Optimal Hedging Levels and Hedging Effectiveness in Cattle Feeding

Richard G. Heifner

Journal of Agricultural Economics Research, 1972, vol. 24, issue 02, 14

Abstract: Optimal hedging level, minimum-risk hedging level, and hedging effectiveness are defined in a manner consistent with portfolio theory and used to analyze hedging potential in cattle feeding. Estimated upper limits on optimal hedging levels ranged from 0.56 to 0.88 unit of short futures per unit of four types of slaughter cattle produced at five locations. When futures trading costs are taken into account, optimal hedging levels are depressed below these limits, depending upon the resource availabilities and profit expectations of individual firms. Location, grade, and sex of the cattle fed have small effects on optimal hedging levels and hedging effectiveness.

Keywords: Agricultural and Food Policy; Livestock Production/Industries; Production Economics (search for similar items in EconPapers)
Date: 1972
References: Add references at CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://ageconsearch.umn.edu/record/147014/files/2Heifner_24_2.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uersja:147014

DOI: 10.22004/ag.econ.147014

Access Statistics for this article

More articles in Journal of Agricultural Economics Research from United States Department of Agriculture, Economic Research Service Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().