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Price Variability And Financial Risk For Sugar Beet Growers

Author

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  • Nganje, William E.
  • Stoltman, Gwen

Abstract

This paper develops a portfolio framework to characterize and analyze the impact of price risk faced by sugar beet growers in the Red River Valley and derives implications for capital markets. Other sources of risk incorporated in the analysis are yields and production cost. Results from stochastic simulation analysis reveal that sugar beet growers incur significant price and financial risk. The hypothesis that the loan rate for sugar truncates the distribution of net returns and protects growers against declining beets prices was not validated.

Suggested Citation

  • Nganje, William E. & Stoltman, Gwen, 2000. "Price Variability And Financial Risk For Sugar Beet Growers," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36493, Western Agricultural Economics Association.
    • Handle: RePEc:ags:waeava:36493
    DOI: 10.22004/ag.econ.36493
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    File URL: https://ageconsearch.umn.edu/record/36493/files/sp00ng01.pdf
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    References listed on IDEAS

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    1. Thomas L. Sporleder, 1999. "Capital Market Innovations and Agricultural Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1247-1249.
    2. Koo, Won W. & Taylor, Richard D. & Swenson, Andrew L. & Johnson, D. Demcey & Flaskerud, George K., 1998. "SHORTFALLS IN 1997 NET FARM INCOME IN NORTH DAKOTA (Prepared for Senators Byron Dorgan and Kent Conrad)," Agricultural Economics Reports 23140, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. J. Roy Black & Barry J. Barnett & Yingyao Hu, 1999. "Cooperatives and Capital Markets: The Case of Minnesota-Dakota Sugar Cooperatives," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1240-1246.
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    Cited by:

    1. Robert Finger & Nadja El Benni, 2012. "A Note on Price Risks in Swiss Crop Production – Empirical Results and Comparisons with other Countries," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 5(1), pages 131-151.

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