Proceedings

AP – Training Commercial Farmers How To Analyse And Rank Risky Alternatives

Risk management is a major challenge for farm managers. Monte Carlo simulation models can be used to teach commercial farmers how to manage risk. However, the decision tools for ranking risky alternatives have long been an impediment to learning the art of ranking risky alternatives. New risk ranking tools available in a Microsoft® Excel add-in, Simetar, take the art out of ranking risky alternatives. SERF and StopLight charts in Simetar are demonstrated by ranking risky alternative marketing, crop mixes and crop insurance strategies available to a representative crop farm.

Key Words: Risk Management, SERF, Stochastic Efficiency, StopLight, Simetar, Simulation.

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Author(s): Outlaw, J.L., Richardson J.W.

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Organizations(s): Department of Agricultural Economics, Texas A&M University, College Station, Texas