Date of this Version
Bravo-Ureta, Boris E. and Helmers, Glenn E. (1983). Price, yield and net income variability for selected field crops and counties in Nebraska (Research Bulletin No. 302)
The primary objective of this study was to establish an empirical estimate of the riskiness of various crops in different regions of Nebraska. For this purpose the variate difference method was used to estimate random variability indexes of prices, yields, and net returns for six Nebraska crops (wheat, soybeans, alfalfa, oats, grain sorghum, corn). The period of analysis included 1957-1976 and one county in each of the eight crop reporting districts was analyzed. Where relevant, both dryland and irrigated alternatives were examined. Most business decision-makers accept more risk only under the conditions that the probability of higher returns accompany risky choices. The authors believe that information in this report can be used by Nebraska farmers when deciding what crops to grow. Variability indexes can provide information regarding the riskiness of the various enterprises. The authors recognize that diversification can also be a useful approach to decrease net return variability along with insurance, commodity programs, and more sophisticated risk reducing strategies.