• Selected
• Entire List

Abstract:
The purpose of this article is to evaluate the performance of market advisory services for the 19952003 corn and soybean crops. A new database from the Agricultural Market Advisory Services (AgMAS) Project is used in the evaluation. This database should not be subject to survivorship and hindsight biases. Overall, the results provide little evidence that advisory services as a group outperform market benchmarks, particularly after considering risk. The evidence is more positive versus the farmer benchmarks, even after taking risk into account. Results also suggest that it is difficult to predict the pricing performance of advisory services across crop-years.

Abstract:
The purpose of this report is to provide a preliminary summary of the results of a survey designed to help answer the questions about subscriber use of market advisory services. Importantly, this research is a cooperative partnership between the University of Illinois and the Data Transmission Network. The survey participants are commercial producers of major grain, oilseed and fiber crops, representing important agricultural areas of the US. The survey has three broad objectives, including 1) how US producers perceive the riskiness of various aspects of farming; 2) how US producers manage farm business risk, and 3) how US producers select and use market advisory services.

Abstract:
The purpose of this report is to improve understanding of USDA crop forecasting methods, performance and market impact. A review of USDA's forecasting procedures and methodology confirmed the objectivity and consistency of the forecasting process over time. Month-to-month changes in corn and soybean production forecasts from 1970 through 2005 indicated little difference in magnitude and direction of monthly changes over time. USDA production forecast errors were largest in August and smaller in subsequent forecasts. There appeared to be no trend in the size or direction of forecast errors over time. On average, USDA corn production forecasts were more accurate than private market forecasts over 1970-2005, with the exception of August forecasts since the mid-1980s. The forecasting comparisons for soybeans were somewhat sensitive to the measure of forecast accuracy considered. One measure showed that private market forecasts were more accurate than USDA forecasts for August regardless of the time period considered. Another measure showed just the opposite. As the growing season progresses the difference in the results across the two measures of forecast accuracy diminished, with USDA forecast errors in soybeans about equal to or smaller than private market errors. USDA corn production forecasts had the largest impact on corn futures prices in August and recent price reactions have been somewhat larger than historical reactions. Similar to corn, USDA soybean production forecasts had the largest impact on soybean futures prices in August with recent price reactions appearing somewhat larger than in the past. Overall, the analysis suggests that over the long-run the USDA performs reasonably well in generating crop production forecasts for corn and soybeans.

Corn, Soybeans, forecast, production, USDA

Abstract:
Mail surveys are a very popular instrument for researchers as well as government agencies and commercial firms to obtain information about farmers. A large percentage of farmers do not respond to these mail surveys. To gain insight into why farmers do not respond and their preferences regarding mail surveys, farmers who did not respond to a mail survey were interviewed. From our field study it appears that a large proportion does not even read the questionnaire. Furthermore, the period in which the survey is sent along with the form and amount of compensation, the sender of the questionnaire, and the length of the questionnaire has a crucial impact on the willingness to participate.

Abstract:
The purpose of this research report is to identify the appropriate market benchmark price to use to evaluate the pricing performance of market advisory services that are included in the annual AgMAS pricing performance evaluations. Five desirable properties of market benchmark prices are identified. Three potential specifications of the market benchmark price are considered: the average price received by Illinois farmers, the harvest cash price, and the average cash price over a two-year crop marketing window. The average cash price meets all of the desired properties, except that it would not be easily implementable by producers. It can be shown, though, that the price realized via a more manageable strategy of "spreading" sales during the marketing window very closely approximates the average cash price. Therefore, it is determined that the average cash price meets all five selection criteria, and is the most appropriate market benchmark to be used in evaluating the pricing performance of market advisory services.

Abstract:
The purpose of this report is to improve understanding of USDA crop forecasting methods, performance and market impact. A review of USDA's forecasting procedures and methodology confirmed the objectivity and consistency of the forecasting process over time. No changes in methodology occurred in 2004. Month-to-month changes in corn and soybean production forecasts from 1970 through 2004 indicated little difference in magnitude and direction of monthly changes over time. USDA production forecast errors were largest in August and smaller in subsequent forecasts. There appeared to be no trend in the size or direction of forecast errors over time. On average, USDA corn production forecasts were more accurate than private market forecasts over 1970-2004, with the exception of August forecasts since the mid-1980s. The forecasting comparisons for soybeans were somewhat sensitive to the measure of forecast accuracy considered. One measure showed that private market forecasts were more accurate than USDA forecasts for August regardless of the time period considered. Another measure showed just the opposite. As the growing season progresses the difference in the results across the two measures of forecast accuracy diminished, with USDA forecast errors in soybeans about equal to or smaller than private market errors. USDA corn production forecasts had the largest impact on corn futures prices in August and recent price reactions have been somewhat larger than historical reactions. Similar to corn, USDA soybean production forecasts had the largest impact on soybean futures prices in August with recent price reactions appearing somewhat larger than in the past. Overall, the analysis suggests that over the long-run the USDA performs reasonably well in generating crop production forecasts for corn and soybeans.

Corn, Soybeans, forecast, production, USDA

Abstract:
The purpose of this study was to investigate the relationship between weather, technology, and corn and soybean yields in the U.S. Corn Belt. Corn and soybean yields, monthly temperature, and monthly precipitation observations were collected over 1960 through 2006 for Illinois, Indiana, and Iowa. Multiple regression models were developed based on specifications found in studies by Thompson (1962, 1963, 1969, 1970, 1985, 1986, 1988). Estimated models explained at least 94% and 89% of the variation in corn and soybean yields for each state, respectively. This research provided strong evidence that precipitation, temperature, and a linear time trend to represent technological improvement explained all but a small portion of the variation in corn and soybean yields in the U.S. Corn Belt. An especially important finding was that relatively benign weather for the development of corn since the mid-1990s should not be discounted as an explanation for seemingly high yields. The potential impact of this finding on the agricultural sector is noteworthy. Trend yield forecasts based on perceptions of a rapid increase in technology may eventually lead to poor forecasts. Unfavorable weather in the future may lead to unexpectedly low corn yields that leave producers, market participants, and policy-makers wondering how such low yields could have occurred despite technological improvements.

corn, soybeans, yield, weather, technology, trends

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance in the 1999 crop year for corn and soybeans. Specifically, the average price received by a subscriber to an advisory service is calculated for corn and soybean crops harvested in 1999. The average net advisory price across all 26 corn programs in 1999 is $2.02 per bushel, three cents below the market benchmark price. The range of net advisory prices for corn is substantial, with a minimum of $1.66 per bushel and a maximum of $2.49 per bushel. The average net advisory price across all 25 soybean programs in 1999 is $5.67 per bushel, seventeen cents above the market benchmark. As with corn, the range of net advisory prices for soybeans is substantial, with a minimum of $4.68 per bushel and a maximum of $7.10 per bushel. The average revenue achieved by following both the corn and soybean programs offered by an advisory service is $299 per acre, $2.00 more than market benchmark revenue for 1999. The spread in advisory revenue also is noteworthy, with the difference between the bottom- and top-performing advisory programs reaching more than $100 per acre.

Abstract:
The purpose of this research report is to evaluate the pricing performance of market advisory services for the 1995-2004 corn and soybean crops.

Five basic indicators of performance are applied to advisory program prices and revenues over 1995-2004. Results show that advisory program prices fall in the top-third of the price range relatively infrequently. There is limited evidence that advisory programs as a group outperform market benchmarks, particularly after considering risk. The evidence is somewhat more positive with respect to farmer benchmarks, even after taking risk into account. For example, the average advisory return relative to the farmer benchmarks is $8 to $12 per acre with only a marginal increase in risk. Even though this return is small and mainly from corn, it nonetheless represents a non-trivial increase in net farm income per acre for grain farms in central Illinois. Test results also suggest that it is difficult to predict the year-to-year pricing performance of advisory programs based on past pricing performance. However, there is some evidence that performance is more predictable over longer time horizons, particularly at the extremes of performance rankings.

Prices, corn, soybeans, advisory service, risk, performance

Abstract:
The purpose of this paper is to address two basic performance questions for market advisory services: 1) Do market advisory services, on average, outperform an appropriate market benchmark? and 2) Do market advisory services exhibit persistence in their performance from year-to-year? Data on corn and soybean net price received for advisory services, as reported by the AgMAS Project, are available for the 1995, 1996 and 1997 marketing years. Performance test results suggest that, on average, market advisory services exhibit a small ability to "beat the market" for the 1995 through 1997 corn and soybean crops. This conclusion is somewhat sensitive to the type of performance test and market benchmark considered. The predictability results provide little evidence that future advisory service pricing performance can be predicted from past performance. When services are grouped by performance quantile, some evidence of predictability is found for the poorest performing services, but not for top performing services.

Abstract:
The purpose of this report is to address two basic performance questions for market advisory services in wheat: 1) Do market advisory services, on average, outperform an appropriate market benchmark? and 2) Do market advisory services exhibit persistence in their performance from year-to-year? Data on wheat net price received for advisory services, as reported by the AgMAS Project, are available for the 1995, 1996, 1997 and 1998 crop years. Not only do market advisory programs in wheat consistently fail to "beat the market," their performance is significantly worse than the market. On average, market advisory service performance is about $14 per acre below benchmark revenue, an economically non-trivial amount by any reasonable standard. The predictability results provide little evidence that future advisory service pricing performance can be predicted from past performance.

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance in 1996 for corn and soybeans. Specifically, the average price received by a subscriber to an advisory service is calculated for corn and soybean crops harvested in 1996. The average net advisory price across all 26 corn programs is $2.63 per bushel. The range of net advisory prices for corn is quite large, with a minimum of $2.08 per bushel and a maximum of $3.12 per bushel. The average net advisory price across all 24 soybean programs is $7.27 per bushel. As with corn, the range of net advisory prices for soybeans is substantial, with a minimum of $6.80 per bushel and a maximum of $7.80 per bushel.

Abstract:
The purpose of this paper is to address two basic performance questions for market advisory services: 1) Do market advisory services, on average, outperform an appropriate market benchmark? and 2) Do market advisory services exhibit persistence in their performance from year-to-year? Data on corn and soybean net price received for advisory services, as reported by the AgMAS Project, are available for the 1995, 1996, 1997 and 1998 crop years. Performance test results suggest that, on average, market advisory services exhibit a small ability to "beat the market" for the 1995 through 1998 corn and soybean crops. It is debatable whether the performance of advisory services also is economically significant. The predictability results provide little evidence that future advisory service pricing performance can be predicted from past performance.

Abstract:
The purpose of this research report is to evaluate the pricing performance of market advisory services for the 1995-2003 corn and soybean crops. Market and farmer benchmarks are developed for the performance evaluations. Two market benchmarks are specified in order to test the fragility of performance results to changing benchmark assumptions. The 24-month market benchmark averages market prices for the entire 24-month marketing window. The 20-month market benchmark is computed in a similar fashion, except the first four months of the marketing window are omitted. The farmer benchmark is based upon the USDA average price received series for corn and soybeans in Illinois. The same assumptions applied to advisory program track records are used when computing the market and farmer benchmarks. Four basic indicators of performance are applied to advisory program prices and revenues over 1995-2003. Test results provide little evidence that advisory programs as a group outperform market benchmarks, particularly after considering risk. The evidence is somewhat more positive with respect to the farmer benchmark, even after taking risk into account. For example, the average advisory return relative to the farmer benchmark is $7 per acre with only a negligible increase in risk. While this return is small it nonetheless represents a non-trivial increase in net farm income per acre for grain farms in Illinois. Test results also suggest that it is difficult to usefully predict the year-to-year pricing performance of advisory programs based on past pricing performance. However, there is some evidence that performance is more predictable over longer time horizons, particularly at the extremes of performance rankings.

Prices, corn, soybeans, advisory service, risk, performance

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance in 1998 for corn and soybeans. Specifically, the average price received by a subscriber to an advisory service is calculated for corn and soybean crops harvested in 1998. The average net advisory price across all 23 corn programs is $2.17 per bushel - seven cents below the market benchmark price. The net advisory prices for corn range from a minimum of $1.93 per bushel to a maximum of $2.51 per bushel. The average net advisory price across all 22 soybean programs is $5.82 per bushel - four cents less than the market benchmark. The net advisory prices for soybeans range from a minimum of $5.11 per bushel to a maximum of $6.58 per bushel.

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance in 1997 for corn and soybeans. Specifically, the average price received by a subscriber to an advisory service is calculated for corn and soybean crops harvested in 1997. The average net advisory price across all 23 corn programs is $2.32 per bushel. The net advisory prices for corn range from a minimum of $2.00 per bushel to a maximum of $2.74 per bushel. The average net advisory price across all 21 soybean programs is $6.40 per bushel. The net advisory prices for soybeans range from a minimum of $6.08 per bushel to a maximum of $6.99 per bushel.

Abstract:
This article uses Nordhaus' framework to determine the efficiency of the revision process for USDA corn and soybean production forecasts over the 1970/1971 through 2004/2005 marketing years. Positive autocorrelation and consistency of directional changes in forecast revisions suggest these forecasts are smoothed. Evidence is provided that the loss in forecast accuracy due to smoothing is statistically and economically significant in several cases. A conservative bias in farm operators' assessments of yield potential and in the procedure for translating enumerator's information about plant fruit counts into objective yield estimates are identified as plausible sources of smoothing.

Abstract:
Analysis of a unique data set of 1,400 U.S. crop producers using a mixture-modeling framework shows that the likelihood of Marketing Advisory Services (MAS) use is, among others, driven by the perceived performance of MAS in terms of regarding return and risk reduction, the match between the MAS and the crop producer's marketing philosophy, and the interaction between them. The influence of these factors on crop producers' MAS usage is not homogeneous across crop producers. The heterogeneity is played out in different MAS choices and appears to be driven by crop producers' risk attitudes.

Marketing advisory services, marketing philosophy, mixture model, financial performance, heterogeneity, risk attitudes, crop producers

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance in 1995 for corn and soybeans. Specifically, the average price received by a subscriber to an advisory service is calculated for corn and soybean crops harvested in 1995. The average net advisory price across all 25 corn programs is $3.04 per bushel. The range of net advisory prices for corn is quite large, with a minimum of $2.34 per bushel and a maximum of $3.81 per bushel. The average net advisory price across all 25 soybean programs is $6.61 per bushel. As with corn, the range of net advisory prices for soybeans is substantial, with a minimum of $5.75 per bushel and a maximum of $7.92 per bushel.

Abstract:
This article develops measures of marketing style for advisory programs in corn and soybeans and estimates the relationship between style characteristics and pricing performance. Style is measured by the intensity of futures and options use, degree of activeness in marketing, and seasonality of sales. The data set consists of advisory programs tracked by the AgMAS project at the University of Illinois between 1995 and 2004. Results indicate that active programs making large bets on price movements obtain a higher average price than more conservative programs. This is consistent with active advisors possessing superior information and/or analytical skills rather than being overconfident. However, estimates of the relationship between pricing performance and activeness are sensitive to the inclusion of a single high-performing program.

Abstract:
The purpose of this research report is to present an evaluation of advisory service pricing performance from 1995 through 1998 for wheat. The average net advisory price across all 24 wheat programs in 1995 is $3.79 per bushel, $0.18 above the market benchmark price. The range in 1995 is $3.01 to $4.71 per bushel. The average net advisory service price for 23 wheat programs in 1996 is $3.82 per bushel, $0.13 below the market benchmark. The range in 1996 is $2.74 to $4.94 per bushel. The average net advisory price for all 20 wheat programs in 1997 is $2.64 per bushel, $0.58 below the market benchmark. The range in 1997 is $1.34 to $3.90 per bushel. Finally, the average net advisory price across all 21 services in 1998 is $2.36 per bushel, $0.54 below the market benchmark. The range in 1998 is $1.34 to $3.33 per bushel.

Abstract:
The purpose of this article is to evaluate the performance of market advisory services for the 1995-2003 corn and soybean crops. A new database from the Agricultural Market Advisory Services (AgMAS) Project is used in the evaluation. This database should not be subject to survivorship and hindsight biases. Overall, the results provide little evidence that advisory services as a group outperform market benchmarks, particularly after considering risk. The evidence is more positive versus the farmer benchmarks, even after taking risk into account. Results also suggest that it is difficult to predict the pricing performance of advisory services across crop-years.

Abstract:
USDA World Agricultural Supply and Demand Estimates (WASDE) price forecasts are published as an interval, but are typically analyzed as point estimates. Thus, all information about uncertainty imbedded in the forecast is ignored. The purpose of this article is to evaluate the accuracy of WASDE corn and soybean price forecasts using methodology suitable for testing judgmental interval forecasts. Accuracy tests suggest that WASDE forecasts are not calibrated at the 95% confidence level for both commodities and generally not calibrated for corn, but calibrated for soybeans, at the implied confidence level elicited from the survey of forecast providers.

Abstract:
A large percentage of farmers do not respond to mail surveys. To gain insight into why farmers do not respond and how to improve response rates, a three-step research design was developed. First, an initial survey, based on in-person interviews with 15 farmers, was sent to 100 farmers. Second, farmers who did not respond to this mail survey were contacted by phone to investigate the reasons for not responding. Third, based on the information from these nonrespondents, the survey instrument was revised and sent to 3,990 U.S. farmers. Our studies show that the period in which the survey is sent is a crucial factor in the willingness to participate, along with the form and amount of compensation, the sender of the questionnaire, and the perceived length of the questionnaire.

Abstract:
Poor convergence performance of CBOT corn, soybean, and wheat futures contracts since late 2005 has been a major source of concern to market participants, regulators, and elected representatives at the state and national levels. After careful review of available evidence, it appears that recent storage rate changes for CBOT corn and soybean contracts were sufficient to address convergence problems is these two markets. The corn and soybean delivery system is functionally sound at the present time because it is located within substantial commercial flows of the commodities. Nonetheless, convergence performance for these two markets should continue to be closely monitored, particularly in light of the downward trend in corn and soybean shipments on the Illinois River. Recent and upcoming storage rate changes for CBOT wheat contracts are also expected to help improve performance of this contract. However, a major change in delivery terms is needed in order to address the underlying structural problems in the CBOT wheat contract. The underlying issue is that historic delivery locations are no longer in the main commercial flow of wheat. Recently approved additions to the delivery locations for wheat are unlikely to address the structural problem because new locations are viewed as “safety-valve” areas that will be used for delivery only when market conditions are unusual.

corn, soybeans, wheat, CBOT, delivery, convergence

Abstract:
No abstract available.

Abstract:
No abstract available.

Abstract:
This study investigates empirical methods of generating prediction intervals for WASDE forecasts of corn, soybean, and wheat prices over the 1980/81 through 2006/07 marketing years. Empirical methods use historical forecast errors to estimate forecast error distributions, which are then used to predict confidence limits of forecasts. Five procedures were used to estimate empirical confidence limits, including histograms, kernel density estimation, logistic distribution, quantile regression, and quantile regression with stocks-to-use ratios. The procedures were compared based on out-of-sample performance, where the first 15 observations (1980/81-1994/95) were used to generate confidence limits for the 16th year (1995/96); the first 16 observations were used to generate confidence limits for the 17th year (1996/97) and so on. Based on the results of accuracy tests for empirical confidence intervals over 1995/96 through 2006/07, all five empirical procedures included in this study generated confidence intervals that were not significantly different from the target confidence levels (80% pre-harvest and 90% post harvest). When monthly hit rates were averaged pre- and post-harvest across all three commodities, the kernel density-based method appears most accurate prior to harvest with an average hit rate of 82%, followed by the logistic distribution (76%), quantile regression-based methods (71-72%), and histogram (71%). After harvest, the kernel density-based method and the quantile regression-based method were the most accurate with average hit rates of 95%, followed by the logistic distribution based methods (92%), the histogram-based methods (89%), and the quantile regression methods with stocks/use ratio (88%). Overall, this study demonstrates that empirical approaches may be used to construct more accurate confidence intervals for WASDE corn, soybean, and wheat price forecasts.

forecast, USDA, commodity, confidence interval, empirical

Abstract:
A conceptual framework was developed that provides insight into the factors affecting the impact of these recommendations on producer pricing decisions. Data from 656 U.S. producers reveal that the perceived performance of the Market Advisory Services (MAS), the way in which MAS recommendations are delivered, as well as the match between MAS and producer's marketing philosophy are important factors explaining the impact of MAS recommendations. Risk attitude does not affect the impact of MAS recommendations on producers' decisions, indicating that producers are more interested in the price-enhancing characteristics of MAS advice than in its risk-reducing features.

Market advisory services, ordered probit model, producers' marketing decisions