A Case Study of a Market Advisory Service's Performance in Marketing Hard Red Winter Wheat in Kansas

Tod Kalous, Kevin Dhuyvetter () and Terry Kastens

Journal of the ASFMRA, 2005, vol. 2005, 10

Abstract: Crop marketing, and specifically the efficiency of markets, is a topic of much interest and debate in the agricultural industry. This case study examines the effectiveness of a marketing advisory service (MAS) in pricing hard red winter wheat in Kansas. The post-harvest recommendations of this particular MAS followed by a wheat producer in northwest Kansas over a 32- year time period were analyzed. Results indicate that the net price received following the MAS's recommendations were statistically no better than simply selling at harvest given commercial storage costs and bank interest rates. With lower storage costs, the MAS did receive a premium of 13¢ per bushel compared to harvest sales. A cash marketer storing and selling grain at the same time as the MAS marketer, but without forward contracting, would have been 10¢ per bushel worse off than the MAS marketer. This MAS gain was due to its ability to secure a stronger basis level and pick up short term price movement gains. However, these strengths of the MAS were offset by its fees and by the fact that they tended to store wheat too long.

Keywords: Agribusiness; Crop Production/Industries; Marketing (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/190712/files/229.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:jasfmr:190712

DOI: 10.22004/ag.econ.190712

Access Statistics for this article

More articles in Journal of the ASFMRA from American Society of Farm Managers and Rural Appraisers Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().