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 237437, International Working Paper Series from University of Florida, Food and Resource Economics Department

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 successfally without a good · 'f.'nderstanding of basis.

Keywords: Crop Production/Industries; Farm Management; Marketing (search for similar items in EconPapers)
Pages: 13
Date: 1995-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ufliwp:237437

DOI: 10.22004/ag.econ.237437

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