What type of hedge should Jim consider if he is concerned with rising lumber prices?

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If Jim is concerned about rising lumber prices, the most suitable strategy would be to employ a long hedge by buying lumber futures contracts. A long hedge is designed to protect against the risk of price increases. When Jim purchases futures contracts, he locks in the current price of lumber, which protects him from the potential higher prices that may arise in the future. This strategy is beneficial for individuals or businesses that need to buy the commodity in question, as it assures them that they can acquire it at a predetermined price, regardless of fluctuations in the market.

In contrast, selling futures contracts, as suggested in other options, would be more appropriate if Jim were anticipating falling prices, as it would allow him to profit from a decline in the market price. Therefore, for someone looking to shield themselves from increasing costs, a long hedge through buying futures is the ideal approach.