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Forward Contracting With Uncertain Input Supplies: A Risk Programming Approach

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  • Dubman, Robert W.
  • Miller, Bill R.

Abstract

Forward contracting with uncertain input supplies and prices was investigated and a decision technique developed. Uncertain input supplies increased the risk in forward contracting. A case study of a large peanut marketing firm demonstrated the effect of uncertain input supplies on the optimal proportion of expected production to forward contract.

Suggested Citation

  • Dubman, Robert W. & Miller, Bill R., 1987. "Forward Contracting With Uncertain Input Supplies: A Risk Programming Approach," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 270130, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea87:270130
    DOI: 10.22004/ag.econ.270130
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    References listed on IDEAS

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    1. Falatoonzadeh, Hamid & Conner, J. Richard & Pope, Rulon D., 1985. "Risk Management Strategies To Reduce Net Income Variability For Farmers," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(1), pages 1-14, July.
    2. Heifner, Richard G., 1972. "Optimal Hedging Levels and Hedging Effectiveness in Cattle Feeding," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 24(2), pages 1-14, April.
    3. Gary E. Bond & Stanley R. Thompson, 1985. "Risk Aversion and the Recommended Hedging Ratio," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 870-872.
    4. Falatoonzadeh, Hamid & Conner, J. Richard & Pope, Rulon D., 1985. "Risk Management Strategies to Reduce Net Income Variability for Farmers," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(1), pages 117-130, July.
    5. Ronald W. Ward & Lehman B. Fletcher, 1971. "From Hedging to Pure Speculation: A Micro Model of Optimal Futures and Cash Market Positions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(1), pages 71-78.
    6. Steven T. Buccola, 1981. "The Supply and Demand of Marketing Contracts under Risk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 503-509.
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