The simulation in this section models the individually tailored forward contract that allow farmer to fix the selling price (with no basis risk) in advance at lower price than the expected price. The simulation result shows that in Australia and in the UK the farmer does not use a forward contract strategy unless its cost is approximately less than 2.5% of the expected price. While the representative farm in Australia almost fully hedges price risk at zero transaction cost of the forward contract, the representative farm in the UK hedges the price at less than 60% of his production even when the transaction cost of the forward contract is zero. The marginal impact of the use of price hedging on farm welfare is larger in the UK than in Australia (first graph in the figure).