An Analysis Of The Fluctuation Of The Feed Enterprise Raw Material Price And Hedging Strategy Election

With the market economy becoming more and more market-oriented,the production and operation of enterprises are affected by a variety of external factors,which are generally transmitted through fluctuations in market prices.In recent years,the global commodity market has experienced fierce fluctuations.Many companies have experienced business crisis due to price risks.The "price discovery,risk aversion" function of the futures market provides enterprises with risk management sites and risk management tools.The continuous production of enterprise products and the continuous accumulation of wealth not only rely on hard means such as technology and services,but also require the use of advanced financial derivatives to protect the wealth of the enterprise.The use of futures derivatives will contribute to the efficient and smooth operation of our economy.Healthy and orderly development.China's feed industry has entered a stage of adjustment from a high-speed development stage.The slowdown in output growth and the acceleration of concentration have become the new normal.Due to the low added value of the feed industry and the simple production process,raw material procurement,inventory management and product sales have become the key to business operations.At present,the number of closures of small and medium-sized feed enterprises has ceased to increase,large-scale feed companies have continued to expand,and companies have gradually entered the era of micro-profits.With the intensification of competition in the industry,it is imperative that we must be able to win the enemy's victory and rational use of futures derivatives is an advantageous weapon for feed companies.This paper focuses on the price risk management of feed enterprises.It first introduces the development characteristics of the feed industry and points out the typical problems in the development of the industry: the intensified industry competition and the inflexibility of the traditional profit model;the industry is in a dilemma in the position of the industrial chain,and the company operates exist huge risks;there are many factors affecting raw material prices,and price risk control becomes a focus.This emphasizes the necessity and importance of the use of futures hedging tools to manage risk in feed companies.Secondly,this pepper introduced the case of A feed company using hedging to successfully avoid risks of fluctuation of raw material prices three times,and this pepper stated some specific issues in the hedging process,such as the determination of the hedging contract and contract term,and the judgment of market entry,were described in detail.Based on the analysis of three hedging operations,then compared the advantages and disadvantages of the three strategies.Finally,on the basis of summarizing the experience of hedging in A feed company,the paper puts forward suggestions to improve the price fluctuation of raw materials for feed enterprises,which are intended for similar feed enterprises provide hedging reference and experience,so that feed companies can enjoy the convenience and benefits of participating in the futures market better.