β Scribed by William G. Tomek; Hikaru Hanawa Peterson
No coin nor oath required. For personal study only.
This article surveys and evaluates the current state of knowledge about producers' marketing strategies
to manage price and revenue risk for farm commodities. The review highlights gaps between concepts and their
implementation. Many wellβdeveloped models of price behavior exist, but appropriate characterization and
estimation of the probability distributions of commodity prices remain elusive. Hence, the preferred measure of
price risk is ambiguous. Numerous models of optimal marketing portfolios for farmers have been specified, but
their behavior appears to be inconsistent with most, if not all, of these models. In addition, some research
suggests that farmers can earn speculative profits, which is inconsistent with notions of efficient markets. The
conclusions discuss what academic research can and cannot accomplish in relation to assisting producers with
riskβmanagement decisions. Β© 2001 John Wiley & Sons, Inc. Jrl Fut Mark 21:953β985,
2001
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