DB Feed Enterprise Risk Assessment And Hedging Study

There are many risks such as procurement, marketing, finance and policy risks consisted in feed businesses. Procurement risks, which are considered as the most important in feed businesses, have being influenced by the risks of prices, stocks, qualities and contracts. As the main raw material of feed, there are also corresponding risks in soybean meal procurement. In terms of dispersible of risks, the price risks of soybean belongs to diversifiable risks. So it is helpful for people to decrease the prices risks of soybean meal of feed industry with the help of future hedging.In this thesis, we proceeded from the influence of businesses operations by soybean meal procurement of DB feed enterprise. So the first assignment is to evaluating the price risks of soybean meal of feed enterprise. Then we introduced development of the soybean meal market and its pricing mechanism. After that, positive analysis of price discovery and future hedge ratio of soybean meal futures was done with the use of the mathematical methods. And then we gave some suggests to the enterprise of operating hedging based on our study results. The theoretical support could be given to the DB feed companies in managing price risks of soybean meal with the help of our study results of soybean meal price risks and hedging of DB feed enterprise.