...Lukas Sigl; Norbert Hirschauer Purpose Farmers are often advised to hedge their commodity prices on the commodity futures exchange, without sound scientific evidence to support this. This paper questions this rash advice and analyzes the impact of various hedging strategies based on wheat futures...

... effect on the intention to use commodity futures contracts. Practical implications Handling of price hedging instruments should be facilitated to increase farmers’ adoption. Effective marketing trainings, which can demonstrate the ability of commodity futures contracts to reduce price risk, could...

...Cory Walters; Richard Preston Purpose At the beginning of the production year producers face a complex risk management decision environment given by risks specific to their operation, multiple crop insurance contracts and hedging opportunities. The purpose of this paper is to provide a producer...

...Niels Pelka; Oliver Musshoff Purpose The use of weather derivatives is impaired with a basis risk which diminishes the hedging effectiveness and hinders the distribution of these risk management instruments in the agricultural sector. A frequently suggested approach to reduce the basis risk...

... insurance, weather derivatives mitigate risk associated with low intensity, high probability events and therefore offer the potential of a more complete hedge than insurance alone. Design/methodology/approach The authors conducted a survey of grain farmers in the province of Saskatchewan, Canada...

...Larry D. Makus; H. Holly Wang; Xiaomei Chen A utility maximization model is used to assess alternative risk management portfolios of Pacific Northwest non‐irrigated grain producers using three rotational practices. Risk management tools include hedging with wheat futures, yield insurance, two...

... at least $1 billion to insurance companies, and that the fair value of the government’s reinsurance services to insurance firms equals $78.7 million. In addition, various hedging strategies are examined for their potential to reduce the government’s reinsurance risk. The risk reduction achievable...

...Ashok K. Mishra; Hisham S. El‐Osta Crop insurance and hedging are two risk management strategies used by farmers to manage risk. Using a discrete choice model and farm‐level data, this study investigates the factors influencing farmers’ use of hedging and crop insurance as risk management...

.... The payoff is applied directly to the loan. This study introduces the general concept, reviews the literature, and develops and applies a particular model. Simulation results illustrate the interrelationship between options payoffs, strike prices, volatility, and downside financial risk reduction. Hedging...