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| Table 2. Strategies for
Alternative Farm Types with 600 Acres of Corn -
Net Return Over Cash Flow Costs. Scenario: (10%
probability in 1997) 155 bu/ac yield, $1.95/bu
harvest yr. cash price |
| |
Owner
|
Crop Share
|
Renter
|
Buyer
|
| |
--------------------------
dollars ------------------------
|
| Without risk management -
Local equiv. Price |
|
49,350
|
-1,125
|
-13,050
|
-18,450
|
| With risk
management |
|
|
|
|
|
| Pricing only, 60% of TY1,
Buy put in May |
$2.34
|
59,680
|
4,040
|
-2,720
|
-8,120
|
| Pricing only 60%, Hedge last
wk in May |
2.12
|
56,490
|
2,445
|
-5,910
|
-11,310
|
| Pricing + RA, Buy put in May |
2.34
|
55,414
|
1,907
|
-6,986
|
-12,386
|
| Pricing + MPCI, Buy put in
May |
2.34
|
55,300
|
1,850
|
-7,100
|
-12,500
|
| Pricing + CRC, Buy put in
May |
2.34
|
52,510
|
455
|
-9,890
|
-15,290
|
| Pricing + RA, Hedge last wk
June |
2.12
|
52,224
|
312
|
-10,176
|
-15,576
|
| Pricing + MPCI, Hedge last
wk June |
2.12
|
52,110
|
255
|
-10,290
|
-15,690
|
| Pricing + CRC, Hedge last wk
June |
2.12
|
49,320
|
-1,140
|
-13,080
|
18,480
|
| Insurance only RA |
|
45,084
|
-3,258
|
-17,316
|
-22,716
|
| Insurance only MPCI |
|
44,970
|
-3,315
|
-17,430
|
-22,830
|
| Insurance only CRC |
|
42,180
|
-4,710
|
-20,220
|
-25,620
|
| 1
TY = Trend Yield |
|