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Buying Hedge with Futures

Mark Welch, David Anderson and, Terry Kastens (January, 2009)

Summary

Many bulk purchasers of agricultural commodities require price risk management tools to help stabilize input prices. Livestock feeders anticipating future feed needs or stocker operators looking ahead to wheat pasture grazing benefit from input price management strategies. This publications relates that many producers concerned with price fluctuations for agricultural inputs use a buying hedge with futures to manage price risk.