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Style and Performance of Agricultural Market Advisory Services

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  • Silvina M. Cabrini
  • Scott H. Irwin
  • Darrel L. Good

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. Copyright 2007, Oxford University Press.

Suggested Citation

  • Silvina M. Cabrini & Scott H. Irwin & Darrel L. Good, 2007. "Style and Performance of Agricultural Market Advisory Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 607-623.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:3:p:607-623
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01007.x
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    References listed on IDEAS

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    1. Terrance Odean., 1996. "Volume, Volatility, Price and Profit When All Trader Are Above Average," Research Program in Finance Working Papers RPF-266, University of California at Berkeley.
    2. Colino, Evelyn V. & Cabrini, Silvina M. & Irwin, Scott H. & Good, Darrel L. & Martines-Filho, Joao Gomes, 2004. "Advisory Service Marketing Profiles for Corn in 2001," AgMAS Project Research Reports 37493, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    3. 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., 2003. "Advisory Service Marketing Profiles For Corn Over 1995-2000," AgMAS Project Research Reports 14776, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    4. 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.
    5. 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.
    6. 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 37510, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    7. Colino, Evelyn V. & Cabrini, Silvina M. & Irwin, Scott H. & Good, Darrel L. & Joao, Martines-Filho, 2004. "Advisory Service Marketing Profiles for Soybeans in 2001," AgMAS Project Research Reports 37507, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    8. Pennings, Joost M.E. & Irwin, Scott H. & Good, Darrel L., 2001. "Modeling Farmers' Use of Market Advisory Services," 2001 Conference, April 23-24, 2001, St. Louis, Missouri 18950, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    9. 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.
    10. 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., 2003. "Advisory Service Marketing Profiles For Soybeans Over 1995-2000," AgMAS Project Research Reports 14791, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    11. Cunningham, Lewis T., III & Brorsen, B. Wade & Anderson, Kim B., 2004. "Cash Marketing Styles And Performance Persistence Of Wheat Producers," 2004 Conference, April 19-20, 2004, St. Louis, Missouri 19031, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    12. 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.
    13. Terrance Odean, 1999. "Do Investors Trade Too Much?," American Economic Review, American Economic Association, vol. 89(5), pages 1279-1298, December.
    14. repec:bla:jfinan:v:53:y:1998:i:6:p:1887-1934 is not listed on IDEAS
    15. 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.
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    Cited by:

    1. Mattos, Fabio & Fryza, Stefanie A., 2012. "Marketing Contracts, Overconfidence, and Timing in the Canadian Wheat Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(3), pages 1-16.
    2. Schulze, Birgit, 2011. "Dynamic Markets – Dynamic Relationships: The Example of Grain Marketing in Germany," 2011 International European Forum, February 14-18, 2011, Innsbruck-Igls, Austria 122001, International European Forum on System Dynamics and Innovation in Food Networks.
    3. Juan Sesmero & Richard Perrin & Lilyan Fulginiti, 2018. "A nonparametric frontier measure of marketing efficiency: An illustration with corn ethanol plants," Agribusiness, John Wiley & Sons, Ltd., vol. 34(3), pages 579-596, June.
    4. 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.
    5. Jianying Xiao & Yan Song & Heyuan You, 2020. "Explaining Peasants’ Intention and Behavior of Farmland Trusteeship in China: Implications for Sustainable Agricultural Production," Sustainability, MDPI, vol. 12(14), pages 1-17, July.

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