Economic Analysis of Hybrid Rice Performance in Arkansas

Abstract

Despite the rapid producer adoption of hybrid rice (Oryza sativa L.) in recent years, the economic advantage of hybrid rice in the mid‐southern United States remains disputed. This study compared the economic risk and return of three popularly sown hybrid rice cultivars: XL723, Clearfield (CL) XL729, and CL XL745; and eight conventional rice cultivars: Cheniere, CL 142‐AR, CL 151, Francis, Roy J, Taggart, Templeton, and Wells, using University of Arkansas experimental test plot data from 2006 to 2010. Paddy and milling yield data on each cultivar were used to estimate a Just–Pope production function, allowing comparison of mean yields and mean yield variances across cultivars. A Monte Carlo simulation was used to compare net returns and net return variance (risk) across hybrid and conventional cultivars. Just–Pope estimation results indicated that hybrid cultivars exhibited mean paddy yield premiums of 1.6 to 2.4 Mg ha–1 relative to the best‐performing conventional cultivar (Francis); furthermore, the hybrid yield advantage was not associated with increased yield risk. Among hybrid‐CL and conventional‐CL cultivars, hybrid milling quality was not statistically different. Among non‐CL cultivars, the hybrid XL723 exhibited a mean head rice yield premium relative to conventional alternatives. Monte Carlo simulation results suggested that the net revenue advantage of hybrid cultivars makes them preferable to conventional alternatives in the CL and non‐CL categories across the entire range of producer risk preferences considered in this study.