A Farm-Level Financial Analysis of Farmers' Use of Futures and Options under Alternative Farm Programs

Calum Turvey and Timothy Baker ()

American Journal of Agricultural Economics, 1990, vol. 72, issue 4, 946-957

Abstract: In this paper, we investigate the relationships of farm programs and farm finance on farmers' decisions to hedge with futures or options. Results from a two-period discrete sequential stochastic programming model of the farm firm indicates two important points. First, farmers' use of futures and options decreases in the presence of loan rates and target prices, and second, farms with high debt hedge more than farms with low debt. The results imply that evaluating farmers' use of futures and options based solely on market risks may exclude important information, namely participation in farm programs and the farm's capital structure.

Date: 1990
References: Add references at CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://hdl.handle.net/10.2307/1242626 (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:72:y:1990:i:4:p:946-957.

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 ().