Do Australian woolgrowers manage price risk rationally?

Australian woolgrowers have not adopted price risk management in the last decade. This is despite a concerted effort at various times by participants in the wool industry to encourage growers to use hedging/forward selling. The explanation for the reluctance of woolgrowers to use futures market and forward pricing instruments lies not in market failure but in characteristics of wool producing farm businesses. In particular, the degree of business and financial risk and the interaction between the two helps to explain why woolgrowers do not use futures. In the context of the whole farm system, Australian woolgrowers are behaving as rational managers of wool price risk.


Subject(s):
Issue Date:
2006
Publication Type:
Journal Article
DOI and Other Identifiers:
1449-5937 (Other)
Record Identifier:
http://ageconsearch.umn.edu/record/122518
PURL Identifier:
http://purl.umn.edu/122518
Published in:
AFBM Journal, Volume 03, Number 2
Page range:
26-32
Total Pages:
7




 Record created 2017-04-01, last modified 2018-01-22

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