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A Producer-Level Cross-Hedge for Rough Rice Using Wheat Futures

Published online by Cambridge University Press:  05 September 2016

Thomas P. Zacharias ,
Mark D. Lange ,
William J. Gleason  and
Harlon D. Traylor
Thomas P. Zacharias
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge, LA 70803
Mark D. Lange
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge, LA 70803
William J. Gleason
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge, LA 70803
Harlon D. Traylor
Affiliation:
Department of Agricultural Economics and Agribusiness, Louisiana Agricultural Experiment Station, Louisiana State University Agricultural Center, Baton Rouge, LA 70803
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Abstract

This study explores the potential of routine preharvest cross-hedging of rough rice using wheat futures contract prices. A numerical simulation approach combined with risk efficiency analysis evaluates a wide range of cross-hedging alternatives. Results establish that farm-level cross-hedging can be considered a viable marketing alternative.

Keywords

ricewheatfutures pricingcross-hedgingrisk-efficiencyyield risk
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 19 , Issue 2 , December 1987 , pp. 75 - 82
Copyright
Copyright © Southern Agricultural Economics Association 1987

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