An economic comparison of alternative rice production systems in Arkansas
2004
Watkins, K.B. | Anders, M.M. | Windham, T.E.
Weak farm prices, high production costs, and potential future regulation of sediment loadings in waterways force many Arkansas rice producers to consider adopting new management systems to maintain profitability. However, rice producers are reluctant to try new systems without information about the economic outcomes. This paper uses data from a long-term rice-based cropping systems study at Stuttgart, Arkansas to evaluate the profitability and economic risk associated with alternative rice production systems. Economic returns and costs are compared for 40 different rice production systems for the years 2000 and 2001, and statistical analysis is performed to determine which production components (rotation, tillage, fertility, and year) significantly impact rice system net returns. A safety-first criterion is used to identify production systems that would be preferred by risk-averse rice producers. All production components were found to significantly impact rice system net returns during the two-year period. However, the most profitable systems tended to be two-year rice-soybean conventional till systems. These systems exhibited cost savings relative to other systems due to lower production costs for soybeans when compared to rice or corn. Risk analysis indicated that risk-averse rice producers would also prefer using two-year rice soybean conventional till systems to other rice systems. No-till systems were generally less profitable than conventional till systems in 2000 but were generally more profitable than conventional till systems in 2001. No-till may become more economically competitive with conventional till as management improves and soil conditions stabilize over time.
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