FINANCIAL RISK MANAGEMENT ALTERNATIVES IN A WHOLE-FARM SETTING

Risk programming and simulation methods are used to analyze the opportunity to reduce whole-farm risk in a diversified cash crop farm through reduced leverage and/or adjustments in rental arrangements. These two financial strategies are shown to extend the ability of the farm operator to manage downside risk beyond the singular effects of a diversified farm plan. The analysis indicates that a trade-off occurs between these strategies, but that the reduction of debt has a greater impact on the distributions of net cash flow (before taxes) and outstanding term debt.


Issue Date:
1986-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/32533
Published in:
Western Journal of Agricultural Economics, Volume 11, Number 1
Page range:
67-75
Total Pages:
9




 Record created 2017-04-01, last modified 2017-04-04

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