Futures Markets and Marketing Firms: The U.S. Soybean-Processing Industry

Sergio Lence, Dermot Hayes and William H. Meyers

American Journal of Agricultural Economics, 1992, vol. 74, issue 3, 716-725

Abstract: A model of marketing firms in the presence of futures markets is presented and tested with data from the U.S. soybean-processing industry. Results show that production increases if output futures prices rise, material input cash prices fall, or the output cash-futures price relationship becomes more volatile. Sufficient assumptions for these results are expected-utility-maximizing competitive firms with nonincreasing absolute risk aversion and nonstochastic Leontief production functions, unbiased futures prices, and linearly related cash and futures prices. The standard marketing margin is inappropriate for analyzing market structure or risk in the presence of futures markets.

Date: 1992
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.2307/1242585 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Futures Markets and Marketing Firms: The U.S. Soybean-Processing Industry (1992)
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:74:y:1992:i:3:p:716-725.

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 ().