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| Cabrini, Silvina M.; Stark, Brian G.; Irwin, Scott H.; Good, Darrel L.; Martines-Filho, Joao Gomes. |
| This study analyzes the potential risk reduction gains from naive diversification (equal-weighting) among market advisory services for corn and soybeans. The total possible decrease in risk through naive diversification is small, mainly because advisory prices are highly correlated on average. Moreover, since marginal risk reduction benefits decrease rapidly with size, and the cost of holding the portfolios increases linearly due to services' subscription fees, it is optimal to limit portfolio size to a few advisory programs. Based on certainty equivalent measures and two representative risk aversion levels, preferred portfolio sizes are between one and three services. Overall, there does not appear to be strong justification for farmers adopting... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Agribusiness; Agricultural Finance. |
| Ano: 2004 |
URL: http://purl.umn.edu/19013 |
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| Martines-Filho, Joao Gomes; Irwin, Scott H.; Good, Darrel L.; Cabrini, Silvina M.; Stark, Brian G.; Shi, Wei; Webber, Rick L.; Hagedorn, Lewis A.; Williams, Steven L.. |
| This report presents marketing profiles and loan deficiency payment/marketing loan gain profiles for the advisory services followed by the AgMAS Project for the 1995 through 2000 corn crops. Marketing profiles are constructed by plotting the cumulative net amount priced under each program's set of recommendations throughout a crop year. Loan deficiency payment/marketing loan gain (LDP/MLG) profiles are constructed by plotting the cumulative percentage of the crop on which the LDP/MLG was claimed during the crop year. Marketing profiles provide information to evaluate the style of advisory services in several ways. The percentage of crop priced is a measure of within-crop year price risk. The higher the proportion of a crop priced, the lower the... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Marketing. |
| Ano: 2003 |
URL: http://purl.umn.edu/14776 |
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| Martines-Filho, Joao Gomes; Irwin, Scott H.; Good, Darrel L.; Cabrini, Silvina M.; Stark, Brian G.; Shi, Wei; Webber, Rick L.; Hagedorn, Lewis A.; Williams, Steven L.. |
| This report presents marketing profiles and loan deficiency payment/marketing loan gain profiles for the advisory services followed by the AgMAS Project for the 1995 through 2000 soybean crops. Marketing profiles are constructed by plotting the cumulative net amount priced under each program's set of recommendations throughout a crop year. Loan deficiency payment/marketing loan gain (LDP/MLG) profiles are constructed by plotting the cumulative percentage of the crop on which the LDP/MLG was claimed during the crop year. Marketing profiles provide information to evaluate the style of advisory services in several ways. The percentage of crop priced is a measure of within-crop year price risk. The higher the proportion of a crop priced, the lower the... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Marketing. |
| Ano: 2003 |
URL: http://purl.umn.edu/14791 |
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| Stark, Brian G.; Cabrini, Silvina M.; Irwin, Scott H.; Good, Darrel L.; Martines-Filho, Joao Gomes. |
| Agricultural market advisory services offer specific advice to farmers on how to market their commodities. Farmers can subscribe to one or more of these services and follow their advice as a way of managing price risk. According to portfolio theory, a combination of these services may have risk/return benefits compared to individual services. This report analyzes the potential risk reduction gains from naïve diversification among market advisory services for corn and soybeans. Results show that increasing the number of (equal-weighting) services reduces portfolio expected risk, but the marginal decrease in risk from adding a new service decreases rapidly with portfolio size. The risk reduction benefits of naïve diversification among advisory services... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Marketing. |
| Ano: 2003 |
URL: http://purl.umn.edu/14774 |
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