LAUSR

Purpose This study documented the level of risk in the Quebec egg sector (conventional and specialty eggs) and analyzed the optimal choices of Quebec egg producer that must allocate limited resources to production of different types of eggs. Design/methodology/approach A quadratic programming approach applied to expected mean-variance models is used to analyze the impact of risk on decision to invest when the resources must be allocated to different type of production that have different risk levels. The model is calibrated using monthly data from 2009-2016. Findings Results indicated multiple uncertainty sources (technological, cost of production, price of eggs) that vary according to the types of eggs. Given risk aversion parameters, producer would favor production modes with the lowest producers’ price variance, which correspond to free run eggs. Results also indicated that in response to a greater intensity of risk aversion, the course of action producers may choose is to increase the relative product...