Innovative Hedging and Financial Services: Using Price Protection to Enhance the Availability of Agricultural Credit

Francesco Braga and Brian Gear

No 285728, 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: The use of currency translated average rate options is shown to be a cost effective way to hedge corn and soybean price risk in Ontario when the timing of the cash sales extends over several months. Standardized contracts incorporating the over-the-counter instrument may be developed, and could be offered as an add-on to an operating line of credit. Lower average commodity prices would result in a reduced principal repayment obligation. Overall this would also lead to improved credit risk and lower cost of capital.

Keywords: Marketing (search for similar items in EconPapers)
Date: 1998-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/285728/files/confp9-98.pdf (application/pdf)

Related works:
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:ags:nc8191:285728

DOI: 10.22004/ag.econ.285728

Access Statistics for this paper

More papers in 1981-1999 Conference Archive from NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management
Bibliographic data for series maintained by AgEcon Search ().