RISK-RETURNS OF COTTON AND SOYBEAN ENTERPRISES FOR MISSISSIPPI COUNTY, ARK

Size: px
Start display at page:

Download "RISK-RETURNS OF COTTON AND SOYBEAN ENTERPRISES FOR MISSISSIPPI COUNTY, ARK"

Transcription

1 AAES Research Series 521 RISK-RETURNS OF COTTON AND SOYBEAN ENTERPRISES FOR MISSISSIPPI COUNTY, ARK.: A COMPARISON OF ALTERNATIVE MARKETING STRATEGIES WITHIN A WHOLE FARM FRAMEWORK G. Rodríguez, A. McKenzie, and L. Parsch 1 RESEARCH PROBLEM In the state of Arkansas, crop production represents an important agricultural sector of the economy. However, crop farmers have to make production and marketing decisions without knowing with certainty future price and output. Therefore, farmers must make their decisions in an environment of uncertainty where time is also a decisive factor. Thus, the relative performance of different production and marketing strategies in terms of risk-returns is of great interest to farmers, and is the primary objective of this study. BACKGROUND INFORMATION Farmers are typically assumed to be in general risk-averse and to have a certain trade off between risk and estimated revenue. For crop farmers, revenue comes from crop sales and government support payments. According to Hanson et al. (1999) as a result of the change in the role of the government after the 1996 farm bill, farmers have greater responsibility for using their own risk-management programs. The price support programs were reduced, generating a riskier situation for crop farmers selling their products. Given this prevailing economic climate, it is important to direct research focus on the ability of marketing and hedging strategies to reduce return risk for cotton and soybeans farmers in Mississippi County, Arkansas. 1 Research Specialist, associate professor, and associate professor, respectively, Department of Agricultural Economics and Agribusiness, University of Arkansas at Fayetteville. 270

2 Summaries of Arkansas Cotton Research 2003 RESEARCH DESCRIPTION Thirty-seven marketing strategies developed in this study are summarized in Table 1. Each strategy represents a portfolio (combination) of different hedged (cash and futures) positions for cotton, soybeans, and crop mix enterprises. The possibility of utilizing hedging strategies adds potential further risk-reduction benefits to the crop-mix enterprise. Cash only strategies are also included as a means of comparing hedging effectiveness. Each strategy is analyzed in terms of net returns generated on a per-acre basis. The simulation model characterizes the risk-return profiles faced by cotton and soybean producers in Mississippi County, Arkansas. Yield data were gathered from the National Agricultural Statistics Service (NASS). Alternatively, cash price data were obtained from the Memphis cash market in Tennessee and futures price data were obtained from the New York Cotton Exchange (NYCE) and the Chicago Board of Trade (CBOT). Yield and price data were collected for the years Production costs were calculated from budgets generated by the Arkansas Cooperative Extension Service (CES). Simulated distributions of net returns above total costs for cotton and soybean crop enterprises under different marketing strategies are evaluated using stochastic dominance with respect to a function (SDRF). Under this approach, the different marketing (hedging) strategies associated with different crop enterprises can then be ranked in terms of their risk-return characteristics. The marketing dates for the 37 strategies are determined by the respective harvest time for each crop. Out of the 37 strategies, six are cash positions and 31 are hedged positions that begin in June for soybeans and in May for cotton, and end with sale dates in November and December, respectively. As such, the hedging strategies simulate traditional hedges, initiated at planting time and offset at harvest time. The variation in the strategies is based upon the level of hedging, or the proportion of expected production covered by hedging. RESULTS AND DISCUSSION The SDRF ranking of the 37 marketing strategies is presented in Table 2 using a RAC of zero (risk-neutral) and a RAC of 0.5 (extremely risk-averse). This table also shows the rank for each marketing strategy with respect to the different enterprise types for the two different RAC levels. Assuming risk neutrality (RAC = 0), cash-only and hedging strategies (1 to 8) associated with cotton only enterprises would be preferred to equivalent hedging strategies (9 to 16) for soybeans-only enterprises. These cotton strategies ranked in the first eight positions. The equivalent soybean strategies ranked in the last eight positions with the exception of strategy 15 (naive soybeans hedge 100% futures position against 100% cash position), which ranked 29 th. Strategies for crop-mix enterprises (strategies 17 to 31) ranked from 11 th (strategy 29) to 26 th (strategy 31, the optimal revenue risk-minimizing strategy). 271

3 AAES Research Series 521 The most preferred strategy was the cotton 100% cash position with no hedge (strategy 1). On the other hand, the equivalent 100% cash soybeans position with no hedge (strategy 9) ranked in last position. When the degree of risk is irrelevant, a farmer would prefer marketing strategies associated with cotton enterprises as they generated the highest net returns. Alternatively, when a farmer is extremely risk averse (RAC = 0.5), strategy 1 ranked 34 th. Therefore for a cotton enterprise with extreme risk aversion, results imply that selling in the harvest-time cash market would be one of the least preferred marketing strategies. Under the extreme riskaversion assumption, the SDRF criterion used in this study give cotton enterprise strategies a low ranking. This is due to the fact that net revenues generated by selling in the harvest-time cotton cash market have a large standard deviation and the minimum potential loss associated with any hedging level is large (ranging from $110/ac up to $140/ac). Short hedging is moderately effective only at low levels of coverage (e.g., 25%, 33% and 50% hedging strategies are preferred to the cash marketing strategy). In contrast, marketing strategies associated with soybean enterprises are preferred when farmers are extremely risk-averse. However, this result is not attributable to effective hedging. The larger the amount of expected production covered by short-hedging, the poorer the strategy s performance. The best strategy for a soybeans-only enterprise is to simply sell in the cash market without hedging (strategy 9 which ranks 2 nd overall). Thus, the preference for marketing strategies associated with soybean enterprises over strategies associated with cotton enterprises may be attributed to the low standard deviation of net returns and to the relatively small minimum potential loss ($80/ac) generated by selling in the soybean harvest cash market. The most preferred risk reducing strategy (assuming extreme risk aversion) is crop-mix hedging strategy 31, the optimal revenue risk-minimizing strategy). However, this strategy was desired from a statistical model and would not likely be used in an applied setting. In summary, under the SDRF criterion, hedging is ineffective for soybean enterprises, while hedging at moderately small levels (25% to 50% short hedges) is preferred to a cash marketing strategy for cotton enterprises. Diversification may reduce risk but may also reduce the level of returns. SDRF provides a good approach to analyze the potential benefits of diversification in this risk-return tradeoff framework since it takes into account both the level of returns as well as the risk associated with those returns when ranking strategies. 272

4 Summaries of Arkansas Cotton Research 2003 PRACTICAL APPLICATION The importance of this study is highlighted by the fact that no other preharvest row-crop marketing studies have been conducted for the state of Arkansas using crop-mix hedging strategies. In addition, previous Arkansas studies, which have analyzed revenue risk (i.e., yield risk and price risk), have used a simplified model to explain the impact of price variability on revenue risk by assuming farmers receive a seasonal average cash price. The results of this study show that existing marketing tools in the form of futures price hedging can be used to reduce revenue risk (i.e., yield risk and price risk) for Mississippi County cotton farmers. LITERATURE CITED Hanson, Steven D, Myers, Robert J., and Hilker, James H Hedging with futures and options under a truncated cash price distribution. Southern Agr. Econ. Assoc. 31(Ma31:

5 AAES Research Series 521 Table 1. Cotton, soybeans, and crop-mix marketing strategies examined for Mississippi County, Ark., in Number Cash position Hedge position 1 Cash position Hedge position a b c d e f g h i A negative number indicates a short hedge position and vice-versa a Naive cotton hedge 100% cotton cash, 100% cotton futures b Optimal risk minimization hedge ratio for 100% cash cotton c Naive soybean hedge 100% soybean cash, 100% soybean futures d Optimal risk minimization hedge ratio for 100% soybean cotton e 100% hedges for proportional cash positions in cotton and soybean f Optimal risk minimization hedge for proportional cash positions in cotton and soybean g Optimal price risk minimization hedge for 100% soybean h Optimal price risk minimization hedge for 100% cotton 274

6 Summaries of Arkansas Cotton Research 2003 Table 2. Rankings of 37 marketing strategies based on SDRF for cotton, soybeans and crop-mix enterprises in Mississippi County, Ark., in Cotton position Marketing stragety Soybean position Risk-aversion coeficient (RAC) Rank Cash Hedge Cash Hedge Neutral Extremely risk-averse

Input Costs Trends for Arkansas Field Crops, AG -1291

Input Costs Trends for Arkansas Field Crops, AG -1291 Input Costs Trends for Arkansas Field Crops, 2007-2013 AG -1291 Input Costs Trends for Arkansas Field Crops, 2007-2013 October 2013 AG-1291 Archie Flanders Department of Agricultural Economics and Agribusiness

More information

Corn Basis Information By Tennessee Crop Reporting District

Corn Basis Information By Tennessee Crop Reporting District UT EXTENSION THE UNIVERSITY OF TENNESSEE INSTITUTE OF AGRICULTURE AE 05-13 Corn Basis Information By Tennessee Crop Reporting District 1994-2003 Delton C. Gerloff, Professor The University of Tennessee

More information

Economic Impacts of the Safety Net Provisions in the 2012 Senate and House Farm Bills on AFPC s Representative Crop Farms

Economic Impacts of the Safety Net Provisions in the 2012 Senate and House Farm Bills on AFPC s Representative Crop Farms & RESEARCH Economic Impacts of the Safety Net Provisions in the 2012 Senate and House Farm Bills on AFPC s Representative Crop Farms Working Paper 12-2 July 2012 350 300 250 200 150 100 50 0 2011 2012

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update The next will be published November 13, 2018, due to the Veteran s Day holiday on Monday. Corn Harvesting Progress 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 9/9 9/16 9/23 9/30 10/7

More information

THE HISTORICAL BASIS RECORD FOR GRAIN AND SOYBEANS IN DELAWARE; MARKETING YEARS 1996/97 to 2000/01. Philip L. Towle Carl L. German U. C.

THE HISTORICAL BASIS RECORD FOR GRAIN AND SOYBEANS IN DELAWARE; MARKETING YEARS 1996/97 to 2000/01. Philip L. Towle Carl L. German U. C. THE HISTORICAL BASIS RECORD FOR GRAIN AND SOYBEANS IN DELAWARE; MARKETING YEARS 1996/97 to 2000/01 Philip L. Towle Carl L. German U. C. Toensmeyer May 31, 2002 University of Delaware College of Agriculture

More information

The World Bank Agriculture Investment and Market Development Project (P143417)

The World Bank Agriculture Investment and Market Development Project (P143417) Public Disclosure Authorized AFRICA Cameroon Agriculture Global Practice IBRD/IDA Investment Project Financing FY 2015 Seq No: 6 ARCHIVED on 22-Dec-2016 ISR26129 Implementing Agencies: MINADER Public Disclosure

More information

North Dakota Lignite Energy Industry's Contribution to the State Economy for 2002 and Projected for 2003

North Dakota Lignite Energy Industry's Contribution to the State Economy for 2002 and Projected for 2003 AAE 03002 March 2003 North Dakota Lignite Energy Industry's Contribution to the State Economy for 2002 and Projected for 2003 Randal C. Coon and F. Larry Leistritz * This report provides estimates of the

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update Corn Crop Condition Percent of Acreage Rated Good or Excellent 85 80 75 70 65 60 55 50 45 As of September 9, USDA rates the crop at 68% good to excellent. The rating is up one point

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update Corn Crop Condition Percent of Acreage Rated Good or Excellent 85 80 75 70 65 60 55 50 45 The U.S. corn crop was rated 69% good-to-excellent on September 23, up 1% from week-ago,

More information

Example problem in Birge & Louveaux, Introduction to Stochastic Programming. SLPwR: Farmer Problem page 1 D.L.Bricker

Example problem in Birge & Louveaux, Introduction to Stochastic Programming. SLPwR: Farmer Problem page 1 D.L.Bricker Example problem in Birge & Louveaux, Introduction to Stochastic Programming SLPwR: Farmer Problem page 1 D.L.Bricker A farmer raises wheat, corn, and sugar beets on 500 acres of land. Before the planting

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update Corn Crop Condition Percent of Acreage Rated Good or Excellent 85 80 75 70 65 60 55 50 45 In its weekly Crop Progress Report for September 16, the USDA stated the 18-state average

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update This is our last for the 2018 planting, growing and harvesting seasons. USDA will publish their Crop Progress Report again in April 2019, and we will continue our coverage sometime

More information

WEATHER DERIVATIVES AS A VEHICLE TO REALISE THE SKILL OF SEASONAL FORECASTS

WEATHER DERIVATIVES AS A VEHICLE TO REALISE THE SKILL OF SEASONAL FORECASTS JP1.6 WEATHER DERIVATIVES AS A VEHICLE TO REALISE THE SKILL OF SEASONAL FORECASTS Harvey Stern* and Shoni S. Dawkins** Bureau of Meteorology, Melbourne, Australia 1. INTRODUCTION 1.1 Historical Note More

More information

Seed Cotton Program Workshop

Seed Cotton Program Workshop Seed Cotton Program Workshop USDA FSA, LFBF, LSU AgCenter, Mississippi State University Extension Service Thursday, August 16, 2018 Oak Grove, LA Seed Cotton Program Workshop Program Overview and Farm

More information

Crop Enterprise Budget Dry Beans, Powell Area

Crop Enterprise Budget Dry Beans, Powell Area Crop Enterprise Budget Dry Beans, Powell Area John P. Hewlett, Farm/Ranch Management Extension Specialist Jay Jenkins, Extension Educator Paul A. Burgener, Former Graduate Assistant Jim J. Jacobs, Professor,

More information

BUILDING BUSINESS SUCCESS

BUILDING BUSINESS SUCCESS BUILDING BUSINESS SUCCESS Cost of Producing Fresh and Processing Blueberries in the Fraser Valley of British Columbia Spring 2016 The BUILDING BUSINESS SUCCESS enterprise budget series were developed to

More information

The Use of Copula Functions in Pricing Weather Contracts for the California Wine Industry

The Use of Copula Functions in Pricing Weather Contracts for the California Wine Industry The Use of Copula Functions in Pricing Weather Contracts for the California Wine Industry Don Cyr (contact author) Dean, Goodman School of Business Brock University St. Catharines ON, Canada dcyr@brocku,ca

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update Corn Crop Condition Percent of Acreage Rated Good or Excellent 85 80 75 70 65 60 55 50 45 Corn condition this week is the same as the last two weeks in the good/excellent category,

More information

Virginia Basis Tables for Corn, Soybeans, and Wheat

Virginia Basis Tables for Corn, Soybeans, and Wheat VIRGINIA POL VTECHNIC INSTn U 11~. UNIVERSITY LIBRARIES Agricultural and Applied Economics Virginia Basis Tables for Corn, Soybeans, and Wheat David E. Kenyon* Introduction Futures prices determined at

More information

2015 Costs and Returns Estimate Eastern Idaho: Alfalfa Hay Establishment in Grain Stubble Paul E. Patterson Background and Assumptions

2015 Costs and Returns Estimate Eastern Idaho: Alfalfa Hay Establishment in Grain Stubble Paul E. Patterson Background and Assumptions 2015 Costs and Returns Estimate Eastern Idaho: Alfalfa Hay Establishment in Grain Stubble Paul E. Patterson Background and Assumptions Eastern Idaho The University of Idaho s costs and returns estimates

More information

Hosts: Vancouver, British Columbia, Canada June 16-18,

Hosts: Vancouver, British Columbia, Canada June 16-18, Hosts: Vancouver, British Columbia, Canada June 16-18, 2013 www.iarfic.org Financial climate instruments as a guide to facilitate planting of winter wheat in Saskatchewan G Cornelis van Kooten Professor

More information

Agriculture, An Alternative Asset Worth Harvesting

Agriculture, An Alternative Asset Worth Harvesting Agriculture, An Alternative Asset Worth Harvesting La Nina y El Toro We ended the most recent article Do Not Say You Were Not Warned - Again with the 720 Global tag line At 720 Global, risk is not a number.

More information

ECO 317 Economics of Uncertainty Fall Term 2009 Slides to accompany 13. Markets and Efficient Risk-Bearing: Examples and Extensions

ECO 317 Economics of Uncertainty Fall Term 2009 Slides to accompany 13. Markets and Efficient Risk-Bearing: Examples and Extensions ECO 317 Economics of Uncertainty Fall Term 2009 Slides to accompany 13. Markets and Efficient Risk-Bearing: Examples and Extensions 1. Allocation of Risk in Mean-Variance Framework S states of the world,

More information

The World Bank Agriculture Investment and Market Development Project (P143417)

The World Bank Agriculture Investment and Market Development Project (P143417) Public Disclosure Authorized AFRICA Cameroon Agriculture Global Practice IBRD/IDA Investment Project Financing FY 2015 Seq No: 5 ARCHIVED on 17-Jun-2016 ISR23928 Implementing Agencies: MINADER Public Disclosure

More information

Creating a Staff Development Plan with Esri

Creating a Staff Development Plan with Esri Creating a Staff Development Plan with Esri Michael Green David Schneider Guest Presenter: Shane Feirer, University of California Esri UC 2014 Technical Workshop Agenda What is a Staff Development Plan?

More information

Cotton Insect Losses 1991

Cotton Insect Losses 1991 Cotton Insect Losses 1991 Compiled for National Cotton Council Robert B. Head, Chairman Cooperative Extension Service Mississippi State University Mississippi State, MS State Coordinators Alabama -- Dr.

More information

Formulating Price Forecasts Using Readily Available Information

Formulating Price Forecasts Using Readily Available Information Kansas State U N I V E R S I T Y Department of Agricultural Economics www.agmanager.info Formulating Price Forecasts Using Readily Available Information Kevin C. Dhuyvetter 785-532-3527 -- kcd@ksu.edu

More information

Predict. Perform. Profit. Highly accurate rain forecasts a missing link to Climate Resilient Agriculture in West Africa

Predict. Perform. Profit. Highly accurate rain forecasts a missing link to Climate Resilient Agriculture in West Africa Predict. Perform. Profit. Highly accurate rain forecasts a missing link to Climate Resilient Agriculture in West Africa Presentation for Food Security Working Group 9 May 2017 Climate Change & Food Security

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update We would like to welcome you to another season of Doane s Weekly Crop Weather Update Progress Chartbook. The goal is to provide a quick visual overview of a number of the key gauges

More information

One way to deal with the unpredictable costs of winter weather. By Shane Belvin

One way to deal with the unpredictable costs of winter weather. By Shane Belvin One way to deal with the unpredictable costs of winter weather. By Shane Belvin 32 INTERNATIONAL PARKING INSTITUTE SEPTEMBER 2016 Believe it or not, snow and ice are right around the corner. The volatility

More information

Weather Derivatives-Pricing and Design Issue in India

Weather Derivatives-Pricing and Design Issue in India Weather Derivatives-Pricing and Design Issue in India By Anshul Anand & Surendra Mahadik Introduction: In the last decades, agricultural policies of certain countries focused on adopting and strengthening

More information

Background and Assumptions

Background and Assumptions 2017 Costs and Returns Estimate Southcentral Idaho: Magic Valley Soft White Spring Wheat Ben Eborn, Steven Hines and Juliet Marshall. Magic Valley Background and Assumptions The University of Idaho s costs

More information

Background and Assumptions

Background and Assumptions 2017 Costs and Returns Estimate Eastern Idaho: Lower Rainfall Dryland Feed Barley Ben Eborn and Terrell Sorensen Eastern Idaho Background and Assumptions The University of Idaho s costs and returns estimates

More information

A Spatial Approach to Estimating Factors that Influence the Corn Basis

A Spatial Approach to Estimating Factors that Influence the Corn Basis A Spatial Approach to Estimating Factors that Influence the Corn Basis by Michael K. Adjemian, Todd Kuethe, Vince Breneman, Ryan Williams, Mark Manfredo, and Dwight Sanders Suggested citation format: Adjemian,

More information

Paul Patterson, Steven Hines and Juliet Marshall. Background and Assumptions

Paul Patterson, Steven Hines and Juliet Marshall. Background and Assumptions 2015 Costs and Returns Estimate Southcentral Idaho: Magic Valley Spring Malting Barley Paul Patterson, Steven Hines and Juliet Marshall. Background and Assumptions Magic Valley The University of Idaho

More information

Background and Assumptions

Background and Assumptions 2017 Costs and Returns Estimate Southcentral Idaho: Magic Valley Alfalfa Hay Establishment with Oats Ben Eborn Magic Valley Background and Assumptions The University of Idaho s costs and returns estimates

More information

Morning Comments

Morning Comments Position Management: The table shows how the Model Farm is positioned at this time. Individual recommendations may vary. 2010 Crop 2011 Crop 2012 Crop Corn 100% sold with basis set 50% sold HTA 30% sold

More information

Background and Assumptions

Background and Assumptions 2017 Costs and Returns Estimate Southcentral Idaho: Magic Valley Hard Red Spring Wheat Ben Eborn, Steven Hines and Juliet Marshall. Magic Valley Background and Assumptions The University of Idaho s costs

More information

MARKET WIRE. Jason Vollmer (701) Trygg Olson (701) Nick Smith (701) Adam Allmaras (701)

MARKET WIRE. Jason Vollmer (701) Trygg Olson (701) Nick Smith (701) Adam Allmaras (701) MARKET WIRE Quick Notes: New news in the corn market is limited. Markets continue to see spillover from Friday s USDA report. Carryout was unchanged in Friday s report and exports continue to remain sluggish.

More information

Opportunities and Priorities in a New Era for Weather and Climate Services

Opportunities and Priorities in a New Era for Weather and Climate Services Opportunities and Priorities in a New Era for Weather and Climate Services John A. Dutton The Pennsylvania State University 1. Progress in Weather and Climate Services Rapid changes are sweeping through

More information

Crop Enterprise Budget Sugar Beets, Thick-Planted, Wheatland Area

Crop Enterprise Budget Sugar Beets, Thick-Planted, Wheatland Area Crop Enterprise Budget Sugar Beets, Thick-Planted, Wheatland Area John P. Hewlett, Farm/Ranch Management Extension Specialist Chris Bastian, Research Associate MP-72.3 University of Wyoming - August, 1994

More information

Impact of Alternative Property and Sales Tax Policies on Texas Representative Cotton Farms

Impact of Alternative Property and Sales Tax Policies on Texas Representative Cotton Farms Agricultural & Food Policy Center at Texas A&M University Impact of Alternative Property and Sales Tax Policies on Texas Representative Cotton Farms AFPC Briefing Paper 04-5 December 2004 This work was

More information

The Potential Value of Agricultural Trade Options

The Potential Value of Agricultural Trade Options The Potential Value of Agricultural Trade Options Darren L. Frechette Hedgers located far from organized commodity exchanges suffer a mismatch between their local prices and exchange prices. Futures and

More information

Paul Patterson Background and Assumptions

Paul Patterson Background and Assumptions 2015 Costs and Returns Estimate Southcentral Idaho: Magic Valley Alfalfa Hay Production Paul Patterson Background and Assumptions Magic Valley The University of Idaho s costs and returns estimates are

More information

Background and Assumptions

Background and Assumptions 2017 Costs and Returns Estimate Southcentral Idaho: Magic Valley Alfalfa Hay Production Ben Eborn Magic Valley Background and Assumptions The University of Idaho s costs and returns estimates are based

More information

Accuracy-Informativeness Tradeoff for Interval Forecast Comparison. Olga Isengildina and Fabio Mattos

Accuracy-Informativeness Tradeoff for Interval Forecast Comparison. Olga Isengildina and Fabio Mattos Accuracy-Informativeness Tradeoff for Interval Forecast Comparison by Olga Isengildina and Fabio Mattos Suggested citation format: Isengildina, O., and F. Mattos. 2015. Accuracy-Informativeness Tradeoff

More information

Farm Futures Featured Story. Grainscoop I

Farm Futures Featured Story. Grainscoop I Grainscoop I From: Sent: To: Subject: The Farm Futures Team [farmfutures@farmprogres.ccsend.com] on behalf of The Farm Futures Team [farmfutures@farmprogress.com] Monday, July 15, 2013 2:46 PM grain@grainnotes.com

More information

Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over Darrel L. Good and Scott H.

Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over Darrel L. Good and Scott H. Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over 197-2 by Darrel L. Good and Scott H. Irwin Understanding USDA Corn and Soybean Production Forecasts:

More information

Valuation of Agricultural Weather Information Networks

Valuation of Agricultural Weather Information Networks Valuation of Agricultural Weather Information Networks Mohammed Al Hassan Jeffrey D. Mullen Gerrit Hoogenboom University of Georgia Contact Information: Jeffrey D. Mullen, jmullen@uga.edu, Phone: (706)

More information

VALIDATING A SURVEY ESTIMATE - A COMPARISON OF THE GUYANA RURAL FARM HOUSEHOLD SURVEY AND INDEPENDENT RICE DATA

VALIDATING A SURVEY ESTIMATE - A COMPARISON OF THE GUYANA RURAL FARM HOUSEHOLD SURVEY AND INDEPENDENT RICE DATA VALIDATING A SURVEY ESTIMATE - A COMPARISON OF THE GUYANA RURAL FARM HOUSEHOLD SURVEY AND INDEPENDENT RICE DATA David J. Megill, U.S. Bureau of the Census I. Background While attempting to validate survey

More information

ECON4515 Finance theory 1 Diderik Lund, 5 May Perold: The CAPM

ECON4515 Finance theory 1 Diderik Lund, 5 May Perold: The CAPM Perold: The CAPM Perold starts with a historical background, the development of portfolio theory and the CAPM. Points out that until 1950 there was no theory to describe the equilibrium determination of

More information

Economic, Productive & Financial Performance Of Alberta Cow/Calf Operations

Economic, Productive & Financial Performance Of Alberta Cow/Calf Operations Benchmarks for Cattlemen Economics & Competitiveness Economic, Productive & Financial Performance Of Cow/Calf Operations Moist Mixed land Production Year - 1999 Nov-03 Foreword This AgriProfit$ & Returns

More information

The Effect of the No-Burn Ban on the Economic Viability of Producing Bluegrass Seed in Select Areas of Washington State

The Effect of the No-Burn Ban on the Economic Viability of Producing Bluegrass Seed in Select Areas of Washington State Farm Business Management Reports EB1922E The Effect of the No-Burn Ban on the Economic Viability of Producing Bluegrass Seed in Select Areas of Washington State Herbert R. Hinman Alan Schreiber Online

More information

Cotton Variety Guide 2016

Cotton Variety Guide 2016 Cotton Variety Guide 2016 W 285 UT Cotton Agronomy University of Tennessee TN Cotton Variety Guide 2016 Tyson B. Raper, Cotton and Small Grains Specialist Contributing Authors Ryan H. Blair Fred Allen

More information

Crop / Weather Update

Crop / Weather Update Crop / Weather Update Corn Crop Condition Percent of Acreage Rated Good or Excellent 85 80 75 70 65 60 55 50 45 Corn condition this week is the same as last week in the good/excellent category, which is

More information

University of California at Berkeley TRUNbTAM THONG TIN.THirVlEN

University of California at Berkeley TRUNbTAM THONG TIN.THirVlEN DECISION MAKING AND FORECASTING With Emphasis on Model Building and Policy Analysis Kneale T. Marshall U.S. Naval Postgraduate School Robert M. Oliver )A1 HOC OUOC GIA HA NO! University of California at

More information

THE CHOICE BETWEEN MULTIPLICATIVE AND ADDITIVE OUTPUT UNCERTAINTY

THE CHOICE BETWEEN MULTIPLICATIVE AND ADDITIVE OUTPUT UNCERTAINTY THE CHOICE BETWEEN MULTIPLICATIVE AND ADDITIVE OUTPUT UNCERTAINTY Moawia Alghalith University of St. Andrews and Ardeshir J. Dalal Northern Illinois University Abstract When modeling output uncertainty,

More information

Economics 200A part 2 UCSD Fall quarter 2011 Prof. R. Starr Mr. Troy Kravitz1 FINAL EXAMINATION SUGGESTED ANSWERS

Economics 200A part 2 UCSD Fall quarter 2011 Prof. R. Starr Mr. Troy Kravitz1 FINAL EXAMINATION SUGGESTED ANSWERS Economics 200A part 2 UCSD Fall quarter 2011 Prof. R. Starr Mr. Troy Kravitz1 FINAL EXAMINATION SUGGESTED ANSWERS This exam is take-home, open-book, open-notes. You may consult any published source (cite

More information

PPT Slide. Slide 1 of 32. Notes:

PPT Slide. Slide 1 of 32. Notes: Slide 1 of 32 This presentaion will describe the background of establishing an agricultural district in Westchester County and how GIS was used to map the district. file:///volumes/web/www/ce/conferences/gis%20present/testfarm/sld001.htm[4/6/11

More information

Paul Patterson and Steven Hines Background and Assumptions

Paul Patterson and Steven Hines Background and Assumptions 2015 Costs and Returns Estimate Southcentral Idaho: Magic Valley Commercial Dry Beans Paul Patterson and Steven Hines Background and Assumptions Magic Valley The University of Idaho s costs and returns

More information

Weather Derivatives. AgBiz Insurance Workshop 08 October Raphael N. Karuaihe, PhD

Weather Derivatives. AgBiz Insurance Workshop 08 October Raphael N. Karuaihe, PhD Weather Derivatives AgBiz Insurance Workshop 08 October 2015 Raphael N. Karuaihe, PhD Need for Weather Derivatives Weather conditions tend to affect volume and usage more than they directly affect the

More information

A Model with Collateral Constraints

A Model with Collateral Constraints A Model with Collateral Constraints Jesús Fernández-Villaverde University of Pennsylvania December 2, 2012 Jesús Fernández-Villaverde (PENN) Collateral Constraints December 2, 2012 1 / 47 Motivation Kiyotaki

More information

Analyzing the Impacts of Biofuel Mandates on World-Wide Grain, Livestock, and Oilseed Sectors

Analyzing the Impacts of Biofuel Mandates on World-Wide Grain, Livestock, and Oilseed Sectors Analyzing the Impacts of Biofuel Mandates on World-Wide Grain, Livestock, and Oilseed Sectors Richard Stillman, Jim Hansen, Ralph Seeley, Dave Kelch, Agapi Somwaru, and Edwin Young United States Department

More information

Minnesota K-12 Academic Standards in Social Studies. Grade 4: Geography of North America

Minnesota K-12 Academic Standards in Social Studies. Grade 4: Geography of North America Minnesota K-12 Academic s in Social Studies Grade 4: Geography of North America 4 Describe how people take 1. Democratic government action to influence a depends on informed and decision on a specific

More information

Geographical Diversification in Agriculture. An Applied Case to Western U.S. Wheat Growers

Geographical Diversification in Agriculture. An Applied Case to Western U.S. Wheat Growers Geographical Diversification in Agriculture An Applied Case to Western U.S. Wheat Growers Ryan Larsen Department of Agricultural Economics Texas A&M University 2124 TAMU College Station, TX 77843-2124

More information

Background and Assumptions

Background and Assumptions 2013 Costs and Returns Estimate Southwest Idaho: Treasure valley Commercial Dry Beans Kathleen Painter Background and Assumptions Southwestern Idaho The University of Idaho s costs and returns estimates

More information

Impact on Agriculture

Impact on Agriculture Weather Variability and the Impact on Agriculture InfoAg 2017 Copyright 2017, awhere. All Rights Reserved The Problem: The Earth s Atmosphere is a Heat Engine In transition 1 C warming of atmosphere Triples

More information

Economic Impacts of Agriculture and Forestry in Tennessee, 2009

Economic Impacts of Agriculture and Forestry in Tennessee, 2009 Institute of Agriculture Department of Agricultural & Resource Economics Economic Impacts of Agriculture and Forestry in Tennessee, 2009 by Jamey Menard, Burton English, and Kim Jensen Agri Industry Modeling

More information

MICROCOMPUTER CROP COST AND RETURN GENERATOR

MICROCOMPUTER CROP COST AND RETURN GENERATOR MICROCOMPUTER CROP AND RETURN GENERATOR BUDGET AREA... VALENCIA AND SOUTHERN BERNALILLO COUNT FARM SIZE.... 30.00 ACRES IRRIGATION TYPE FLOOD NUMBER OF CROPS 5 VERSION 1.0 COPYRIGHT (C) 1984 by NEW MEXICO

More information

Crop Progress. Corn Mature Selected States [These 18 States planted 92% of the 2017 corn acreage]

Crop Progress. Corn Mature Selected States [These 18 States planted 92% of the 2017 corn acreage] Crop Progress ISSN: 00 Released October, 0, by the National Agricultural Statistics Service (NASS), Agricultural Statistics Board, United s Department of Agriculture (USDA). Corn Mature Selected s [These

More information

Climate Change Impact on Air Temperature, Daily Temperature Range, Growing Degree Days, and Spring and Fall Frost Dates In Nebraska

Climate Change Impact on Air Temperature, Daily Temperature Range, Growing Degree Days, and Spring and Fall Frost Dates In Nebraska EXTENSION Know how. Know now. Climate Change Impact on Air Temperature, Daily Temperature Range, Growing Degree Days, and Spring and Fall Frost Dates In Nebraska EC715 Kari E. Skaggs, Research Associate

More information

Decision Theory Final Exam Last name I term: (09:50) Instructor: M. Lewandowski, PhD

Decision Theory Final Exam Last name I term: (09:50) Instructor: M. Lewandowski, PhD Problem 1 [10p] Consider the probability density functions of the following six lotteries l1 l6: PDF l 1 l 2 l 3 l 4 l 5 l 6 2,00 0,00 0,10 0,00 0,50 0,50 0,00 0,00 0,50 0,00 0,50 0,00 0,00 0,90 3,00 0,00

More information

Weather and Climate Risks and Effects on Agriculture

Weather and Climate Risks and Effects on Agriculture Weather and Climate Risks and Effects on Agriculture Dr. Eric Snodgrass Official Journal of the Fluid Fertilizer Foundation Vol. 26, No. 2, Issue #100 DOWNLOAD Summary: So, what do we need to watch for?

More information

ELECTRICITY GENERATION CHOICES: COMBINED CYCLE GAS AND WIND IN PORTUGAL

ELECTRICITY GENERATION CHOICES: COMBINED CYCLE GAS AND WIND IN PORTUGAL ELECTRICITY GENERATION CHOICES: COMBINED CYCLE GAS AND WIND IN PORTUGAL APPLICATION PORTFOLIO November 2006 6 December 2006 Page 1 of 33 (intentionally blank) 6 December 2006 Page 2 of 33 EXECUTIVE SUMMARY

More information

Evolving 2014 Weather Patterns. Leon F. Osborne Chester Fritz Distinguished Professor of Atmospheric Sciences University of North Dakota

Evolving 2014 Weather Patterns. Leon F. Osborne Chester Fritz Distinguished Professor of Atmospheric Sciences University of North Dakota Evolving 2014 Weather Patterns Leon F. Osborne Chester Fritz Distinguished Professor of Atmospheric Sciences University of North Dakota Northern Pulse Growers January 27, 2014 Minot, ND Outline Today s

More information

U.S. CORN AND SOYBEAN YIELDS AND YIELD FORECASTING

U.S. CORN AND SOYBEAN YIELDS AND YIELD FORECASTING U.S. CORN AND SOYBEAN YIELDS AND YIELD FORECASTING A White Paper by Darrel Good, Scott Irwin, and Mike Tannura January 2011 Why Is It Important to Forecast U.S. Corn and Soybean Yields? The price level

More information

March 19th, By Jack Scoville

March 19th, By Jack Scoville March 19th, 2018 By Jack Scoville Wheat: Wheat markets were lower on Friday as forecasts for beneficial rains in the western Great Plains, mostly in Kansas for the first part of this week were maintained.

More information

Paul Patterson Background and Assumptions

Paul Patterson Background and Assumptions 2015 Costs and Returns Estimate Southcentral Idaho: Magic Valley Corn Silage: Grown Using Genetically Modified Seed Paul Patterson Background and Assumptions Magic Valley The University of Idaho s costs

More information

World Meteorological Organization

World Meteorological Organization World Meteorological Organization Opportunities and Challenges for Development of Weather-based Insurance and Derivatives Markets in Developing Countries By Maryam Golnaraghi, Ph.D. Head of WMO Disaster

More information

The World Bank. Key Dates. Project Development Objectives. Components. Overall Ratings. Public Disclosure Authorized

The World Bank. Key Dates. Project Development Objectives. Components. Overall Ratings. Public Disclosure Authorized Public Disclosure Authorized AFRICA Mali Agriculture and Rural Development Global Practice IBRD/IDA Specific Investment Loan FY 2006 Seq No: 21 ARCHIVED on 13-Jan-2015 ISR17735 Implementing Agencies: Public

More information

Eastern Idaho. Paul E. Patterson and Juliet M. Marshall Background and Assumptions

Eastern Idaho. Paul E. Patterson and Juliet M. Marshall Background and Assumptions 2015 Costs and Returns Estimate Eastern Idaho: Soft White Spring Wheat Paul E. Patterson and Juliet M. Marshall Background and Assumptions Eastern Idaho The University of Idaho s costs and returns estimates

More information

Weather Risk Management

Weather Risk Management Weather Risk Management David Molyneux, FCAS Introduction Weather Risk - Revenue or profits that are sensitive to weather conditions Weather Derivatives - Financial Products that allow companies to manage

More information

Anoka Hennepin K 12 Curriculum Unit Plan

Anoka Hennepin K 12 Curriculum Unit Plan Anoka Hennepin K 12 Curriculum Unit Plan Department: Social Studies Grade Level: 4 Unit Title: Geographic Investigations Trimester: 2 and 3 (16) 55 minute lessons (can be (32) 25 minute lessons) Unit Summary:

More information

Economic, Productive & Financial Performance Of Alberta Cow/Calf Operations

Economic, Productive & Financial Performance Of Alberta Cow/Calf Operations Benchmarks for Alberta Cattlemen Economics & Competitiveness Economic, Productive & Financial Performance Of Alberta Cow/Calf Operations Comparing: Southern Alberta Total, Southern Alberta Low Cost, and

More information

Economic Impacts of Agriculture and Forestry in Tennessee, 1997

Economic Impacts of Agriculture and Forestry in Tennessee, 1997 Institute of Agriculture Department of Agricultural Economics Research Series 04-01 July 2001 Economic Impacts of Agriculture and Forestry in Tennessee, 1997 by Burton English, Kim Jensen, and Jamey Menard

More information

Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over Darrel L. Good and Scott H.

Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over Darrel L. Good and Scott H. Understanding USDA Corn and Soybean Production Forecasts: Methods, Performance and Market Impacts over 197-24 by Darrel L. Good and Scott H. Irwin Understanding USDA Corn and Soybean Production Forecasts:

More information

Partial budgets for cover crops in Midwest row crop farming

Partial budgets for cover crops in Midwest row crop farming Partial budgets for cover crops in Midwest row crop farming A. Plastina, F. Liu, W. Sawadgo, F. Miguez, and S. Carlson. Conservation Infrastructure (CI) - Cover Crops Working Group Iowa Farm Bureau Federation

More information

Linear Programming and Marginal Analysis

Linear Programming and Marginal Analysis 337 22 Linear Programming and Marginal Analysis This chapter provides a basic overview of linear programming, and discusses its relationship to the maximization and minimization techniques used for the

More information

The Agriculture Investment and Market Development Project (P143417)

The Agriculture Investment and Market Development Project (P143417) Public Disclosure Authorized AFRICA Cameroon Agriculture Global Practice IBRD/IDA Investment Project Financing FY 2015 Seq No: 10 ARCHIVED on 21-Dec-2018 ISR35368 Implementing Agencies: THE REPUBLIC OF

More information

Background and Assumptions

Background and Assumptions EBB4-SU-17 2017 Costs and Returns Estimate Eastern Idaho: Bingham and Power Counties Sugarbeets Ben Eborn Eastern Idaho Background and Assumptions The University of Idaho s costs and returns estimates

More information

Allianz Risk Transfer. Weather Solutions

Allianz Risk Transfer. Weather Solutions Allianz Risk Transfer Weather Solutions Allianz Risk Transfer (ART) structures custom weather risk management solutions that lower financial volatility and create value. Sales were down by 30 percent

More information

Stochastic Programming Models in Design OUTLINE

Stochastic Programming Models in Design OUTLINE Stochastic Programming Models in Design John R. Birge University of Michigan OUTLINE Models General - Farming Structural design Design portfolio General Approximations Solutions Revisions Decision: European

More information

J2.4 SKILLFUL SEASONAL DEGREE-DAY FORECASTS AND THEIR UTILITY IN THE WEATHER DERIVATIVES MARKET

J2.4 SKILLFUL SEASONAL DEGREE-DAY FORECASTS AND THEIR UTILITY IN THE WEATHER DERIVATIVES MARKET J2.4 SKILLFUL SEASONAL DEGREE-DAY FORECASTS AND THEIR UTILITY IN THE WEATHER DERIVATIVES MARKET Jeffrey A. Shorter, Todd M. Crawford, Robert J. Boucher, James P. Burbridge WSI Corporation, Billerica, MA

More information

ONLINE ONLY APPENDIX. Endogenous matching approach

ONLINE ONLY APPENDIX. Endogenous matching approach ONLINE ONLY APPENDIX Endogenous matching approach In addition with the respondable risk approach, we develop in this online appendix a complementary explanation regarding the trade-off between risk and

More information

Predicting Impacts and Communicating Forecast Uncertainty in the Case of Drought

Predicting Impacts and Communicating Forecast Uncertainty in the Case of Drought Predicting Impacts and Communicating Forecast Uncertainty in the Case of Drought Dr. Cody L. Knutson National Drought Mitigation Center University of Nebraska-Lincoln, USA Predicting Drought Impacts through

More information

K- 5 Academic Standards in. Social Studies. June 2013

K- 5 Academic Standards in. Social Studies. June 2013 K- 5 Academic s in Social Studies June 2013 Word Tables of s ONLY This Word version of the 2.17.12 social studies standards (DRAFT for Rulemaking 2.17.12) document contains the standards ONLY; no explanatory

More information

UNIT-4 Chapter6 Linear Programming

UNIT-4 Chapter6 Linear Programming UNIT-4 Chapter6 Linear Programming Linear Programming 6.1 Introduction Operations Research is a scientific approach to problem solving for executive management. It came into existence in England during

More information

End-User Gains from Input Characteristics Improvement

End-User Gains from Input Characteristics Improvement End-User Gains from Input Characteristics Improvement David K. Lambert William W. Wilson* Paper presented at the Western Agricultural Economics Association Annual Meetings, Vancouver, British Columbia,

More information

Designer policy for carbon and biodiversity co-benefits under global change

Designer policy for carbon and biodiversity co-benefits under global change SUPPLEMENTARY INFORMATION DOI: 10.1038/NCLIMATE2874 Designer policy for carbon and biodiversity co-benefits under global change Bryan et al. Nature Climate Change Supplementary Information Supplementary

More information

Severe Winter Weather in

Severe Winter Weather in Transactions of the Illinois State Academy of Science received 4/19/10 (2010), Volume 103, #3&4, pp. 131-140 accepted 9/6/10 Severe Winter Weather in 2009-2010 Stanley A. Changnon Changnon Climatologist,

More information