Advisory Service Marketing Profiles for Soybeans in 2001
This report presents marketing profiles and loan deficiency payment/marketing loan gain profiles for the advisory services followed by the AgMAS Project for the 2001 soybean crop. Marketing profiles are constructed by plotting the cumulative net amount priced under each program’s set of recommendations throughout the 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 sensitivity of the farmer’s position value to crop price changes. For example, when 100% of the crop is priced there is no price sensitivity, which means that changes in price do not affect the value of the farmer’s position. On the other hand, when the amount priced is 0%, the value of the farmer’s position will vary in the same proportion as the change in price. Marketing profiles, therefore, allow investigating the evolution of price sensitivity under each service’s set of recommendations along the marketing window. Marketing profiles also provide other useful information. The number of steps in the profile lines and the location of these steps in the marketing window provide information about timing, frequency and size of recommended transactions. It is also possible to determine from the marketing profile figures how intensely a program uses options markets, since when options positions are open the profile line is irregular. In the same way, LDP/MLG profiles provide information about the size and timing of LDP/MLG claims.
|Date of creation:||Apr 2004|
|Date of revision:|
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- Stephen Brown & William Goetzmann, 2001.
"Hedge Funds With Style,"
Yale School of Management Working Papers
ysm21, Yale School of Management, revised 01 Apr 2008.
- Joost M.E. Pennings & Scott H. Irwin & Darrel L. Good & Olga Isengildina, 2005. "Heterogeneity in the likelihood of market advisory service use by U.S. crop producers," Agribusiness, John Wiley & Sons, Ltd., vol. 21(1), pages 109-128.
- Bertoli, Roberto & Zuluaf, Carl R. & Irwin, Scott H. & Jackson, Thomas E. & Good, Darrel L., 1999. "The Marketing Style Of Advisory Services For Corn And Soybeans In 1995," AgMAS Project Research Reports 14792, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
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