HEDGING CARCASS BEEF TO REDUCE THE SHORT-TERM PRICE RISK OF MEAT PACKERS

Hedging in the live cattle futures market has largely been viewed as a method of reducing producer's price over a rather lengthy production period (three to six months). Meat packers and processors also face price risk. However, packers' and processors' price risk lies on the upside (i.e., risk is due to price increases) and is also relatively short-term (usually a few days). The possibility of reducing packers' and processors' price risk through long-hedging on the live cattle contract for a short period of time (one week) was investigated. The results suggest some potential benefits to meat packers form following a routine hedging strategy.


Issue Date:
1985-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/32332
Published in:
Western Journal of Agricultural Economics, Volume 10, Number 2
Page range:
330-337
Total Pages:
8




 Record created 2017-04-01, last modified 2017-10-21

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