Do Australian woolgrowers manage price risk rationally?
AbstractAustralian woolgrowers have not adopted price risk management in the last decade. This is despite a concerted effort at various times by participants in the wool industry to encourage growers to use hedging/forward selling. The explanation for the reluctance of woolgrowers to use futures market and forward pricing instruments lies not in market failure but in characteristics of wool producing farm businesses. In particular, the degree of business and financial risk and the interaction between the two helps to explain why woolgrowers do not use futures. In the context of the whole farm system, Australian woolgrowers are behaving as rational managers of wool price risk.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Australasian Farm Business Management Network in its journal AFBM Journal.
Volume (Year): 03 (2006)
Issue (Month): 2 ()
price risk management; motivation for hedging; business risk; financial risk; Australian woolgrow; Farm Management;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, 03.
- Harwood, Joy L. & Heifner, Richard G. & Coble, Keith H. & Perry, Janet E. & Somwaru, Agapi, 1999. "Managing Risk in Farming: Concepts, Research, and Analysis," Agricultural Economics Reports 34081, United States Department of Agriculture, Economic Research Service.
- Simmons, Phil, 2002. "Why do farmers have so little interest in futures markets?," Agricultural Economics, Blackwell, vol. 27(1), pages 1-6, May.
- Oscar Vergara & Keith H. Coble & Thomas O. Knight & George F. Patrick & Alan E. Baquet, 2004. "Cotton producers' choice of marketing techniques," Agribusiness, John Wiley & Sons, Ltd., vol. 20(4), pages 465-479.
- Jackson, Elizabeth & Quaddus, Mohammed & Islam, Nazrul & Stanton, John, 2008. "A mixed-method approach for determining the risk and complexity farmers associate with using forward contracts," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 42305, Agricultural Economics Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.