Date on Honors Thesis

Spring 5-5-2025

Major

Agribusiness Economics

Examining Committee Member

Dr. Jeffery Young

Examining Committee Member

Dr. Kristie Guffey

Examining Committee Member

Dr. Jeffery Osborne

Abstract/Description

Profitability remains a persistent challenge for grain farmers across the United States and globally. Without profitability, the continued operation of any grain farm becomes unsustainable. For grain farmers, profitability is not merely a financial goal but a crucial determinant of their livelihood. However, many grain producers face a significant obstacle: a lack of reliable tools to predict profitability and plan for the next season or make adjustments to existing operations. While budgets can offer a framework and tentative guidelines for farmers to follow, fluctuations in market prices can ultimately undermine these financial plans. The objective of this project is to develop a model to predict profitability within the Western Kentucky grain markets, with a particular focus on corn and soybeans. The research was conducted utilizing historical data on production budgets, yields, and market prices spanning from 2007 to 2021. Through the course of this study, a series of simulations were conducted, which generated a broad range of potential profit outcomes. These profit ranges were subsequently converted into Probability Distribution Functions, offering a spectrum of probabilities ranging from 0% to 100%. The resulting outcomes, along with the supplementary simulation data, have the potential to serve as valuable tools for grain producers, helping them navigate external factors that may influence profitability during any given growing season.

Download

Share

COinS