IDEAS home Printed from https://ideas.repec.org/p/ags/uiucrr/183426.html
   My bibliography  Save this paper

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

Author

Listed:
  • Batts, Ryan M.
  • Irwin, Scott
  • Good, Darrel

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.

Suggested Citation

  • Batts, Ryan M. & Irwin, Scott & Good, Darrel, 2009. "The Pricing Performance of Market Advisory Services in Wheat Over 1995-2004," AgMAS Project Research Reports 183426, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    • Handle: RePEc:ags:uiucrr:183426
    DOI: 10.22004/ag.econ.183426
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/183426/files/Agmas0901.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.183426?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Summers, Lawrence H, 1986. "Does the Stock Market Rationally Reflect Fundamental Values?," Journal of Finance, American Finance Association, vol. 41(3), pages 591-601, July.
    2. Good, Darrel L. & Irwin, Scott H. & Jackson, Thomas E. & Jirik, Mark A. & Martines-Filho, Joao Gomes, 2000. "1998 Pricing Performance Of Market Advisory Services For Corn And Soybeans," AgMAS Project Research Reports 14793, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    3. Brown, Stephen J & Goetzmann, William N & Ibbotson, Roger G, 1999. "Offshore Hedge Funds: Survival and Performance, 1989-95," The Journal of Business, University of Chicago Press, vol. 72(1), pages 91-117, January.
    4. Hikaru Hanawa Peterson & William G. Tomek, 2005. "How much of commodity price behavior can a rational expectations storage model explain?," Agricultural Economics, International Association of Agricultural Economists, vol. 33(3), pages 289-303, November.
    5. Garcia, Philip & Adam, Brian D. & Hauser, Robert J., 1994. "The Use Of Mean-Variance For Commodity Futures And Options Hedging Decisions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(1), pages 1-14, July.
    6. Jirik, Mark A. & Irwin, Scott H. & Good, Darrel L. & Jackson, Thomas E. & Martines-Filho, Joao Gomes, 2000. "The Performance Of Agricultural Market Advisory Services In Marketing Wheat," 2000 Conference, April 17-18 2000, Chicago, Illinois 18928, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Alexander, Vickie J. & Musser, Wesley N. & Mason, George, 1986. "Futures Markets and Firm Decisions Under Price, Production, and Financial Uncertainty," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 18(2), pages 39-50, December.
    8. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, October.
    9. Tomek, William G. & Peterson, Hikaru Hanawa, 2000. "Risk Management in Agricultural Markets: A Survey," Staff Papers 121140, Cornell University, Department of Applied Economics and Management.
    10. Ani L. Katchova & Mario J. Miranda, 2004. "Two-Step Econometric Estimation of Farm Characteristics Affecting Marketing Contract Decisions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 88-102.
    11. Brorsen, B. Wade & Anderson, Kim B., 2001. "Implications of Behavioral Finance for Farmer Marketing Strategy Recommendation," 2001 Conference, April 23-24, 2001, St. Louis, Missouri 18952, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    12. Thompson, Sarahelen R. & Eales, James S. & Seibold, David, 1993. "Comparison Of Liquidity Costs Between The Kansas City And Chicago Wheat Futures Contracts," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-13, December.
    13. Joao Martines-Filho, 2006. "The Performance of Agricultural Market Advisory Services in Corn and Soybeans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 162-181.
    14. Brorsen, B. Wade & Irwin, Scott H., 1996. "Improving The Relevance Of Research On Price Forecasting And Marketing Strategies," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 25(1), pages 1-8, April.
    15. Cabrini, Silvina M. & Stark, Brian G. & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes, 2005. "Portfolios of Agricultural Market Advisory Services: How Much Diversification is Enough?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-14, April.
    16. Townsend, John P. & Brorsen, B. Wade, 2000. "Cost Of Forward Contracting Hard Red Winter Wheat," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(1), pages 1-6, April.
    17. Robert N. Wisner & E. Neal Blue & E. Dean Baldwin, 1998. "Preharvest Marketing Strategies Increase Net Returns for Corn and Soybean Growers," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 20(2), pages 288-307.
    18. Jackson, Thomas E. & Irwin, Scott H. & Good, Darrel L., 1999. "1997 Pricing Performance Of Market Advisory Services For Corn And Soybeans," AgMAS Project Research Reports 14780, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    19. Schroeder, Ted C. & Parcell, Joseph L. & Kastens, Terry L. & Dhuyvetter, Kevin C., 1998. "Perceptions Of Marketing Strategies: Producers Versus Extension Economists," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
    20. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Batts, Ryan M., 2006. "The Pricing Performance of Market Advisory Services in Corn and Soybeans Over 1995-2004: A Non-Technical Summary," AgMAS Project Research Reports 37456, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    21. Silvina M. Cabrini & Brian G. Stark & Hayri Önal & Scott H. Irwin & Darrel L. Good & João Martines-Filho, 2004. "Efficiency Analysis of Agricultural Market Advisory Services: A Nonlinear Mixed-Integer Programming Approach," Manufacturing & Service Operations Management, INFORMS, vol. 6(3), pages 237-252, December.
    22. Brown, Stephen J, et al, 1992. "Survivorship Bias in Performance Studies," The Review of Financial Studies, Society for Financial Studies, vol. 5(4), pages 553-580.
    23. Judith Chevalier & Glenn Ellison, 1999. "Are Some Mutual Fund Managers Better Than Others? Cross‐Sectional Patterns in Behavior and Performance," Journal of Finance, American Finance Association, vol. 54(3), pages 875-899, June.
    24. Shi, Wei & Irwin, Scott H. & Good, Darrel L. & Hagedorn, Lewis A., 2004. "The Cost Of Forward Contracting," 2004 Annual meeting, August 1-4, Denver, CO 20409, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    25. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    26. Brad M. Barber & Terrance Odean, 2000. "Trading Is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors," Journal of Finance, American Finance Association, vol. 55(2), pages 773-806, April.
    27. Roll, Richard, 1984. "A Simple Implicit Measure of the Effective Bid-Ask Spread in an Efficient Market," Journal of Finance, American Finance Association, vol. 39(4), pages 1127-1139, September.
    28. Martines-Filho, Joao Gomes & Good, Darrel L. & Irwin, Scott H., 2001. "1999 Pricing Performance Of Market Advisory Servives For Wheat," AgMAS Project Research Reports 14788, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    29. Brorsen, B. Wade & Anderson, Kim B., 1994. "Cash Wheat Marketing: Strategies for Real People," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 12(2), pages 1-10.
    30. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Batts, Ryan M., 2006. "The Pricing Performance of Market Advisory Services in Corn and Soybeans Over 1995-2004," AgMAS Project Research Reports 37513, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    31. Malkiel, Burton G, 1995. "Returns from Investing in Equity Mutual Funds 1971 to 1991," Journal of Finance, American Finance Association, vol. 50(2), pages 549-572, June.
    32. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Jackson, Thomas E., 2000. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Corn And Soybean Markets Over 1995-1998," AgMAS Project Research Reports 14786, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    33. Carpenter, Jennifer N. & Lynch, Anthony W., 1999. "Survivorship bias and attrition effects in measures of performance persistence," Journal of Financial Economics, Elsevier, vol. 54(3), pages 337-374, December.
    34. Kalous, Tod & Dhuyvetter, Kevin & Kastens, Terry, 2005. "A Case Study of a Market Advisory Service's Performance in Marketing Hard Red Winter Wheat in Kansas," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2005, pages 1-10.
    35. Working, Holbrook, 1967. "Tests of a Theory Concerning Floor Trading on Commodity Exchanges," Food Research Institute Studies, Stanford University, Food Research Institute, vol. 7(Supplemen), pages 1-44.
    36. Jirik, Mark A. & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Jackson, Thomas E., 2001. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Wheat Market Over 1995-1998," AgMAS Project Research Reports 14778, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    37. Good, Darrel L. & Irwin, Scott H. & Jackson, Thomas E., 1998. "Development Of A Market Benchmark Price For Agmas Performance Evaluations," AgMAS Project Research Reports 14783, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    38. Jirik, Mark A. & Irwin, Scott H. & Good, Darrel L. & Jackson, Thomas E. & Martines-Filho, Joao Gomes, 2000. "The 1995 Through 1998 Pricing Performance Of Market Advisory Services For Wheat," AgMAS Project Research Reports 14777, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Batts, Ryan M. & Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2009. "Advisory Service Marketing Profiles for Soft Red Winter Wheat over 1995-2004," AgMAS Project Research Reports 183427, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    2. Batts, Ryan M. & Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2009. "Advisory Service Marketing Profiles for Hard Red Winter Wheat over 1995-2004," AgMAS Project Research Reports 183428, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    3. Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2012. "The Pricing Performance of Market Advisory Services in Cattle Over 1995-2004," AgMAS Project Research Reports 183430, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    4. Webber, Ricky L. & Batts, Ryan M. & Irwin, Scott H. & Good, Darrel L., 2012. "The Pricing Performance of Market Advisory Services in Hogs Over 1995-2004," AgMAS Project Research Reports 183429, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Good, Darrel L. & Irwin, Scott H. & Martines-Filho, Joao Gomes & Hagedorn, Lewis A., 2005. "The Pricing Performance of Market Advisory Services in Corn and Soybeans over 1995-2003," AgMAS Project Research Reports 14775, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    2. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Batts, Ryan M., 2006. "The Pricing Performance of Market Advisory Services in Corn and Soybeans Over 1995-2004," AgMAS Project Research Reports 37513, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    3. Irwin, Scott H. & Martines-Filho, Joao Gomes & Good, Darrel L., 2003. "The Pricing Performance Of Market Advisory Services In Corn And Soybeans Over 1995-2001," AgMAS Project Research Reports 14773, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    4. Good, Darrel L. & Martines-Filho, Joao Gomes & Irwin, Scott H., 2002. "The Pricing Performance Of Market Advisory Services In Corn And Soybeans Over 1995-2000," AgMAS Project Research Reports 14784, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    5. Joao Martines-Filho, 2006. "The Performance of Agricultural Market Advisory Services in Corn and Soybeans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 162-181.
    6. Jirik, Mark A. & Irwin, Scott H. & Good, Darrel L. & Jackson, Thomas E. & Martines-Filho, Joao Gomes, 2000. "The Performance Of Agricultural Market Advisory Services In Marketing Wheat," 2000 Conference, April 17-18 2000, Chicago, Illinois 18928, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Jackson, Thomas E., 2000. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Corn And Soybean Markets Over 1995-1998," AgMAS Project Research Reports 14786, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    8. Irwin, Scott H. & Jackson, Thomas E. & Good, Darrel L., 1999. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Corn And Soybean Markets Over 1995-1997," AgMAS Project Research Reports 14789, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    9. Peterson, Hikaru Hanawa & Tomek, William G., 2001. "Income-Enhancing And Risk-Reducing Properties Of Marketing Practices," 2001 Annual meeting, August 5-8, Chicago, IL 20613, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Webber, Ricky L. & Batts, Ryan M. & Irwin, Scott H. & Good, Darrel L., 2012. "The Pricing Performance of Market Advisory Services in Hogs Over 1995-2004," AgMAS Project Research Reports 183429, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    11. Jirik, Mark A. & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes & Jackson, Thomas E., 2001. "Do Agricultural Market Advisory Services Beat The Market? Evidence From The Wheat Market Over 1995-1998," AgMAS Project Research Reports 14778, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    12. Klumpp, Joni M. & Brorsen, B. Wade & Anderson, Kim B., 2005. "The Impact of Marketing Strategy Information on the Producer's Selling Decision," 2005 Conference, April 18-19, 2005, St. Louis, Missouri 19036, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    13. Li, Xin & Paulson, Nicholas, 2014. "Is Farm Management Skill Persistent?," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170170, Agricultural and Applied Economics Association.
    14. Dietz, Sarah N. & Aulerich, Nicole M. & Irwin, Scott H. & Good, Darrel L., 2009. "The Marketing Performance of Illinois and Kansas Wheat Farmers," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(1), pages 1-15, April.
    15. Peterson, Hikaru Hanawa & Tomek, William G., 2001. "Income Enhancing and Risk Management Properties of Marketing Practices," 2001 Conference, April 23-24, 2001, St. Louis, Missouri 18963, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    16. Joni M. Klumpp & B. Wade Brorsen & Kim B. Anderson, 2008. "Market Advisory Service Recommendations and Wheat Producers' Selling Decisions," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(1), pages 117-128, March.
    17. Isengildina, Olga & Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 2004. "Crop Farmers’ Use of Market Advisory Services," AgMAS Project Research Reports 37489, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    18. Brandenberger, Tracy L. & Irwin, Scott H. & Good, Darrel L., 2012. "The Pricing Performance of Market Advisory Services in Cattle Over 1995-2004," AgMAS Project Research Reports 183430, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    19. Park, Cheol-Ho & Irwin, Scott H., 2004. "The Profitability Of Technical Trading Rules In Us Futures Markets: A Data Snooping Free Test," 2004 Conference, April 19-20, 2004, St. Louis, Missouri 19011, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    20. Meredith Beechey & David Gruen & James Vickery, 2000. "The Efficient Market Hypothesis: A Survey," RBA Research Discussion Papers rdp2000-01, Reserve Bank of Australia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uiucrr:183426. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/dauiuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.