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Introduction to Hedging Agricultural Commodities With Futures

Joe Parcell, Vern Pierce and, Jason Franken (August, 2011)

Summary

Producers of agricultural commodities regularly face price and production risks. Furthermore, increased global free trade and changes in domestic agricultural policy have increased these risks. As the variability of price increases the variability of revenue, producers are realizing the importance of risk management as a component of their management strategies.