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Risk premiums due to Fusarium Head Blight (FHB) in wheat and barley

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  • Dahl, Bruce
  • Wilson, William W.

Abstract

Fusarium Head Blight (FHB) is an important problem to the agricultural production and marketing system, and has led to major economic losses for wheat and barley producers in the United States, Canada and many other countries. Deoxynivalenol (DON) is a mycotoxin associated with FHB. Grain products and feed grain contaminated with DON (commonly known as vomitoxin) are subject to FDA advisory limits and as a result end-users place restrictions on this factor. This has led to steep price discounts, as well as higher risks for producers and grain merchandisers. Research has led to development of varieties that are resistant to moderately resistant to FHB. Also, studies indicate combinations of genetic resistance, fungicides and some management practices (combine settings, tillage practices, etc.) can be used to decrease losses due to FHB. This increases cost to the industry and imputes a value related to reduced FHB. The purpose of this paper is to analyze risk and determine risk premiums necessary to induce growers to adopt risk reducing technologies in the case of wheat and barley grown in the United States.

Suggested Citation

  • Dahl, Bruce & Wilson, William W., 2018. "Risk premiums due to Fusarium Head Blight (FHB) in wheat and barley," Agricultural Systems, Elsevier, vol. 162(C), pages 145-153.
    • Handle: RePEc:eee:agisys:v:162:y:2018:i:c:p:145-153
    DOI: 10.1016/j.agsy.2018.01.025
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    References listed on IDEAS

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    1. Bruce L. Dahl & William W. Wilson & D. Demcey Johnson, 2004. "Valuing New Varieties: Trade-Offs between Growers and End-Users in Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(1), pages 82-96.
    2. McCarl, Bruce A. & Bessler, David A., 1989. "Estimating An Upper Bound On The Pratt Risk A Version Coefficient When The Utility Function Is Unknown," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 33(1), pages 1-8, April.
    3. William W. Wilson & Bruce L. Dahl, 2011. "Grain contracting strategies: the case of durum wheat," Agribusiness, John Wiley & Sons, Ltd., vol. 27(3), pages 344-359, June.
    4. Shakya, Sumadhur & Wilson, William W. & Dahl, Bruce L., 2013. "Valuing New Random Genetically Modified (GM) Traits in Corn," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(1), pages 1-17, April.
    5. William Wilson & Cole Gustafson & Bruce Dahl, 2009. "Crop insurance in malting barley: a stochastic dominance analysis," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 69(1), pages 98-112, May.
    6. Nganje, William E. & Johnson, D. Demcey & Wilson, William W. & Leistritz, F. Larry & Bangsund, Dean A. & Tiapo, Napoleon M., 2001. "Economic Impacts Of Fusarium Head Blight In Wheat And Barley: 1998-2000," Agribusiness & Applied Economics Report 23515, North Dakota State University, Department of Agribusiness and Applied Economics.
    7. William E. Nganje & Dean A. Bangsund & F. Larry Leistritz & William W. Wilson & Napoleon M. Tiapo, 2004. "Regional Economic Impacts of Fusarium Head Blight in Wheat and Barley," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(3), pages 332-347.
    8. Wilson, William W. & Dahl, Bruce L. & Maxwell, Brett J., 2007. "Grower Response to Contracts and Risk in Genetically Modified (GM) Crops," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 32(1), pages 1-19, April.
    9. William W. Wilson & Bruce Dahl, 2014. "Contracting for Canola in the Great Plains States," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(1), pages 89-106, March.
    10. Dahl, Bruce L. & Wilson, William W. & Nganje, William E., 2004. "Stochastic Dominance in Wheat Variety Development and Release Strategies," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(1), pages 1-18, April.
    11. Nganje, William E. & Kaitibie, Simeon & Wilson, William W. & Leistritz, F. Larry & Bangsund, Dean A., 2004. "Economic Impacts Of Fusarium Head Blight In Wheat And Barley: 1993-2001," Agribusiness & Applied Economics Report 23627, North Dakota State University, Department of Agribusiness and Applied Economics.
    12. Bruce L. Dahl & William W. Wilson & D. Demcey Johnson, 2004. "Valuing New Varieties: Trade-Offs between Growers and End-Users in Wheat," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(1), pages 82-96.
    13. William Wilson & Sumadhur Shakya & Bruce Dahl, 2015. "Valuing new random genetically modified (GM) traits with real options," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 75(2), pages 213-229, July.
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    3. Nganje, William & Fosu, Prince, 2022. "Risks and risk premiums of GE corn: A macromarketing framework," Ecological Economics, Elsevier, vol. 201(C).

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