Agricultural Supply Chains and the Management of Price Risk

Price is the key linkage between buyers and sellers in a commodity supply chain, so that managing price risk is vital for the producers' survival. In this book the author shows that managing price risk for agricultural products is feasible and that price risk management strategies are therefore possible. The focus is on tactical considerations such as why, when, how and where, when considering managing price risk in agricultural supply chains.

The book also assesses other supply chain risks including the interchange of risk, rather than merely demonstrating hedging strategies. All agricultural products that are commodity-driven, including food, fibre, and energy-destined products, are covered. The emphasis is on storable commodities, but there is also one chapter on the problems associated with managing price risk for perishable products such as meat and dairy. The supply chain risks examined, but which are integrative with price risk for agricultural commodities include: currency, basis, production, supply, quality, delivery, freight, product specification, supplier, customer, organizational, financial, supply chain, contract default, settlement, margin, transactional, goodwill, and relationship-alliance risk.