The Effect of Hog Futures in Stabilizing Hog Production
Chunlei Li,
Gangyi Wang (awgy@cau.edu.cn),
Yuzhuo Shen and
Anani Amètépé Nathanaël Beauclair
Additional contact information
Chunlei Li: College of Economics and Management, Northeast Agricultural University, No. 600 Changjiang Road, Harbin 150030, China
Gangyi Wang: College of Economics and Management, Northeast Agricultural University, No. 600 Changjiang Road, Harbin 150030, China
Yuzhuo Shen: Institute of Science and Technology Information, China Academy of Tropical Agricultural Sciences, No. 4 Xueyuan Road, Haikou 571101, China
Anani Amètépé Nathanaël Beauclair: College of Economics and Management, Northeast Agricultural University, No. 600 Changjiang Road, Harbin 150030, China
Agriculture, 2024, vol. 14, issue 3, 1-16
Abstract:
China’s large-scale hog farmers are playing an increasingly important role in promoting the stable development of the hog industry. Taking large-scale hog enterprises as samples, based on hog sales data from January 2019 to July 2022, this paper adopts a two-way fixed-effects model to test the impact, mechanism, and heterogeneity of hog futures on the production stability of large-scale hog farmers. The study found that hog futures help promote stable production of large-scale farmers. This finding still holds after a series of robustness tests. The mechanism analysis found that, first, hog futures help large-scale farmers expand their risk management factor inputs. Second, hog futures help reduce the impact of hog price risk on production. Finally, hog futures help stabilize farmers’ production expectations. The moderating effects analysis found that the stabilizing effect of hog futures will enhance as farmers’ share of hog farming operations increases. Heterogeneity analysis found that when hog prices fluctuate negatively, hog futures help promote the stable production of large-scale farmers. When hog prices fluctuate positively, the production stabilization effect of hog futures is not obvious. Therefore, hog enterprises should be encouraged to participate in hog futures hedging transactions to promote stable hog production.
Keywords: hog futures; stable production; expand production; risk hedging; stable expectations (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jagris:v:14:y:2024:i:3:p:335-:d:1342431
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