Feasibility of Hedging Milk Input Costs for a Dairy Processor: A Case Study
| dc.creator | Maynard, Leigh J. | |
| dc.date | 2017-04-01T15:08:28Z | |
| dc.date.accessioned | 2026-07-09T07:39:29Z | |
| dc.description | This case study evaluates milk input price-risk management strategies for a processor of refrigerated dairy products. The firm perceives price risk both when milk costs are over budget and when budgets are too conservative. Price-forecast ing models produced mean absolute percentage errors of sic to nine percent. Ina 2000-2008 simulation, hedging with Class ID milk futures reduced the variance of budget deviations by only 31 percent, while hedging with call options produced a similar cost profile with more predictable cash-flow requirements. Recommendations include using the price-forecasting models to improve budgeting accuracy but delaying the launch of a hedging program. | |
| dc.identifier | doi:10.22004/ag.econ.162128 | |
| dc.identifier | https://ageconsearch.umn.edu/record/162128/files/Maynard.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/162128 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/590740 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/162128 | |
| dc.title | Feasibility of Hedging Milk Input Costs for a Dairy Processor: A Case Study | |
| dc.type | Text |