The optimisation of production plans is an important topic in agriculture, often related to diversification and specialisation as the classical instruments of coping with production risk. Although the measurement of embedded risk is often inaccurate, it is nevertheless necessary for decision...

A theoretical optimal hedging model is developed to determine potential demand from Australian farmers for a hedging tool to remove the economic consequences of climate related variability in wheat yield. In the past, financial instruments have been developed to hedge price risk on capital...

Recent and presumable future developments tend to increase the risks associated with farming activities. These include climate risks which have always played an important role in farming. Weather based instruments can be valuable tools to reduce the risk associate with unfavourable climatic...

Basis risk has been cited as a primary concern for implementing weather hedges. This study investigates several dimensions of weather basis risk for the U.S. corn market at various levels of aggregation. The results suggest that while the degree of geographic basis risk may be significant in...

Climate change with increasing climate variability is likely to alter risks in agricultural production. The effectiveness of using weather derivatives to hedge against drought risks for rain-fed grain maize production was investigated for current (1981-2003) and future (2070- 2100) climates in...

Global and hemispheric climate indicators have proved useful in many countries for characterising intra- and inter-annual variability in climate processes, agricultural output and biomass production. They also form the basis of successful seasonal climate and production prediction systems for...

The paper explores the feasibility of the use of weather index based derivatives for farms' risk management in an Italian province. Based on a combination of detailed local weather data and of data on farms' yields, various possible weather indexes are found that are highly correlated with...

Firm panel data sets over the period 1993 to 2002 are used to estimate translog production functions with labour, capital and material inputs for 9 Spanish food industries. To tackle the endogeneity of the regressors, the generalized method of moments estimations is employed. The specification...