The Pricing Performance of Market Advisory Services in Wheat Over 1995-2004

Ryan M. Batts, Scott Irwin and Darrel Good

No 183426, AgMAS Project Research Reports from University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics

Abstract: The purpose of this research report is to evaluate the pricing performance of market advisory services for the 1995-2004 wheat crops. Explicit marketing assumptions are applied to the track records in order to produce consistent and comparable results across the different advisory programs. Each of the assumptions are made in order to reflect “real-world” marketing conditions encountered by a representative southwestern Illinois soft red winter wheat producer or a southwest Kansas hard red winter wheat producer. Several key assumptions are: i) with few exceptions, the marketing window for a crop year runs from June 1st before harvest through May 31st following harvest, ii) commercial physical storage costs, as well as interest opportunity costs, are charged to post-harvest sales, iii) brokerage costs are subtracted for futures and options transactions, and iv) Commodity Credit Corporation (CCC) marketing loan recommendations made by advisory programs are followed where possible. Following these and other assumptions, the net price received by a subscriber to a market advisory program is calculated for the 1995-2004 wheat crops. Market and farmer benchmarks are developed for the performance evaluations. The results from this study are similar to those obtained by the AgMAS Project in the analysis of market advisory service performance in corn and soybeans.

Keywords: Agribusiness; Agricultural Finance; Crop Production/Industries; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 211
Date: 2009-12
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uiucrr:183426

DOI: 10.22004/ag.econ.183426

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