Did Producer Hedging Opportunities in the Live Hog Contract Decline?

Fabio C. Zanini and Philip Garcia

No 285701, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: The paper assesses the usefulness of selective hedging strategies when combined with forecast techniques in the live hog contract. The use of routine futures and options hedging is not attractive relative to a cash-only strategy. However, forecasting and hedging can contribute to price risk management improvement for risk-averse producers. Consistent with previous research, the results indicate that the live hog contract continues to offer producers attractive pricing opportunities. The findings suggest that the success of the new lean value carcass contract may depend on its ability to attract trading volume from outside the traditional production sector.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1997-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nc8191:285701

DOI: 10.22004/ag.econ.285701

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