This study examines hedging strategies for commodity processors generally and soybean crushers specifically. Processors require hedging strategies built around processing multiple batches each year. Each batch requires the purchase of inputs, transformation of inputs into outputs, and sale of...

This paper develops a general model of cash and futures markets for a storable commodity. The cash market model is characterized by the incorporation of long hedged to establish contractual claims against existing inventories, which may be either short hedged or unhedged. The futures market...

This study examines strategies for hedging processing operations generally and uses soybean processing as a specific example. The approach assumes a mean-variance utility function but because of the focus on hedging, the analysis concentrates on risk minimization with risk defined as the...

A Rotterdam demand model is used to detect evidence of structural change in beef, pork, and chicken demands. The demand model is partially inverted prior to estimation to account for meat supply fixity. Estimation uses a likelihood maximization routine applied to 1950 through 1985 annual data....

This study focuses on hedging effectiveness defined as the proportionate price risk reduction created by hedging. By mathematical and simulation analysis we determine the following: (a) the regression R2 in the hedge ratio regression will generally overstate the amount of price risk reduction...

This study examines the effect of transaction frequency on profit and cash flow risk for firms that periodically purchase inputs, continuously transform inputs into outputs, and periodically sell output. Soybean-processing profit and cash flows are computed for unhedged, direct-hedged, and...

Abstract Currently Unavailable.

This article reports on member awareness and member evaluation of dairy cooperative services in the North Central Region. Members seem well informed about services provided by only a few cooperatives. Years of cooperative membership, size of a producer's opration, awareness of the service by...

Agribusinesses make long-term plant-investment decisions based on discounted cash flow. It is therefore incongruous for an agribusiness firm to use cash flow as a plant-investment criterion and then to completely discard cash flow in favor of batch profits as an operating objective. This paper...