摘要：The use of crop yield futures contracts is examined. The expectation being modeled herereflects that of an Illinois corn and soybeans producer at planting, of revenue realized at harvest. The effects of using price and crop yield contracts are measured by comparing the results of theexpected distribution to the expected distribution found under five general alternatives: 1) arevenue hedge using just price futures, 2) a revenue hedge using crop yield futures, 3) anunhedged scenario where revenue is determined by realized prices and yields, 4) an unhedgedscenario where revenue is determined by realized prices and yields and by participation ingovernment support programs with deficiency payments, and 5) a no hedge scenario whererevenue is determined by realized prices and yields and by participation in a proposed revenue-assurance program. We draw four major conclusions from the results. First, hedging effectiveness using thenew crop yield contract depends critically on yield basis risk which presumably can be reducedconsiderably by covering large geographical areas. Second, crop yield futures can be used inconjunction with price futures to derive risk management benefits significantly higher than usingeither of the two alone. Third, hedging using price and crop yield futures has a potential to offer benefits largerthan those from the simulated revenue assurance program. However, the robustness of thefindings depends largely on whether yield basis risk varies significantly across regions. Finally,the qualitative results described by the above three conclusions do not change depending onwhether yields are distributed according to the beta or lognormal distribution.
