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Farmer perceptions of risk in 2017

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  • Nathanael M. Thompson
  • Courtney Bir
  • Nicole J. Olynk Widmar

Abstract

Agribusinesses seeking to serve farmer clientele, as well as those buying products from the farm for processing or transport, need to understand the factors impacting on‐farm decision making. A best–worst choice experiment was employed to determine farmer perceptions of five general risk areas: production, marketing, financial, human, and legal risks. Results indicate, on average, farmers were more concerned with traditional farm business risks (production, financial, and marketing risks) relative to human and legal risks when managing their farm businesses. However, significant heterogeneity in perceptions of risk areas was observed. A latent class model identified three segments of producers that were characterized by preferences for traditional farm business risks, well‐balanced preferences for all five risks, and a large preference share for human risks. Understanding how different farm types and managers with varying demographics prioritize risk areas is helpful for targeting specific risk management programming and support services to relevant farm audiences. [EconLit citations: Q1].

Suggested Citation

  • Nathanael M. Thompson & Courtney Bir & Nicole J. Olynk Widmar, 2019. "Farmer perceptions of risk in 2017," Agribusiness, John Wiley & Sons, Ltd., vol. 35(2), pages 182-199, April.
    • Handle: RePEc:wly:agribz:v:35:y:2019:i:2:p:182-199
    DOI: 10.1002/agr.21566
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    References listed on IDEAS

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    1. Reimer, Aaron & Downey, W. Scott & Akridge, Jay T., 2009. "Market Segmentation Practices of Retail Crop Input Firms," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 12(01), pages 1-34, February.
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    5. Lockert, Christine & Lubben, Bradley, 2014. "North Central Extension Risk Management Education Center," Cornhusker Economics 306856, University of Nebraska-Lincoln, Department of Agricultural Economics.
    6. Vera Bitsch & Nicole J. Olynk, 2007. "Skills Required of Managers in Livestock Production: Evidence from Focus Group Research," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(4), pages 749-764.
    7. Alexander, Corinne E. & Wilson, Christine A. & Foley, Daniel H., 2005. "Agricultural Input Market Segments: Who Is Buying What?," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(2), pages 1-20.
    8. Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economic Reports 34081, United States Department of Agriculture, Economic Research Service.
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    1. Mattke, Alicia & Hansen, Kristiana & Peck, Dannele & Vivek, Sharma & Miller, Scott & Bastian, Christopher, 2024. "Potential Benefits of Water-Use Efficiency Technologies in Southeastern Wyoming," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2024, January.
    2. Atta, Cosmos & Micheels, Eric, 2022. "A Best-Worst Scaling Approach To Understand The Risk Management Preferences Of Saskatchewan Grain And Oilseed Farmers," Agricultural Economics Society (AES) 98th Annual Conference, The University of Edinburgh, Edinburgh, UK, March 18-20, 2024 345977, Agricultural Economics Society (AES).
    3. Edwards, Aaron J. & Thompson, Nathanael M. & Mintert, James R. & Hurt, Christopher A. & Baker, Timothy G., 2020. "Indiana Corn and Soybean Returns to Storage," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2020.
    4. Janzen, Joseph P., 2024. "Realized Farm-Level Returns to Post-Harvest Grain Storage and Marketing," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2024, January.
    5. Komarek, Adam M. & De Pinto, Alessandro & Smith, Vincent H., 2020. "A review of types of risks in agriculture: What we know and what we need to know," Agricultural Systems, Elsevier, vol. 178(C).
    6. Malni Kumarathunga & Rodrigo N. Calheiros & Athula Ginige, 2022. "Smart Agricultural Futures Market: Blockchain Technology as a Trust Enabler between Smallholder Farmers and Buyers," Sustainability, MDPI, vol. 14(5), pages 1-20, March.

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