IDEAS home Printed from https://ideas.repec.org/p/ags/nc8191/285630.html

Ex Ante Basis Risk in the Live Hog Futures Contract: Has Hedgers' Risk Increased?

Author

Listed:
  • Garcia, Phil
  • Sanders, Dwight R.

Abstract

Basis behavior has a direct affect on hedging and pricing decisions. Here, ex ante basis risk for selected live hog cash markets is analyzed from 1985 through 1994. Econometric, time series, and naive (three year average) models are used to forecast a nearby live hog basis. Measures of basis risk are based on mean squared forecast errors and market timing ability. The fndings suggest that regardless of the forecasting method basis risk has not increased nor has basis predictability declined relative to historical levels. The recent decline in demand for futures contracts is likely attributable to other structural changes in the industry.

Suggested Citation

  • Garcia, Phil & Sanders, Dwight R., 1995. "Ex Ante Basis Risk in the Live Hog Futures Contract: Has Hedgers' Risk Increased?," 1981-1999 Conference Archive 285630, NCR-134/ NCCC-134 Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nc8191:285630
    DOI: 10.22004/ag.econ.285630
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/285630/files/confp28-95.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.285630?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:nc8191:285630. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.farmdoc.illinois.edu/nccc134/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.