Cross Hedging Cattle Rations Using Corn Futures
Abstract
The feasibility of cross hedging cattle ration costs using corn futures was investigated. Simulation results for 1985-89 showed that unpredictable variations in ration costs could be reduced up to 54% with cross hedging. The greatest reduction in hedging risk was achieved for longer hedging horizons.
Keywords
cross hedge; cattle ration; corn futures; fed cattle
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