Hedging Break-Even Biodiesel Production Costs Using Soybean Oil Futures

The effectiveness of hedging volatile input prices for biodiesel producers is examined over one- to eight-week time horizons. Results reveal that hedging break-even soybean costs with soybean oil futures offers significant reductions in input price risk. The degree of risk reduction is dependent upon type of hedge, naïve or risk-minimizing, and upon time horizon. In contrast, cross-hedging break-even poultry fat costs with soybean oil futures failed to reduce input price risk.


Issue Date:
2008
Publication Type:
Journal Article
DOI and Other Identifiers:
0738-8950 (Other)
PURL Identifier:
http://purl.umn.edu/90553
Published in:
Journal of Agribusiness, Volume 26, Number 1
Page range:
61-75
Total Pages:
15




 Record created 2017-04-01, last modified 2017-08-25

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