It's claimed that derivative instruments were made to allow real businesses to hedge their risks (unpredictable increase of supplies price, decrease price of the product in the future and so on, foreign exchange risks). It's a great idea, but almost everything I see in the area of derivatives right now is about trading in terms of speculation. I do know that big corporations do such risk management making deals with big banks, but what about medium sized business? Is it an often practice?
Let's imagine that I'm a farmer and I want to hedge risk of pork price decrease in a half of year. What options do I have?