The white shrimp futures market: Lessons in contract design and marketing

Dwight R. Sanders, Mark Manfredo

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


The successful introduction of futures contracts to industries unfamiliar with futures markets is likely to become increasingly important as futures exchanges move to alternative governance structures (e.g., for-profit corporations), trading platforms evolve (i.e., electronic/Internet trading), and regulatory requirements relax. Here, we examine the performance of the Minneapolis Grain Exchange’s white shrimp futures contract, one of the first futures contracts aimed at the aquaculture industry. Although the market structure largely conforms to the traditional criteria for a successful futures market, the contract’s performance is disappointing in terms of liquidity, basis behavior, and ultimately, hedging effectiveness. Furthermore, nonpar-size delivery options embedded in the contract design likely impact basis behavior for certain hedges. While these reasons contributed to the ultimate demise of the contract, a general lack of knowledge regarding futures markets among the shrimp industry was also a factor. Given these findings, pragmatic implications for the introduction and marketing of new futures contracts into new industries are discussed. [JEL/EconLit: Q130, Q140, G130]

Original languageEnglish (US)
Pages (from-to)505-522
Number of pages18
Issue number4
StatePublished - Sep 2002

ASJC Scopus subject areas

  • Food Science
  • Geography, Planning and Development
  • Animal Science and Zoology
  • Agronomy and Crop Science
  • Economics and Econometrics


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