Understanding Profitability of Georgia Blueberry Growers Adopting a Stochastic Approach

Abstract

We use a stochastic approach to assess the returns from blueberry production regarding observed blueberry price and yield variability. We extend the deterministic budget to stochastic by using triangular distribution and using Monte Carlo simulations. We use net present value (NPV) to assess and compare the returns. We observed disparity in the expected NPVs from two budget systems, and the chance of getting positive NPV studied under the stochastic budget was too low (23.85%–30.24%). This result shows the need for a stochastic approach to analyze growers’ profit, which helps making investment decisions. Moreover, this study is useful for farmers and farm risk analyzers.