Data/hora: 12/06/2024 08:44:43

Provedor de dados: 	Research in Agricultural & Applied Economics (AgEcon Searh)	
País: 	United States	
Título: 	A Comparative Evaluation of Cash Flow and Batch Profit Hedging Effectiveness in Commodity Processing	
Autores: 	Dahlgran,   Roger A.	
Data: 	2006-07-27	
Ano: 	2006	
Palavras-chave: 	Agribusiness; Marketing.	
Resumo: 	Agribusinesses make long-term plant-investment decisions based on discounted cash flow.  It is therefore incongruous for an agribusiness firm to use cash flow as a plant-investment criterion and then to completely discard cash flow in favor of batch profits as an operating objective.  This paper assumes that cash flow and its stability are important to commodity processors and examines methods for hedging cash flows under continuous processing.  Its objectives are (a) to determine how standard hedging models should be modified to hedge cash flows, (b) to outline the differences between cash flow hedging and profit hedging, and (c) to determine the effectiveness of hedging in reducing cash flow variability.  A cash flow hedging methodology is developed.  This methodology is similar to that used for batch profit hedging.  This methodology balances the daily cash flow destabilizing effect of futures positions against the periodic cash flow destabilizing effect of cash price changes.  The resulting cash flow hedges are simulated for soybean processors.  These hedges are less effective than batch profit hedging.  The reduction in cash flow variance achieved through hedging, though small, is nonetheless statistically significant.	
Tipo: 	Conference Paper or Presentation	
Idioma: 	Inglês	
Identificador: 	23124

http://purl.umn.edu/19007	
Editor: 	AgEcon Search	
Relação: 	NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management&gt;2006 Conference, April 17-18, 2006, St. Louis, MO

2006 Conference, St. Louis, MO, April 17-18, 2006	
Formato: 	24

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