IMPACTS OF ENERGY ALLOCATION ON INCOME AND RISK FOR CROP PRODUCERS

Abstract

A quadratic programming model was used to explore the impacts of fuel allocation levels on crop producers. Impact on. expected income levels, risk levels and Btu consumption are evaluated. An allocation level which reduced diesel fuel consumption by about 20 percent would reduce expected Income by about $77 per gallon, reduce the standard deviation of income by about$21 per gallon, and reduce total energy consumption by about 220 thousand Btu's per gallon. The use of energy based inputs other than diesel fuel would not change much until more drastic reductions in diesel fuel allocations were imposed