IDEAS home Printed from https://ideas.repec.org/p/ags/saea13/143050.html
   My bibliography  Save this paper

Proposed Farm Bill Impact On The Optimal Hedge Ratios For Crops

Author

Listed:
  • Tran, Trang
  • Coble, Keith H.
  • Harri, Ardian
  • Barnett, Barry J.
  • Riley, John Michael

Abstract

Revenue insurance with shallow loss protection for farmers has been introduced recently. A common attribute of most shallow loss proposals is that they would be area-revenue triggered. The impact on optimal hedge ratios of combining these shallow loss insurance proposals with deep loss farm-level insurance is examined. Since crop insurance, commodity programs and forward pricing are commonly used concurrently to manage crop revenue risk, the optimal combinations of these tools are explored. Numerical analysis in the presence of yield, basis and futures price variability is used to find the futures hedge ratio which maximizes the certainty equivalent of a risk averse producer. The results generally reveal a lower optimal hedge ratio with area-insurance than with individual insurance and show that STAX and ARC tend to slightly increase optimal hedge ratios.

Suggested Citation

  • Tran, Trang & Coble, Keith H. & Harri, Ardian & Barnett, Barry J. & Riley, John Michael, 2013. "Proposed Farm Bill Impact On The Optimal Hedge Ratios For Crops," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143050, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea13:143050
    DOI: 10.22004/ag.econ.143050
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/143050/files/2013%20SAEA%20Paper%20_%20Trang%20Tran%20MSU.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.143050?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Niklaus Lehmann & Robert Finger & Tommy Klein & Pierluigi Calanca, 2013. "Sample Size Requirements for Assessing Statistical Moments of Simulated Crop Yield Distributions," Agriculture, MDPI, vol. 3(2), pages 1-11, April.

    More about this item

    Keywords

    Agricultural Finance; Farm Management; Risk and Uncertainty;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:saea13:143050. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.