We develop a portfolio choice model for farmers faced with both price and production uncertainty who can hedge this uncertainty using both options and futures contracts. We then simulate the decision process of a typical Iowa farmer and derive his or her optimal options and futures position.
Sakong, Yong; Hayes, Dermot J.; and Hallam, Arne, "Can Options Be Used as a Hedging Instrument?" (1992). CARD Working Papers. 113.