1997 PRICING PERFORMANCE OF MARKET ADVISORY SERVICES FOR CORN AND SOYBEANS

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.evaluation of advisory services, pricing performance, soybeans, C8, D4, D8, L1, M3, Q0, Z0, Marketing,

1995 PRICING PERFORMANCE OF MARKET ADVISORY SERVICES FOR CORN AND SOYBEANS

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.Agricultural Market Advisory Service (AgMAS) Project, D4, D7, D8, G1, G2, H4, H8, Q1, Z1, Marketing,

DEVELOPMENT OF A MARKET BENCHMARK PRICE FOR AGMAS PERFORMANCE EVALUATIONS

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.advisory services, evaluating the pricing performance, market benchmark price, C8, C0, D4, D8, L1, M3, Q0, Z0, Marketing,

1996 PRICING PERFORMANCE OF MARKET ADVISORY SERVICES FOR CORN AND SOYBEANS

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.Agricultural Market Advisory Services, G1, D8, D7, D4, G2, H4, H8, Q1, Z1, Marketing,

DO AGRICULTURAL MARKET ADVISORY SERVICES BEAT THE MARKET? EVIDENCE FROM THE CORN AND SOYBEAN MARKETS OVER 1995-1997

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.Marketing,

THE PRIVATE SECTOR APPROACH TO GRAIN MARKETING: THE CASE OF AGRICULTURAL MARKET ADVISORY SERVICES

The purpose of this paper is to investigate the pricing performance and behavior of market advisory services in corn and soybeans. 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". 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. Marketing profiles identify three marketing "styles": i) "scale-up" sales, ii) selective hedging and iii) "speculative" hedging. Advisory services tend to follow the same approach across crop years.Agribusiness,

Vacuum of Fact or Vacuous Theory: A Reply to Professor Kripke

In 1979, Thomas Jackson and Anthony Kronman asked the related questions why debtors offered security in personal property and whether a security interest would increase the welfare of a debtor and all of its creditors, taken as a group. These questions inspired a vigorous debate. The participants have taken as their starting point the Modigliani & Miller irrelevance proposition that if capital markets are perfect, information is perfect, all actors have homogeneous expectations, bankruptcy costs are zero, and no taxes exist, a firm cannot increase its value by altering its capital structure. A change in the mix of a firm\u27s debt, from unsecured debt to secured, is an alteration in its capital structure. Since such a change cannot increase the firm\u27s value and since it is costly for firms to offer security, the irrelevance proposition predicts that no secured debt will be issued. Because secured debt is common, participants in the security interest debate therefore proceed in two ways: they relax the strong assumptions that Modigliani & Miller made to see whether the new models thereby obtained predict security, or they add additional factors-moral hazard, risk aversion, and the like-to see whether models so derived can explain the observed data. All but one of the debaters claim to have found at least a tentative explanation for the existence of secured debt. Although the details of these explanations differ, they have a common theme: security- the debaters claim, exists and is justified because it is efficient; that is, a debtor can compensate those of its creditors whose position is worsened by security while remaining better off than had it not granted a security interest. Alan Schwartz, on the other hand, argues that no good explanations for the presence of security exist. Thus, he believes, claims of its efficiency are premature

DO AGRICULTURAL MARKET ADVISORY SERVICES BEAT THE MARKET? EVIDENCE FROM THE CORN AND SOYBEAN MARKETS OVER 1995-1998

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.Marketing,