Using the Futures Market to Lower the Farm Management Risks of Producing for Unknown Market Prices in the USA. A Farm Example of a Maize Hedger

P.J. van Blokland

No 346317, 10th Congress, The University of Reading, UK, July 10-15, 1995 from International Farm Management Association

Abstract: This paper illustrates a simple hedging procedure for reducing the risk of investing in production costs by locking in a predetermined price range. The emphasis is on planning and budgeting before committing resources to production. Success is measured as a return to management. The hedging methodology used in the paper is applicable to any agricultural enterprise where basis is known. It is probably impossible to hedge successfully without a good understanding of basis.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 10
Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ifma95:346317

DOI: 10.22004/ag.econ.346317

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