Thesis Defense by Agricultural Economics Master’s Student Kara Zimmerman.
At the beginning of each crop year producers face unknown harvest price and yield and the path prices took between the spring and fall to end up at the harvest price. The goal of this webinar is to explore the role of different intra-season hedging strategies and different crop insurance policies to identify optimal hedging and crop insurance strategies. To evaluate our goal we inspect the tradeoff between minimizing net income risk (i.e., farm failure) and maximizing average net income realized from producing corn. With yield risk and the price-yield correlation changing across space we evaluate the role of pre-harvest hedging strategies and crop insurance on net income risk in two different locations, Colfax and Scottsbluff counties. Further, the farming practice, irrigated or non-irrigated, also impacts the amount of yield risk as well as the price-yield correlation. In both locations we evaluate the role of both irrigated and non-irrigated production practices in determining the optimal intra-season hedging strategy and crop insurance combination. Results shed light on the role of grain marketing strategies at different locations and practice (irrigated or not) on financial outcomes. Stakeholders can gain insights not only into the financial outcomes of different grain marketing strategies (and crop insurance) but also how to approach the grain marketing decision.
Zimmerman’s thesis committee comprises Agricultural Economics faculty members Dr. Cory Walters, Dr. Kate Brooks, Dr. Brad Lubben and Extension Educator Jessica Groskopf.