Producer-Level Hedging Effectiveness of Class III Milk Futures

Dwight Sanders, Jonathan Schneider and Ira Altman

No 34983, 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama from Southern Agricultural Economics Association

Abstract: Mailbox milk prices from a representative dairy operation in Illinois are used to gauge the farm-level hedging effectiveness of Class III milk futures. The results indicate a hedge ratio of 0.85 can reduce price risk by over 90%. The importance of seasonal basis components is highlighted.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2007
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