PRICE VARIABILITY AND FINANCIAL RISK FOR SUGAR BEET GROWERS Report as inadecuate




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This paper develops a portfolio framework to characterize and analyze the impact of price risk faced by sugar beet growers in the Red River Valley and derives implications for capital markets. Other sources of risk incorporated in the analysis are yields and production cost. Results from stochastic simulation analysis reveal that sugar beet growers incur significant price and financial risk. The hypothesis that the loan rate for sugar truncates the distribution of net returns and protects growers against declining beets prices was not validated.

Keywords: Financial risk ; total risk ; price variability ; stochastic simulation of net return ; default risk

Subject(s): Agricultural Finance

Crop Production/Industries

Issue Date: 2000

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/36493

Total Pages: 27

Series Statement: Selected Paper of the 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia

Record appears in: Western Agricultural Economics Association > 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia





Author: Nganje, William E. ; Stoltman, Gwen

Source: http://ageconsearch.umn.edu/record/36493?ln=en



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