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The cost of forward contracting in the Mississippi barge freight river market

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  • Bradley Isbell
  • Andrew M. McKenzie
  • B. Wade Brorsen

Abstract

Barges on the Mississippi River system are traded via a forward market. We find that risk premiums to use this market vary by season and in terms of which party bares the cost of forward contracting. During the summer season barge operators pay a risk premium. Yet during the rest of the year, elevator operators pay a premium to lock in rates.

Suggested Citation

  • Bradley Isbell & Andrew M. McKenzie & B. Wade Brorsen, 2020. "The cost of forward contracting in the Mississippi barge freight river market," Agribusiness, John Wiley & Sons, Ltd., vol. 36(2), pages 226-241, April.
    • Handle: RePEc:wly:agribz:v:36:y:2020:i:2:p:226-241
    DOI: 10.1002/agr.21611
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    References listed on IDEAS

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