Hedging and crop insurance

Hedging Price Risk in the Presence of Crop Yield and Revenue Insurance

The demand for hedging against price uncertainty in the presence of crop yield and revenue insurance contracts is examined for French wheat farms. The rationale for the use of options in addition to futures is first highlighted through the characterization of the first-best hedging strategy in the expected utility framework. It is then illustrated using numerical simulations. The presence of op...

Hedging Price Risk in the Presence of Crop Yield and Revenue Insurance by

The demand for hedging against price uncertainty in the presence of crop yield and revenue insurance contracts is examined for French wheat farms. The rationale for the use of options in addition to futures is first highlighted through the characterization of the first-best hedging strategy in the expected utility framework. It is then illustrated using numerical simulations. The presence of op...

Crop Insurance and Disaster Assistance

Reform (FAIR) Act implemented farm program contract payments that do not increase as agricultural prices fall, shifting farm policy toward a greater emphasis on risk management and, in particular, on crop insurance. This shift has resulted in the introduction of new types of insurance policies; especially those that provide both yield and price protection. Several new and innovative crop polici...

2007 Crop Insurance Summary

All agricultural producers face recurring risks, significant among them being production risk. Many factors contribute to production risk, including adverse weather conditions such as drought or floods, fires, insects or pests, and disease. These events can devastate a crop, significantly reducing yield and farmer revenue. Since the only way to completely avoid all production risks is to stop p...

Hedging Effectiveness around USDA Crop Reports