Risk Versus Reward, a Financial Analysis of Alternative Contract Specifications for the Miscanthus Lignocellulosic Supply Chain

Bioenergy Research

Volumn 8, Issue 2, 2015, Pages 644-656

  Yoder, Joshua R ^a   Alexander, Corinne ^b   Ivanic, Rastislav ^c   Rosch, Stephanie ^b   Tyner, Wallace ^b   Wu, Steven Y ^b  

^a Purdue University ^*  (United States)

^b PURDUE UNIVERSITY   (United States)

^c Ivanic Company   (United States)

Author keywords

Biofuel supply chain; Contract design; Miscanthus; Stochastic financial model

Indexed keywords

BIOFUELS; CHAINS; COST EFFECTIVENESS; COSTS; CROPS; INVESTMENTS; RISK MANAGEMENT; RISK PERCEPTION; STOCHASTIC MODELS; STOCHASTIC SYSTEMS; SUPPLY CHAINS;

BIOFUEL SUPPLY CHAINS; CONTRACT DESIGN; CONTRACT SPECIFICATIONS; FINANCIAL ANALYSIS; FINANCIAL MODELING; MISCANTHUS; PRODUCTION AND TRANSPORTATIONS; SUSTAINABLE SUPPLY CHAINS;

RISK ASSESSMENT;

EID: 84939958325     PISSN: 19391234     EISSN: 19391242     Source Type: Journal    
DOI: 10.1007/s12155-014-9548-z     Document Type: Article

References (26)

1. Sherrington C, Bartley J, Moran D (2008) Farm-level constraints on the domestic supply of perennial energy crops. Energy Policy 36:2504–2512
2. Yang X, Paulson N, Khanna M (2012) Optimal Contracts to Induce Biomass Production under Risk. Selected Paper prepared for presentation at the Agricultural & Applied Economics Association’s 2012 AAEA&NAREA Joint Annual Meeting, Seattle, WA, August 12-14, 2012
3. Larson JA, English BC, He L (2008) Risk and Return for Bioenergy Crops under Alternative Contracting Arrangements. Selected Paper prepared for presentation at the Southern Agricultural Economics Association Annual Meetings, Dallas, TX, February 2-6, 2008
4. Bocqueho G, Jacquet F (2010) The adoption of switchgrass and miscanthus by farmers: Impact of liquidity constraints and risk preferences. Energy Policy 38:2598–2607
5. Fewell J, Bergtold J, Williams J (2011) Farmers’ Willingness to Grow Switchgrass as a Cellulosic Bioenergy Crop: A State Choice Approach. Selected Paper prepared for presentation at the 2011 Joint Annual Meeting of the Canadian Agricultural Economics Society & Western Agricultural Economics Association, Banff, Alberta, Canada, June 29-July 1, 2011
6. Alexander C, Ivanic R, Rosch S, Tyner W, Wu SY, Yoder JR (2011) Contract theory and implications for perennial energy crop contracting. Energy Econo. doi:10.1016/j.eneco.2011.05.013
7. Griffith AP, Larson JA, English BC, McLemore DL (2012) Analysis of contracting alternatives for switchgrass as a production alternative on an East Tennessee beef and crop farm. AgBioforum 15(2):206–216
8. MacDonald J, Perry J, Ahearn MC, Banker D, Chambers W, Dimitri C, Key N, Nelson KE, Southard LW (2004) Contracts, Market, and Prices: Organizing the Production and Use of Agricultural Commodities. United States Department of Agriculture
9. Kreps DM (1990) A course in microeconomic theory. Princeton University Press, Princeton
10. Johnson CS, Foster KA (1994) Risk preferences and contracting in the U.S. Hog Industry. J Agric Appl Econ 26(2):393–405
11. Parcell J, Langemeier M (1997) Feeder-pig Producers and Finishers: Who Should Contract? Can J Agric Econ 317-27
12. Perrin R, Vogel K, Schmer M, Mitchell R (2008) Farm-scale production cost of switchgrass for biomass. Bioenergy Res 1(1):91–97
13. Guide to Using @Risk: Risk Analysis and Simulation Add-In for Microsoft Excel. Ithaca: Palisade Corporation. 2010. Available at: http://www.palisade.com/downloads/manuals/EN/RISK5_EN.pdf
14. Idaho National Laboratory Bioenergy Program (2009) Uniform-format feedstock supply system design for lignocellulosic biomass. U.S. Department of Energy, Idaho Falls
15. Jain AK, Khanna M, Erickson M, Huang H (2010) An integrated bio-geochemical and economic analysis of bioenergy crops in the Midwestern United States. Bioenergy. doi:10.1111/j.1757-1707.2010.01041.x
16. University of Kentucky Cooperative Extension Service (2009) Custom Machinery Rates Applicable to Kentucky (2009). University of Kentucky
17. Ivanic R (2009) Personal communication, interviewed by J.R. Yoder
18. Indiana State Climate Office (2000-2009) Climatological Data: Indiana
19. Richardson JW, Klose SL, Gray AW (2000) Procedure for estimating MVE probability distributions. J Agric Appl Econ 32(2):299–315
20. Tiffany DG (2007) Economic Comparison of Ethanol Production from Corn Stover and Grain. AURI Energy Users Conference, Redwood Falls, MN
21. Schurle B (1996) The impact of size on yield variability and crop insurance premiums. Rev Agric Econ 18(3):415–422
22. Guide to Using RISKOptimizer: Simulation Optimization for Microsoft Excel. Ithaca: Palisade Corporation. 2010. Available at: http://www.palisade.com/downloads/manuals/EN/RISKOptimizer5_EN.pdf
23. National Agricultural Statistics Service, USDA (2009) NASS Quick Stats. United States of America
24. Clark SF (2009) The profitability of transitioning to organic grain crops in Indiana. Am J Agric Econ 91(5):1497–1504
25. Dobbins C (2009) Average Estimated Cash Rents Per Acre By Geographic Areas and Land Class. Purdue Agricultural Economics Report, Purdue University. Available at: http://www.agecon.purdue.edu/extension/pubs/paer/2009/august/dobbins.asp
26. Blanco C, Soronow D (2001) Mean Reverting Processes- Energy Price Processes Used for Derivatives Pricing and Risk Management. Commodities Now