Modeling Crop Rotations Under Risk in Order to Maximize Grower Returns

Crop enterprise(s) selection is one of the most critical decisions growers face. Growers have preferred outcomes but must account for its statistical probability in achieving those preferred outcomes given their resource endowment subject to prevailing market conditions and other variables while seeking to minimize risk in such decisions. Traditionally, risk can come from either variability in yields, market prices, and production input costs requisite to the cultivation of each crop enterprise. To analyze risk and its impact on crop enterprise selection, four representative farms were established within Louisiana and Arkansas to evaluate net return variability among alternative crop enterprises and rice cultivar selection using regionally specific stochastic efficiency criterion. The aim of this study is to evaluate which crop enterprise choice(s), within both continuous and rotational management strategies, best maximizes grower profitability over alternative rice cultivar and crop enterprise selections subject to a prescribed range of risk aversion levels.