The Effect of Hog Futures in Stabilizing Hog Production

China's large-scale hog farmers are playing an increasingly important role in promoting the stable development of the hog industry. Taking large-scale hog enterprises as samples, based on hog sales data from January 2019 to July 2022, this paper adopts a two-way fixed-effects model to test the impact, mechanism, and heterogeneity of hog futures on the production stability of large-scale hog farmers. The study found that hog futures help promote stable production of large-scale farmers. This finding still holds after a series of robustness tests. The mechanism analysis found that, first, hog futures help large-scale farmers expand their risk management factor inputs. Second, hog futures help reduce the impact of hog price risk on production. Finally, hog futures help stabilize farmers' production expectations. The moderating effects analysis found that the stabilizing effect of hog futures will enhance as farmers' share of hog farming operations increases. Heterogeneity analysis found that when hog prices fluctuate negatively, hog futures help promote the stable production of large-scale farmers. When hog prices fluctuate positively, the production stabilization effect of hog futures is not obvious. Therefore, hog enterprises should be encouraged to participate in hog futures hedging transactions to promote stable hog production.