An Analysis of Hedging Strategies for Arizona Cotton Producers

Abstract

This study compared selected hedging strategies for Arizona upland cotton producers including a no- hedge, a planting hedge, and several technical hedging strategies for the time period 1974-82. Technical hedging strategies relied upon forecasting methods to signal the placing and lifting of hedges. Forecasting methods employed included moving averages, exponential smoothing and linear regression analysis. Hedging strategies were plotted in regions of preference relative to no-hedge and planting hedge strategies.