Crop Yield and Price Distributional Effects on Revenue Hedging

The use of crop yield futures contracts is examined. The expectation being modeled here reflects that of an Illinois corn and soybeans producer at planting, of revenue realized at harvest. The effects of using price and crop yield contracts are measured by comparing the results of the expected distribution to the expected distribution found under five general alternatives: 1) a revenue hedge using just price futures, 2) a revenue hedge using crop yield futures, 3) an unhedged scenario where revenue is determined by realized prices and yields, 4) an unhedged scenario where revenue is determined by realized prices and yields and by participation in government support programs with deficiency payments, and 5) a no hedge scenario where revenue is determined by realized prices and yields and by participation in a proposed revenue-assurance program. We draw four major conclusions from the results. First, hedging effectiveness using the new crop yield contract depends critically on yield basis risk which presumably can be reduced considerably by covering large geographical areas. Second, crop yield futures can be used in conjunction with price futures to derive risk management benefits significantly higher than using either of the two alone. Third, hedging using price and crop yield futures has a potential to offer benefits larger than those from the simulated revenue assurance program. However, the robustness of the findings depends largely on whether yield basis risk varies significantly across regions. Finally, the qualitative results described by the above three conclusions do not change depending on whether yields are distributed according to the beta or lognormal distribution.published or submitted for publicationnot peer reviewe

Projected 1985 impacts of alternative inland waterway user fees on corn, soybean, and wheat transport

The Inland Waterway Revenue Act of 1978 (Public Law 95-502) established a barge-fuel tax of four cents per gallon that became effective in October of 1980. The tax rate will increase to ten cents per gallon by 1985. The tax revenue is used to recover part of the cost of governmental provision of a navigable river system;This study examines the effects of various taxing methods at rates that are estimated to recover all of the costs of providing an inland waterway system for commercial navigation. Impacts of the alternative waterway user fees on transport modal shares and revenues, relationships between origins and destinations, tax revenue generation, and transport costs of corn, wheat, and soybean haulage in 1985 are projected;A linear programming model that specifies alternative transport mode, crop, origin, destination, and time period combinations is developed. A model solution is that combination which minimizes the total annual cost of transporting and handling grain from U.S. grain-surplus regions to domestic and foreign grain-deficit regions. Six solutions are found under six different user fee scenarios. No user fees exist in one scenario. A fuel tax, ton-mile tax, and a combination of fuel and ton-mile tax are used as three alternative scenarios of user fee imposition. Rail rate increases, in response to a ton-mile tax, are incorporated in the last two scenarios;The solution results indicate that up to 255 million bushels of corn, wheat, and soybeans will be diverted from barge transport to rail and truck after user fees are imposed. Most of this diversion is Iowa- and Minnesota-produced grain. Each crop has around 15 percent of its respective barge traffic diverted when taxes are imposed. Total user fees collected on grain shipments range from 50 million to 61.2 million and, based on the grain that moves by barge after tax imposition, the tax revenues represent a per bushel average that ranges from 2.65 to 3.27 cents

THE USE OF MEAN-VARIANCE FOR COMMODITY FUTURES AND OPTIONS HEDGING DECISIONS

This study provides additional evidence of the usefulness of mean-variance procedures in the presence of options which can truncate and skew the returns distribution. Using a simulation analysis, price hedging decisions are examined for hog producers when options are available. Mean-variance results are contrasted with optimal decisions based on negative exponential and Cox-Rubinstein utility functions over 56 ending price scenarios and two levels of risk aversion. The findings from our simulation, which considers discrete contracts, basis risk, lognormality in prices, transactions costs, and alternative utility specifications, affirm the usefulness of mean-variance framework.Marketing,

CROP YIELD AND PRICE DISTRIBUTIONAL EFFECTS ON REVENUE HEDGING

The use of crop yield futures contracts is examined. The expectation being modeled here reflects that of an Illinois corn and soybeans producer at planting, of revenue realized at harvest. The effects of using price and crop yield contracts are measured by comparing the results of the expected distribution to the expected distribution found under five general alternatives: 1) a revenue hedge using just price futures, 2) a revenue hedge using crop yield futures, 3) an unhedged scenario where revenue is determined by realized prices and yields, 4) an unhedged scenario where revenue is determined by realized prices and yields and by participation in government support programs with deficiency payments, and 5) a no hedge scenario where revenue is determined by realized prices and yields and by participation in a proposed revenue-assurance program. We draw four major conclusions from the results. First, hedging effectiveness using the new crop yield contract depends critically on yield basis risk which presumably can be reduced considerably by covering large geographical areas. Second, crop yield futures can be used in conjunction with price futures to derive risk management benefits significantly higher than using either of the two alone. Third, hedging using price and crop yield futures has a potential to offer benefits larger than those from the simulated revenue assurance program. However, the robustness of the findings depends largely on whether yield basis risk varies significantly across regions. Finally, the qualitative results described by the above three conclusions do not change depending on whether yields are distributed according to the beta or lognormal distribution.Marketing,

AN ANALYSIS OF HOW THE U.S. GOVERNMENT CAN EFFECTIVELY TACKLE SUPPLY CHAIN BARRIERS TO SCALE UP THE LOW COST UNMANNED AERIAL VEHICLE (UAV) SWARMING TECHNOLOGY (LOCUST) PROGRAM

The LOCUST program is a scalable system of inexpensive swarming unmanned aerial vehicles to provide disruptive capability in contested environments against anti-area access denial defenses, enabling manned strike operations and localized landing site superiority with reduced cost, risk, and operator launch and workload. Our research and analysis will emphasize the challenges of moving from a U.S. Special Operations Command (USSOCOM) effort to a large program of record. Specific supply chain concerns that will be addressed include: 1) DOD organizational structure; 2) service-specific objectives and currently operating platforms; 3) requirements generation and related procurements to include production and quality challenges; 4) safety and quality assurance standards; 5) lead times, inventory plans, and throughput to include supplier base considerations and consolidations; and 6) latest evolving technologies and continuous improvement principles. Our team will utilize the Define, Measure, Analyze, Improve, Control (DMAIC) evaluative methodology that focuses on data-driven improvement cycles to better optimize process, design and results. Our results and recommendations highlighted multiple strategies that the Office of Naval Research (ONR) must focus on when developing the LOCUST supply chain. These conclusions and findings address both current supply chain development opportunities for the LOCUST program, as well as where the program must focus its efforts in the future.http://archive.org/details/ananalysisofhowt1094563516Civilian, Department of the NavyCivilian, Department of the ArmyCivilian, Department of the ArmyApproved for public release; distribution is unlimited

An Unsettling Outcome: Why the Florida Supreme Court Was Wrong to Ban All Settlement Evidence in \u3ci\u3eSaleeby v Rocky Elson Construction, Inc.\u3c/i\u3e, 3 So. 3d 1078 (Fla. 2009)

It is rare that a court as sophisticated as the Florida Supreme Court casually makes a fundamental mistake in an important area of the law. Unfortunately, Saleeby v. Rocky Elson Construction, Inc., 3 So. 3d 1078 (Fla. 2009) represents one of these unusual instances. The Court was faced with a simple question: may evidence pertaining to a prior settlement be offered at trial when it is relevant to something other than liability or the invalidity or amount of the pending claim. The universal answer under both federal law and the law of other states is yes, as long as the probative value of the evidence outweighs its prejudicial impact. In Saleeby, the Florida Supreme Court held that the answer is a resounding “no.” The result could be a miscarriage of justice – for instance, in a case in which a witness’s testimony is effectively “purchased” through an overly generous settlement, but the fact-finder will be prevented by the Saleeby holding from finding this out

An Unsettling Outcome: Why the Florida Supreme Court Was Wrong to Ban All Settlement Evidence in \u3ci\u3eSaleeby v Rocky Elson Construction, Inc.\u3c/i\u3e, 3 So. 3d 1078 (Fla. 2009)

It is rare that a court as sophisticated as the Florida Supreme Court casually makes a fundamental mistake in an important area of the law. Unfortunately, Saleeby v. Rocky Elson Construction, Inc., 3 So. 3d 1078 (Fla. 2009) represents one of these unusual instances. The Court was faced with a simple question: may evidence pertaining to a prior settlement be offered at trial when it is relevant to something other than liability or the invalidity or amount of the pending claim. The universal answer under both federal law and the law of other states is yes, as long as the probative value of the evidence outweighs its prejudicial impact. In Saleeby, the Florida Supreme Court held that the answer is a resounding “no.” The result could be a miscarriage of justice – for instance, in a case in which a witness’s testimony is effectively “purchased” through an overly generous settlement, but the fact-finder will be prevented by the Saleeby holding from finding this out

Adolescents\u27 Behavior in the Presence of Interparental Hostility: Developmental and Emotion Regulatory Influences

Within-family covariation between interparental hostility and adolescent behavior across three interactions over a 2-year period was explored in a sample that included 37 typical adolescents and 35 adolescents recently hospitalized for psychiatric difficulties. More interparental hostility across the three interactions was associated with more adolescent hostility and more positive engagement (at a trend level) regardless of psychiatric background. Parent-to-child hostility in each interaction mediated the link for adolescent hostility but not for positive adolescent engagement. Emotion regulation capacities and age were linked to variability in adolescents\u27 behavior in the presence of interparental conflict. In interactions with more interparental hostility, adolescents with greater capacity to tolerate negative affect were more likely to show increased positive engagement, and adolescents who were better able to modulate their emotional expression were less likely to show increased hostility. Covariation between interparental and adolescent hostility across the three family interactions decreased as the adolescent aged. These findings are consistent with the theory that exposure to inter-parental hostility is emotionally disequilibrating, and that adolescent responses may reflect differences in emotion regulation and other developmentally based capacities. Gender and variations across families in overall levels of hostile parenting were also linked with adolescent behavior in the presence of interparental hostility