Price risk perceptions and management strategies in selected European food supply chains: An exploratory approach

Agricultural prices in European food markets have become more volatile over the past decade exposing agribusinesses to risk and uncertainty. This study goes beyond the farm stage and explores through interviews the price risk perceptions and management strategies in multiple stages of the food supply chain. Respondents were farmers, wholesalers, processors, and retailers in six European food supply chains. Results show that price risk management strategies in EU food chains are diverse and well beyond traditional instruments such as futures and forward contracts. We further find that deviations of prices by more than 10-15% from expected levels were perceived as price volatility by a majority of the chain actors. This study provides new insights on price risk management, a deeper understanding of price risk perceptions and highlights the interrelation of price risk management decisions with other business decisions. (C) 2016 Royal Netherlands Society for Agricultural Sciences. Published by Elsevier B.V. All rights reserved.