EVIDENCE OF FARMER FORWARD PRICING BEHAVIOR

Kevin McNew and Wesley Musser

No 28568, Working Papers from University of Maryland, Department of Agricultural and Resource Economics

Abstract: The current agricultural marketing literature has considerable controversy about the optimal use of hedging for farmers. Much of this literature has very limited data on farmer behavior and an evaluation of the outcome of this behavior. This paper uses data from a hedging game from Maryland marketing clubs for 1994-1998. Hypotheses concerning the consistency of farmer behavior with the research literature on hedging are considered. Results indicate that farmers do not achieve price enhancement from hedging. However, their decisions do not conform to implications of optimal hedging models in a number of dimensions. This analysis provides further information to help bridge the gap between academic research and practical hedging.

Keywords: Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 25
Date: 2000
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:umdrwp:28568

DOI: 10.22004/ag.econ.28568

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