Open AccessApplication of Markowitz Portfolio Theory to Producing the World Major Field Crops
Author(s) -
Natalia Vasylieva
Publication year - 2020
Publication title -
agris on-line papers in economics and informatics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.245
H-Index - 16
ISSN - 1804-1930
DOI - 10.7160/aol.2020.120409
Subject(s) - modern portfolio theory , rapeseed , portfolio , economics , revenue , agriculture , business , agricultural economics , agricultural science , financial economics , agronomy , environmental science , geography , finance , archaeology , biology
Development of growing cereals and oilseeds is a pressing issue for providing global food security and renewable energy. The study deals with applying methods of portfolio theory to mitigate natural and marketing uncertainties emerged from unstable yields and volatile prices for wheat, maize, barley, sunflower, soybeans, and rapeseed. The research outcome based on the utilization of Markowitz mean-variance indicators made possible to evaluate portfolio performances of the world top cereals and oilseeds producers. The study findings at a country level combined econometric forecasting of the crop revenues and modeling optimal portfolios of cereals and oilseeds subject to acceptable trade-offs between risks and expected revenues. The fulfilled calculations with Ukrainian focus clarified farmland allocations under cereal and oilseed crops to underpin biodiversity and keep firm positions in the world markets.