthur, Jr. & Lubben, Bradley D., 2003. "Mathematical Formulas For Calculating Net Returns From Participation In Government Programs, Crp, And Crop Insurance Alternatives," Staff Papers 30711, Kansas State University, Department of Agricultural Economics.
    9. Johnson, Phillip N. & Misra, Sukant K. & Ervin, R. Terry, 1997. "A Qualitative Choice Analysis Of Factors Influencing Post-Crp Land Use Decisions," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(1), pages 1-11, July.
    10. Schumann, Keith D. & Richardson, James W. & Lien, Gudbrand D. & Hardaker, J. Brian, 2004. "Stochastic Efficiency Analysis Using Multiple Utility Functions," 2004 Annual meeting, August 1-4, Denver, CO 19957, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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    12. Kalaitzandonakes, N.G. & Monson, M., 1994. "An Analysis of Potential Conservation Effort of CRP Participants in the State of Missouri: A Latent Variable Approach," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(1), pages 200-208, July.
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    Cited by:

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    2. Galinato, Suzette P. & Young, Douglas L. & Frear, Craig S. & Yoder, Jonathan K., 2011. "Will Washington Provide Its Own Crop Feedstocks for Biofuels?," Western Economics Forum, Western Agricultural Economics Association, vol. 10(1), pages 1-11.

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    Keywords

    Agricultural and Food Policy; Crop Production/Industries; Farm Management; Land Economics/Use; Risk and Uncertainty;
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