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Farm Use of Futures, Options, and Marketing Contracts
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Online Location
https://ageconsearch.umn.edu/record/305690
Publication date
31/10/2020
Number of Pages
39
Language:
English
Type of Publication:
Articles & Journals
Focus Region:
North America
Focus Topic:
Rural Finance / Insurance
Agricultural Value Chains / Agri-Businesses
Gender / Youth / Social Inclusion
Market / Trade
Type of Risk:
Market-related
Type of Risk Managment Option:
Risk transfer
Commodity:
Crops
Author
Daniel Prager; Christopher Burns; Sarah Tulman; James MacDonald
Organization
United States Department of Agriculture
ABSTRACT
Farming can be a risky endeavor. Weather, pests, and disease can diminish the output from a field or herd. Changes in prices can reduce revenues or increase costs. Farmers may manage the risks from market price fluctuations by using agricultural derivatives, such as futures and options contracts, and committing some production to marketing contracts. This study uses data from the 2016 Agricultural Resource Management Survey to describe the use of futures, options, and marketing contracts by producers, with a primary focus on corn and soybeans.