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Improving wholesale beef and pork product cross hedging
Author(s) -
Hayenga Marvin L.,
Jiang Bingrong,
Lence Sergio H.
Publication year - 1996
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/(sici)1520-6297(199611/12)12:6<541::aid-agr4>3.0.co;2-3
Subject(s) - hedge , product (mathematics) , price risk , business , forward contract , economics , marketing , agricultural science , industrial organization , microeconomics , financial economics , futures contract , mathematics , ecology , geometry , environmental science , biology
This study examines possible causes for the poor performance that has characterized the forward pricing and hedging practices used by participants in meat processing and merchandising operations. Alternative methods of managing price risk or meat merchandisers are presented and evaluated. The empirical analysis suggests pork and beef slaughter firms and merchandisers should seriously consider using more sophisticated cross hedge models to improve upon the poor performance of some forward contracting and hedging programs currently in use. © 1996 John Wiley & Sons, Inc.