Forecasting and Hedging: An Illustration of Risk Reduction in the Hog Industry

Jon A. Brandt

American Journal of Agricultural Economics, 1985, vol. 67, issue 1, 24-31

Abstract: Hog producers and first handlers can reduce the risk of unfavorable price fluctuations by combining the information from forecasting models with a selective hedging strategy. Six quarterly price-forecasting approaches (econometric, ARIMA, expert, naive, and two composites) were evaluated over the 1976–82 period using a simple yet pragmatic hedging decision rule. The results indicate that relatively modest improvements in prices received by producers or paid by first-handlers relative to cash marketing were possible. Statistically significant reductions in short-term risk exposure were achieved by both groups through most of the approaches evaluated.

Date: 1985
References: Add references at CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://hdl.handle.net/10.2307/1240820 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:ajagec:v:67:y:1985:i:1:p:24-31.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().