An option on the average European futures prices for an efficient hog producer risk management
Martial Phélippé-Guinvarc’H () and
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Martial Phélippé-Guinvarc’H: Agricultural Insurance Service of GROUPAMASA, 126 Piazza Mont d’Est, 93199 Noisy Le Grand Cedex et Agrocampus Ouest, UMR1302 SMART, F-35000 Rennes, France
Authors registered in the RePEc Author Service: Martial Phélippé-Guinvarc'h
Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, 2010, vol. 91, issue 1, 27-42
The volatility of hog prices is high compared to most agricultural commodities. However, European hog producers do not benefit from any agricultural policy support. Through the continuous production process and induced selling activity on spot markets, producers benefit from a natural moving average product pricing. In addition, asymmetric price risk management is able to increase the expected utility of risk adverse hog producers. But, if there is a futures contract at the European Exchange (EUREX), there is no option market and as a consequence no derivative contracts on the European hog market. The article is presenting how financial intermediaries could offer an innovative derivative contract to complement the “naturall ” steady price of the French hog producers.
Keywords: price risk; margin risk; hog; futures market; replication portfolio; hedging (search for similar items in EconPapers)
JEL-codes: G13 Q14 Q18 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:jourae:v:91:y:2010:i:1:p:27-42
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