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Factors influencing hedging decision: evidence from Brazilian citrus growers

Author

Listed:
  • Marcelo José Carrer
  • Rodrigo Lanna Franco da Silveira
  • Hildo Meirelles de Souza Filho

Abstract

The purpose of this study was to analyse the hedging behaviour of 98 citrus growers from the State of Sao Paulo, Brazil. Marketing behaviour was modelled as a choice between spot market, short and long‐term forward contracts. A multinomial logistic regression model was used to evaluate the role of behavioural, personal and managerial variables in the choice. Results indicated that the factors which explain the use of forward contracts by citrus growers are the following: risk propensity; trade with juice processing companies; farming diversification; overconfidence in management; participation in pools; use of management tools; and technical assistance. The results can be useful for farmers, policymakers, government agencies, traders and extension agents.

Suggested Citation

  • Marcelo José Carrer & Rodrigo Lanna Franco da Silveira & Hildo Meirelles de Souza Filho, 2019. "Factors influencing hedging decision: evidence from Brazilian citrus growers," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), pages 1-19, January.
    • Handle: RePEc:bla:ajarec:v:63:y:2019:i:1:p:1-19
    DOI: 10.1111/1467-8489.12282
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    Cited by:

    1. Ishak, Phoebe W., 2022. "Murder nature: Weather and violent crime in rural Brazil," World Development, Elsevier, vol. 157(C).
    2. Zhanwen Shi & Erbao Cao, 2020. "Contract farming problems and games under yield uncertainty," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1210-1238, October.
    3. Franco Da Silveira, Rodrigo Lanna & Davoli Alvarenga, Mayara & Luna, Ivette & Coltri, Priscila Pereira & Gonçalves, Renata Ribeiro Do Valle & Torres, Guilherme Almussa Leite, 2024. "The Role Of Risk Perceptions And Risk Attitudes On Hedging Decisions: Evidence From Coffee Farmers," 2024 Annual Meeting, July 28-30, New Orleans, LA 343570, Agricultural and Applied Economics Association.
    4. Markus Arlindo Monteiro & Bennie Grové & Nicolette Matthews, 2022. "Developing a Moving Average Crossover Strategy as an Alternative Hedging Strategy for the South Africa Maize Market," Agriculture, MDPI, vol. 12(8), pages 1-14, August.

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