Price Risk Management Strategies for Virginia Dairy Producers

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dc.contributor.authorAndino, Alexandra Elizabethen
dc.contributor.committeechairPurcell, Wayne D.en
dc.contributor.committeememberGroover, Gordon E.en
dc.contributor.committeememberReaves, Dixie Wattsen
dc.contributor.departmentAgricultural and Applied Economicsen
dc.date.accessioned2014-03-14T20:57:49Zen
dc.date.adate2005-01-06en
dc.date.available2014-03-14T20:57:49Zen
dc.date.issued2004-12-15en
dc.date.rdate2005-01-06en
dc.date.sdate2004-12-22en
dc.description.abstractThe 1996 and 2002 Farm Bill changes in milk support price legislation deregulated the market and milk prices are more volatile than ever. The use of a mechanism to reduce farmers' exposure to volatile milk prices has therefore become essential. This study evaluates the impact of two hedging strategies, one conservative and the other an intermediate one (more sophisticated). Optimal parameters for the two strategies are searched over a period of 5 years. Then, the performance, in terms of increased profitability and reduced variation, is assessed and the best performer is chosen and applied to an out-of-sample dataset. With the in-sample data, both strategies generate higher mean monthly profits than with the no-hedging option. Comparison of both strategies indicates that the intermediate strategy outperforms the conservative one in terms of higher profitability and lower variance. Out-of-sample results confirm the findings of the in-sample results. The additional profits and the reduction in volatility can make the difference between keeping a farm profitable and bankruptcy.en
dc.description.degreeMaster of Scienceen
dc.identifier.otheretd-12222004-124007en
dc.identifier.sourceurlhttp://scholar.lib.vt.edu/theses/available/etd-12222004-124007/en
dc.identifier.urihttp://hdl.handle.net/10919/37159en
dc.publisherVirginia Techen
dc.relation.haspartETD_Alexandra_Andino_Final.pdfen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectBasisen
dc.subjectMilken
dc.subjectDairy producersen
dc.subjectRisk Management Strategiesen
dc.subjectTarget Priceen
dc.subjectMoving Averagesen
dc.titlePrice Risk Management Strategies for Virginia Dairy Producersen
dc.typeMaster's projecten
thesis.degree.disciplineAgricultural and Applied Economicsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.levelmastersen
thesis.degree.nameMaster of Scienceen

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