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Location Basis Variability Effects on Slaughter Cattle Hedging in the South and Southern Plains*

Published online by Cambridge University Press:  28 April 2015

Barry W. Bobst
Barry W. Bobst*
Affiliation:
University of Kentucky
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Extract

Location basis variability is a matter of potential concern to livestock producers who contemplate the use of livestock futures contracts as hedging devices and who are removed from a designated futures contract delivery point. Recent attention has been given this problem by Heifner in an analysis of minimum-risk hedging ratios for cattle and hogs, among other commodities, in which measures of risk-shifting effectiveness were generated for comparison among locations.

Information

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 5 , Issue 2 , December 1973 , pp. 73 - 77
Copyright
Copyright © Southern Agricultural Economics Association 1973

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Footnotes

*

Kentucky Agricultural Experiment Station Article No. 73-1-74

References

[1]Bobst, Barry W., “Effects of Location Basis Variability on Hedging of Slaughter Hogs in the South,” Southern Journal of Agricultural Economics, Vol. 5, No. 1. July 1973, pp. 193–198.Google Scholar
[2]Crow, Richard J., Riley, John B., and Purcell, Wayne D., “Economic Implications of Nonpar Delivery Points for the Live Cattle Futures Contracts,” American Journal of Agricultural Economics, 54: 111–115, Feb. 1972.CrossRefGoogle Scholar
[3]Heifner, Richard G., Hedging Potential in Grain Storage and Livestock Feeding, Agricultural Economic Report No. 238, Jan. 1973.Google Scholar
[4]Markowitz, Harry M., Portfolio Selection, Yale University Press, Cowles Foundation Monograph 16, 1959.Google Scholar
[5]National Research Council, Nutrient Requirements of Domestic Animals: Number 4, Nutrient Requirements of Beef Cattle, 4th Rev. Ed., Washington, National Academy of Sciences, 1970.Google Scholar