German hog production only responds in a very limited way to price fluctuations in the pork market. The hog production concentrates on a few regions though it is not bound to special natural conditions such as soil quality. Furthermore, the volume of production does not vary over time....

It is frequently stated that price risk in European agriculture in-creases due to the liberalization of formerly regulated markets. This argument is used to motivate the necessity of risk manage-ment and income stabilization for farms. Against this background we empirically investigate the price...

Purpose – The purpose of this paper is to assess the losses of weather-related insurance at different regional levels. The possibility of spatial diversification of insurance is explored by estimating the joint occurrence on unfavorable weather conditions in different locations, looking...

German hog production responds only very limited to price fluctuations in the pork market. The hog production concentrates in a few regions though it does not depend on special natural conditions. Furthermore, the production volume does hardly vary over time. Relatively high market risks, sunk...

Purpose – The purpose of this paper is to review some challenges of insuring weather risk in agriculture and to discuss potential remedies for these problems. Design/methodology/approach – The paper is developed as a narrative on weather insurance based largely on existing literature....

Purpose – The authors' paper aims to deal with the question whether speculative bubbles are present in agricultural commodity prices. Design/methodology/approach – The authors apply a regime switching regression model to test the hypothesis that agricultural prices contain periodically...

This study examines rainfall variability and its implications for wheat production risk in northeast Germany. The hedging effectiveness of rainfall options and the role of geographical basis risk are analyzed using a daily precipitation model. Simpler pricing methods such as the burn analysis...

Since the mid‐1990s, agricultural economists have discussed the relevance of index‐based insurances, also called “weather derivatives”, as hedging instruments for volumetric risks in agriculture. Motivated by the question of how weather derivatives should be priced for agricultural...

This study examines problems that may occur when conventional Value‐at‐Risk (VaR) estimators are used to quantify market risks in an agricultural context. For example, standard VaR methods, such as the variance‐covariance method or historical simulation, can fail when the return...