IDEAS home Printed from https://ideas.repec.org/a/ags/auagre/125837.html
   My bibliography  Save this article

Farmer decisions about selling wheat and managing wheat price risk in Australia

Author

Listed:
  • Williams, John
  • Malcolm, Bill

Abstract

Making farm decisions is difficult, especially making decisions about selling and pricing wheat in deregulated supply chains. This study, conducted prior to export deregulation, sought to identify which factors were important to northern New South Wales (NSW) wheat growers when they were making decisions about wheat selling and price risk, under production and market uncertainty. Key questions were about how they make these decisions and the implications, particularly for larger-sized farmers, merchants, end-users, bankers, advisors and trainers. The research aim was to test the behaviour of users and non-users of five selling methods and six pricing-hedging strategies against eighteen management and seventeen risk attitude-adoption questions. The findings from this research will assist understanding of farmer decision-making. Information about growers’ decision processes on wheat selling and pricing will be helpful to supply chain intermediaries and service personnel in improving the targeting and alignment of growers. More research is required on the cross-usage of different selling-pricing methods, the interdependence between discretionary costs of production and selling-pricing decisions, how speculative storage compares with on-farm rental storage of pre-sold product that integrates the farmer with the supply chain, and how speculative storage affects cash flow and debt.

Suggested Citation

  • Williams, John & Malcolm, Bill, 2012. "Farmer decisions about selling wheat and managing wheat price risk in Australia," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 20, pages 1-10.
  • Handle: RePEc:ags:auagre:125837
    DOI: 10.22004/ag.econ.125837
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/125837/files/Williams_Malcolm.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.125837?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Byerlee, Derek R. & Anderson, Jock R., 1982. "Risk, Utility and the Value of Information in Farmer Decision Making," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(03), pages 1-16, December.
    2. Kingwell, R. S. & Morrison, D. A. & Bathgate, A. D., 1992. "The effect of climatic risk on dryland farm management," Agricultural Systems, Elsevier, vol. 39(2), pages 153-175.
    3. Sartwelle, James D., III & O'Brien, Daniel M. & Tierney, William I., Jr. & Eggers, Tim, 2000. "The Effect Of Personal And Farm Characteristics Upon Grain Marketing Practices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(1), pages 1-17, April.
    4. Wesley N. Musser & George F. Patrick & David T. Eckman, 1996. "Risk and Grain Marketing Behavior of Large-Scale Farmers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 18(1), pages 65-77.
    5. Tomek, William G. & Peterson, Hikaru Hanawa, 2000. "Risk Management in Agricultural Markets: A Survey," Staff Papers 121140, Cornell University, Department of Applied Economics and Management.
    6. Nuthall, P. L., 2001. "Managerial ability -- a review of its basis and potential improvement using psychological concepts," Agricultural Economics, Blackwell, vol. 24(3), pages 247-262, March.
    7. Graham R. Marshall & Kevin A. Parton & G.L. Hammer, 1996. "Risk Attitude, Planting Conditions And The Value Of Seasonal Forecasts To A Dryland Wheat Grower," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 40(3), pages 211-233, December.
    8. Barry K. Goodwin & Ted C. Schroeder, 1994. "Human Capital, Producer Education Programs, and the Adoption of Forward-Pricing Methods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(4), pages 936-947.
    9. Sartwelle, James & O'Brien, Daniel & Tierney, William & Eggers, Tim, 2000. "The Effect of Personal and Farm Characteristics upon Grain Marketing Practices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(1), pages 95-111, April.
    10. Gray, Roger W. & Rutledge, David J.S., 1971. "The Economics of Commodity Futures Markets: A Survey," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 39(04), pages 1-52, December.
    11. Ohlmer, Bo & Olson, Kent & Brehmer, Berndt, 1998. "Understanding farmers' decision making processes and improving managerial assistance," Agricultural Economics, Blackwell, vol. 18(3), pages 273-290, May.
    12. Glenn L. Johnson, 1957. "Methodology for Studying Decision Making," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 39(5), pages 1215-1226.
    13. Xu, Pei & Alexander, Corinne E. & Patrick, George F. & Musser, Wesley N., 2005. "Effects Of Farmers' Risk Attitudes And Personality Types On Production And Marketing Decisions," Staff Papers 28677, Purdue University, Department of Agricultural Economics.
    14. Bo ÖhlméYr & Kent Olson & Berndt Brehmer, 1998. "Understanding farmers' decision making processes and improving managerial assistance," Agricultural Economics, International Association of Agricultural Economists, vol. 18(3), pages 273-290, May.
    15. Fausti, Scott W. & Gillespie, Jeffrey M., 2006. "Measuring risk attitude of agricultural producers using a mail survey: how consistent are the methods?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 50(2), pages 1-18, June.
    16. Glenn L. Johnson, 1952. "Handling Problems of Risk and Uncertainty in Farm Management Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 34(5), pages 807-817.
    17. Bond, Gary E. & Wonder, Bernard, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-19, April.
    18. Gary E. Bond & Bernard Wonder, 1980. "Risk Attitudes Amongst Australian Farmers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 16-34, April.
    19. B.I. Shapiro & B. Wade Brorsen, 1988. "Factors Affecting Farmers' Hedging Decisions," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 10(2), pages 145-153.
    20. Marshall, Graham R. & Parton, K.A., 1996. "Risk Attitude, Planting Conditions and the Value of Climate Forecasts to a Dryland Wheat Grower," 1996 Conference (40th), February 11-16, 1996, Melbourne, Australia 156433, Australian Agricultural and Resource Economics Society.
    21. Simmons, Phil & Rambaldi, Alicia N., 1997. "Potential demand for hedging by Australian wheat producers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 41(2), pages 1-12.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Williams, J., 2013. "Wheat and corn price skewness and volatility: Risk management implications for farmers and end users," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 21, pages 1-20.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jason R.V. Franken & Joost M.E. Pennings & Philip Garcia, 2014. "Measuring the effect of risk attitude on marketing behavior," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 525-535, September.
    2. Feil, J.-H. & Anastassiadis, F. & Mußhoff, O. & Schilling, P., 2015. "Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.
    3. Carrer, Marcelo José & Silveira, Rodrigo Lanna F. & Meirelles De Souza Filho, Hildo, 2017. "Citrus Producers' Choice of Price Risk Management Tools," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258352, Agricultural and Applied Economics Association.
    4. Caroline Roussy & Aude Ridier & Karim Chaib & Marie Boyet, 2018. "Marketing contracts and risk management for cereal producers," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 616-630, June.
    5. Bignebat, C., 2018. "Learning process in marketing contract choice: the case of cereals in the Paris Basin," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277233, International Association of Agricultural Economists.
    6. Frasa, Stefanie & Carlberg, Jared & Hogan, Robert, 2015. "Use of Contracts by Prairie Agricultural Producers," Working Papers 232328, Structure and Performance of Agriculture and Agri-products Industry (SPAA).
    7. John W. Ritchie & G. Yahya Abawi & Sunil C. Dutta & Trevor R. Harris & Michael Bange, 2004. "Risk management strategies using seasonal climate forecasting in irrigated cotton production: a tale of stochastic dominance," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(1), pages 65-93, March.
    8. Roussy, Caroline & Rider, Aude & Chaib, Karim & Boyet, Marie, 2017. "Marketing Contracts and Risk Management for Cereal Producers," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261106, European Association of Agricultural Economists.
    9. Jordaan, Henry & Grove, Bennie, 2007. "Factors Affecting Maize Producers Adoption of Forward Pricing in Price Risk Management: The Case of Vaalharts," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-18, December.
    10. Aymeric Ricome & Arnaud Reynaud, 2022. "Marketing contract choices in agriculture: The role of price expectation and price risk management," Agricultural Economics, International Association of Agricultural Economists, vol. 53(1), pages 170-186, January.
    11. Jordaan, Henry & Grove, Bennie, 2008. "Factors affecting the use of forward pricing methods in price risk management with special reference to the influence of risk aversion," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(1), pages 1-14, March.
    12. Yang, Xi & Miao, Ruiqing & Khanna, Madhu, 2014. "Contracting in the Presence of Insurance: The Case of Bioenergy Crop Production," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170188, Agricultural and Applied Economics Association.
    13. Vassalos, Michael & Li, Yingbo, 2016. "Assessing the Impact of Fresh Vegetable Growers’ Risk Aversion Levels and Risk Preferences on the Probability of Adopting Marketing Contracts: A Bayesian Approach," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(1), pages 1-18, February.
    14. Ueckermann, E.M. & Blignaut, J.N. & Gupta, Rangan & Raubenheimer, J., 2008. "Modelling South African grain farmers’ preferences to adopt derivative contracts using discrete choice models," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(2), pages 1-18, June.
    15. Mofokeng, Maine & Vink, Nick, 2013. "Factors Affecting the Hedging Decision of Maize Farmers in Gauteng Province," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161465, African Association of Agricultural Economists (AAAE).
    16. Katchova, Ani L., 2013. "Agricultural Contracting and Agrifood Competition," Staff Papers 164515, University of Kentucky, Department of Agricultural Economics.
    17. Franken, Jason R.V. & Pennings, Joost M.E. & Garcia, Philip, 2012. "Measuring Risk Attitude and Relation to Marketing Behavior," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124471, Agricultural and Applied Economics Association.
    18. Nuthall, Peter L., 2012. "The intuitive world of farmers – The case of grazing management systems and experts," Agricultural Systems, Elsevier, vol. 107(C), pages 65-73.
    19. Elisabeth Vollmer & Daniel Hermann & Oliver Musshoff, 2019. "The disposition effect in farmers’ selling behavior: an experimental investigation," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 177-189, March.
    20. Graham R. Marshall & Kevin A. Parton & G.L. Hammer, 1996. "Risk Attitude, Planting Conditions And The Value Of Seasonal Forecasts To A Dryland Wheat Grower," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 40(3), pages 211-233, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:auagre:125837. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: http://www.agrifood.info/review/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.