Hedging Strategies under Market and Weather Uncertainties for Ontario Crops

dc.contributor.advisorHailu, Getu
dc.contributor.authorJang, Inseok
dc.date.accessioned2023-05-18T13:36:04Z
dc.date.available2023-05-18T13:36:04Z
dc.date.copyright2023-05-04
dc.date.created2023-05-04
dc.degree.departmentDepartment of Food, Agricultural and Resource Economicsen_US
dc.degree.grantorUniversity of Guelphen
dc.degree.nameMaster of Scienceen_US
dc.degree.programmeFood, Agriculture and Resource Economicsen_US
dc.description.abstractFarmers make numerous decisions about what to produce, what production techniques to use, how many to plant, and when and where to buy inputs and sell outputs. Meanwhile, farmers face market and weather risks that can impact their net income. In this study, I examine the use of derivative markets as a tool for managing price and weather risks. First, I use the Mean-Variance theoretical model to examine the relationship between yield variability, price expectation, yield expectation and optimal hedge ratio. Second, I estimate optimal hedge ratio for corn, soybeans, and wheat using Ordinary Least Square, Error Correction Model, and the Generalized Autoregressive Conditional Heteroscedasticity. Results reveal that optimal hedge ratios are low for each crop, yield variability and price expectation are inversely related to optimal hedge ratios, and crop yield expectation is positively related to optimal hedge ratios. These findings have important implication for risk management, policy, and welfare.en_US
dc.identifier.urihttps://hdl.handle.net/10214/27622
dc.language.isoenen_US
dc.publisherUniversity of Guelphen
dc.rights.licenseAll items in the Atrium are protected by copyright with all rights reserved unless otherwise indicated.
dc.subjectHedge ratioen_US
dc.subjectFuturesen_US
dc.subjectWeatheren_US
dc.subjectRisk managementen_US
dc.subjectOntario cropsen_US
dc.titleHedging Strategies under Market and Weather Uncertainties for Ontario Cropsen_US
dc.typeThesisen

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