Microeconomic effects of reduced yield variability cultivars of soybeans and wheat

Economic analysis was conducted on hypothetical agronomic research on new crop cultivars for Arkansas dryland soybean and wheat producers. In relation to farmers' attitudes toward risk, the macroeconomic effects and level of adoption of yield variability reducing cultivars were analyzed utilizing a production management decision-making model formulated with mathematical programming techniques. The study indicated that negative covariance between crops continues to be an effective means of reducing production risk associated with yield variability. However, under varying circumstances, agronomic research on the breeding of new soybean and wheat cultivars with reduced yield variability is worthwhile if there is only slight concurrent reduction in expected yields. -Author