Does yield risk differ across soil types? Evidence from Mississippi Variety Trials

Abstract

An extant amount of studies has evaluated the impact of soil crop yield. However, only few studies examined the influence of soil yield variability (higher moments). This research evaluates the impact of soil on yield and examines whether corn yield variability (risk) changes with soil types. The study uses the data from the Mississippi Agricultural and Forestry Experiment Station annual corn variety trial from 2000-2018 and the PRISM climate group. The two-step Just-Pope (1978,1979) production function is employed. Pooled, random-effects, and fixed-effects models are estimated by OLS and FGLS for the mean equations. The dependent variables of the variance equations are the squared residuals estimated from the mean equations. The results from the study show that average corn yields were higher in loam soils than in clay soils. Also, loam soil was associated with a considerable magnitude of corn yield risk compared to clay soils. The study provides substantial proof of the impact of soil type in corn yield risk. As a results, the RMA of the USDA may integrate soil information in their rating technique to achieve higher accuracy of crop insurance premiums.