Risk Analysis of Tillage Alternatives with Government Programs

Abstract

Abstract Stochastic dominance analysis of two tillage systems, conventional tillage and no‐tillage, for five crop rotations, wheat‐fallow, grain sorghum‐fallow, continuous wheat, continuous grain sorghum, and wheat‐grain sorghum‐fallow, shows that risk‐averse managers prefer a conventional tillage wheat‐sorghum‐fallow system. Small changes in production costs or yields lead to indifference between this system and the no‐tillage wheat‐sorghum‐fallow and no‐till and conventional wheat‐fallow systems. Participation in the basic government commodity program generally increases average net returns and lowers variation of returns. Government commodity program payments calculated under a variety of scenarios do not generally encourage the use of no‐till practices for grain sorghum and wheat in the central Great Plains.