"Does a bread factory that hedges its future wheat purchases with wheat futures have a lower expectation profit than one which does not?" To the extent that it

"Does a bread factory that hedges its future wheat purchases with wheat futures have a lower expectation profit than one which does not?" To the extent that it hedges them rationally, they have exactly the same expectation profit. But the bread factory that hedges its future wheat purchases has a lower real profit than the one that does not, assuming the price of wheat doesn't go up, because buying those futures contracts costs money. That's what it means to turn risk into money: if you are willing to bear the costs of things turning out poorly, you can avoid the costs of avoiding the chance of things going poorly, and increase your profit by the same amount.