Using Private Risk Management Instruments To Manage Counter-Cyclical Payment Risks Under The New Farm Bill
This research evaluates whether or not hedging strategies using call options on the New York Board of Trade cotton futures can be effectively used to protect the new counter-cyclical payment on cotton. Results indicate that some level of counter-cyclical payment hedging is optimal for risk averse decision makers. Optimal hedge ratios depend on planting time expectations of the marketing year average price as well as on what crop, if any, has been planted on the base acres receiving the counter-cyclical payment.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.agebb.missouri.edu/ncrext/ncr134/|
When requesting a correction, please mention this item's handle: RePEc:ags:ncrthr:18975. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.