Optimal Land Allocation and Production Timing for Fresh Vegetable Growers under Price and Production Uncertainty

Abstract

Production timing is an essential element in fresh vegetable growers' efforts to maximize profitability and reduce income risks. The present study uses biophysical simulation modeling coupled with a dual crop (tomatoes, sweet corn) whole-farm economic formulation to analyze the effects of growers' risk aversion levels and price consideration (seasonal or annual price consideration) in expected net returns and production practices. The findings indicate that consideration of seasonal price trends results in higher expected net returns and greater opportunities to mitigate risk. Furthermore, risk aversion levels substantially influence production timing when seasonal price trends are considered.