Type of Document	Special Report
Author	Andino, Alexandra Elizabeth
URN	etd-12222004-124007
Title	Price Risk Management Strategies for Virginia Dairy Producers
Degree	Master of Science
Department	Agricultural and Applied Economics
Advisory Committee	Advisor Name Title Purcell, Wayne D. Committee Chair Groover, Gordon E. Committee Member Reaves, Dixie Watts Committee Member
Keywords	Basis Milk Dairy producers Risk Management Strategies Target Price Moving Averages
Date of Defense	2004-12-15
Availability	unrestricted
Abstract The 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.
Files	Filename       Size       Approximate Download Time (Hours:Minutes:Seconds)     28.8 Modem   56K Modem   ISDN (64 Kb)   ISDN (128 Kb)   Higher-speed Access    ETD_Alexandra_Andino_Final.pdf 672.29 Kb 00:03:06 00:01:36 00:01:24 00:00:42 00:00:03

If you have questions or technical problems, please Contact DLA.