Futures contracts for milk: how will they work?

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dc.contributor.author Cropp, Bob
dc.date.accessioned 2011-05-05T21:55:50Z
dc.date.available 2011-05-05T21:55:50Z
dc.date.issued 2011-05-05
dc.identifier.uri http://hdl.handle.net/2097/8739
dc.description.abstract The two new milk futures contracts offer dairy farmers and other buyers and sellers of milk and dairy products additional opportunities to manage price risk in an increasingly volatile milk price environment. The availability of these risk management tools is especially important given the market-oriented direction of federal dairy policy. The CSCE and CME contracts differ somewhat in their specifications. Potential hedgers will need to evaluate which offers the best opportunity to lock in prices. Hedgers also should look at the cheese and nonfat dry milk contracts in determining the most appropriate risk management strategy. Strategies may involve using more than one futures market. Key in any hedging decision is the basis, especially the predictability of the relationship between cash and futures prices. Hedgers should compare the alternative contracts in terms of which yields the most predictable basis given the type of hedge and the specific market conditions affecting their business. en_US
dc.publisher Kansas Agricultural Experiment Station en_US
dc.relation.isPartOf Dairy Day, 1996 en_US
dc.relation.isPartOf Kansas Agricultural Experiment Station contribution; no. 97-115-S en_US
dc.relation.isPartOf Report of progress (Kansas Agricultural Experiment Station and Cooperative Extension Service); 771 en_US
dc.subject Milk futures en_US
dc.subject Hedging en_US
dc.title Futures contracts for milk: how will they work? en_US
dc.type Conference paper en_US
dc.date.published 1996 en_US
dc.citation.epage 12 en_US
dc.citation.spage 6 en_US
dc.description.conference Dairy Day, 1996, Kansas State University, Manhattan, KS, 1996

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