Analysis of Selected Marketing Strategies: A Whole‐Farm Simulation Approach

A detailed whole‐farm simulation model capable of simulating stochastic daily cash and futures prices was used to evaluate alternative marketing strategies for a Texas High Plains cotton farm over a ten‐year planning horizon. Stochastic dominance with respect to a function was used to rank the alternative marketing strategies for risk‐averse and risk‐neutral producers. Results indicated that risk‐averse producers would prefer hedge and hold marketing strategies over discretionary hedging strategies. Sellers' call contracting was not highly preferred by either risk‐neutral or risk‐averse producers.