Publish Date: 11 Jan 2022
Source: CHOICES Magazine
Given the immense effect of weather on agriculture, skillful weather forecasts are important to agricultural producers for effective decision making.
In this article, we investigated the role of adopting the AER analog-based seasonal weather forecast and a simple preharvest hedging decision rule to evaluate farm financial outcomes. Results indicate a general financial benefit for pre-harvest hedging. Furthermore, results indicate that the AER analog-based seasonal weather forecast model and the simple hedging decision rule provided financial benefits for both producers who traditionally sell everything at harvest and for producers who traditionally hedge every season.
For additional AER information contact: Eric Hunt, AER Staff Scientist, email@example.com