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A Risk Analysis of Adjusted Gross Revenue-Lite on Beef Farms

Published online by Cambridge University Press:  26 January 2015

Jeffery R. Williams ,
Andrew T. Saffert ,
G. Art Barnaby ,
Richard V. Llewelyn  and
Michael R. Langemeier
Jeffery R. Williams
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, Kansas
Andrew T. Saffert
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, Kansas
G. Art Barnaby
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, Kansas
Richard V. Llewelyn
Affiliation:
Department of Agricultural Economics, Kansas State University, Manhattan, Kansas
Michael R. Langemeier
Affiliation:
Department of Agricultural Economics, Purdue University, West Lafayette, Indiana
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Abstract

This study evaluates the Adjusted Gross Revenue-Lite (AGR-Lite) whole-farm adjusted gross revenue insurance program on net farm income risk using panel data from 49 southeast Kansas beef farms. On average for the group, but not each individual farm, AGR-Lite reduces the mean and standard deviation of net farm income, raises the average minimum, and lowers the average maximum observations of the net income distribution. Thirty-four farms (69%) received at least one indemnity payment. Stochastic efficiency with respect to a function reveals that AGR-Lite is preferred by 18 of the farm managers (37%) when an upper bound on the risk-aversion coefficient is used.

Keywords

AGR-Litebeef farmsrisk analysiswhole-farm revenue insuranceQ12Q18
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 2 , May 2014 , pp. 227 - 244
Copyright
Copyright © Southern Agricultural Economics Association 2014

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