The cost of forward contracting in the Mississippi barge freight river market

Bradley Isbell, Andrew M. McKenzie and B Brorsen

Agribusiness, 2020, vol. 36, issue 2, 226-241

Abstract: Barges on the Mississippi River system are traded via a forward market. We find that risk premiums to use this market vary by season and in terms of which party bares the cost of forward contracting. During the summer season barge operators pay a risk premium. Yet during the rest of the year, elevator operators pay a premium to lock in rates.

Date: 2020
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https://doi.org/10.1002/agr.21611

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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:36:y:2020:i:2:p:226-241

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