n The Dairy Mail - Understanding the maize maze - : management

Volume 21, Issue 9
  • ISSN : 1561-4301


Many farmers believe they can only use Safex to sell their crop and hedge or fix the price they will sell at after they have planted. However, there are basic instruments on Safex yellow maize buyers can use to hedge themselves against adverse price movements. A recent study created a theoretical dairy farm that procures 100 t of maize every three months. Routine, easy-to-understand hedging strategies were applied to this scenario to test the efficiency of hedging. These strategies were repeated for 12 years annually in exactly the same way, to determine whether there were any financial benefits for using routine procurements strategies. It has to be noted that the research only focused on whether the strategies were efficient compared to when buying on the spot market.

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