Table 1. Percentage Distribution of Demographic Characteristics of Survey Respondents Relative to

Similar Characteristics of the Population of US Farmers from the 1997 Census of Agriculture.

 

Total acres (owned and rented)

 

Gross annual farm sales

 

 

Survey

Census

Less than 499

1

81

500 to 999

5

9

1,000 to 1,999

44

5

Over 2,000

49

5

Average Acres:

 

1,929

 

487

 

Survey

Census

Less than $50,000

0

74

$50,000 to $99,999

1

8

$100,000 to $499,999

55

15

$500,000 to $999,999

26

2

Over $1,000,000

17

1

Average

Dollars:

 

550,275

 

102,970

Age

 

US regions

 

 

Survey

Census

Under 25

1

1

25 to 34

17

7

35 to 44

40

19

45 to 49

18

12

50 to 59

20

24

60 to 64

4

11

65 and older

2

26

Average Age:

44

54

 

Survey

 

Midwest

52

 

Great Plains

30

 

Southeast

18

 

 

 


Table 2. Percentage Distribution of Production Characteristics of the Survey Respondents.

 

 

Annual crop

Over 2,000 acres

1,999-1,500 acres

1,499-1,000 acres

999-500 acres

499-300 acres

Under 300 acres

No acres

Average

 

----------Percent----------

Acres

Corn

4.5

16.3

42.3

7.9

6.9

2.9

19.3

1021

Sorghum

1.1

1.5

3.0

5.1

8.3

6.6

74.5

177

Soybeans

2.9

10.9

34.2

14.4

9.9

4.6

23.1

850

Wheat

9.1

14.7

16.3

8.0

13.3

12.4

26.2

827

Cotton

2.2

3.7

4.7

1.5

0.6

0.4

87.0

193

Rice

0.4

1.3

1.8

1.1

0.8

0.1

94.6

67

Hay

5.2

3.1

5.4

7.1

14.9

21.3

42.9

404

 

 

 

 

 

 

 

 

 

Do you have any livestock in your operation?

Yes

56

No

44

 

 

 

 

 


Table 3. Percentage Distribution of Demographic Characteristics of Market Advisory Service

Users and Non-Users.

 

Total acres (owned and rented)

 

Gross annual farm sales

 

 

Non-users

Users

Less than 499

1

1

500 to 999

6

5

1,000 to 1,999

43

45

Over 2,000

50

49

Average Acres:

 

1929

 

1936

 

Non-users

Users

Less than $50,000

0

0

$50,000 to $99,999

1

1

$100,000 to $499,999

56

53

$500,000 to $999,999

27

27

Over $1,000,000

16

18

Average

Dollars:

 

551,205

 

573,765

Age

 

US regions

 

 

Non-users

Users

Under 25

1

1

25 to 34

20.

16

35 to 44

32

42

45 to 49

15

18

50 to 59

26

18

60 to 64

4

3

65 and older

3

2

Average Age:

44.4

43.4

 

Non-users

Users

Midwest

15

85

Great Plains

22

78

Southeast

20

80

 

 

 

 

 

 


Table 4.  Comparison of Risk Attitudes between Market Advisory Service Users and Non-Users.

 

Attitudes

Non-Users

Users

t-test

Sig. (2-tailed)

 

 

 

 

 

I like “playing it safe”

6.42

6.16

2.058

0.04

 

 

 

 

 

I am willing to take higher financial risks

6.34

6.68

-2.766

0.01

in order to realize higher average yields

 

 

 

 

 

 

 

 

 

I like taking big financial risks

3.32

3.67

-2.460

0.01

 

 

 

 

 

I am willing to take higher financial risks

5.48

5.93

-3.408

0.00

when selling my crops, in order to realize

 

 

 

 

higher average returns

 

 

 

 

 

 

 

 

 

I accept more risk in my farm business

4.62

4.99

-2.529

0.01

than other farmers

 

 

 

 

 

 

 

 

 

Note: Mean scores are based on a 1 to 9 scale with 1=Strongly disagree, and 9=Strongly agree, MAS stands for

 market advisory service.

 

 

 

 

Table 5.  Relevance of Various Sources of Marketing Information.

 

Source

Mean*

Source

Mean*

 

 

 

 

·        Satellite systems

8.17

·        Radio

5.73

·        USDA reports

6.92

·        University Extension service

5.46

·        Market advisory services

6.88

·        Internet

4.81

·        Local elevator

6.25

·        Television

4.23

·        Farm magazines/newsletters

5.94

 

·        Marketing clubs

4.21

 

*Based on a 1 to 9 scale with 1=do not rely on, 9=rely heavily on.

 

 


Table 6.  Producers’ Use and Evaluation of Specific Market Advisory Services.

Market Advisory Service

Ever Used

 

Familiarity

 

Marketing Style

 

Satisfaction

 

 

Percent*

Rank

Mean**

Rank

Mean***

Rank

Mean****

Rank

 

 

 

 

 

 

 

 

 

AgLine by Doane

35

3

4.22

3

4.72

10

5.75

6

AgriVisor Services Inc.

17

8

3.15

8

5.00

9

5.14

10

Brock Associates

37

2

4.87

2

6.17

1

6.24

4

Freese-Notis Weather

20

7

3.59

5

5.76

5

5.45

8

ProFarmer

69

1

6.34

1

5.80

4

6.26

3

AgResource Company

23

6

3.50

6

6.01

2

6.58

2

Allendale Inc.

26

4

3.86

4

5.97

3

5.98

5

CommStock Investments Inc.

10

9

2.61

10

5.57

7

7.07

1

Brent Harris Elliot Wave

10

10

2.64

9

5.61

6

5.29

9

Stewart-Peterson

26

5

3.21

7

5.27

8

5.67

7

Another MAS

47

 

 

 

 

 

 

 

Average

 

 

 

 

 

 

 

 

Do not use MAS at all

18

 

 

 

 

 

 

 

*Describes a percentage of all producers that have ever used a specific MAS.

**Based on a 1 to 9 scale with 1=not at all familiar, 9=very familiar.  Includes responses of all producers.

***Based on a 1 to 9 scale with 1=conservative, 9=aggressive.  Includes responses of all producers.

****Based on a 1 to 9 scale with 1=very dissatisfied, 9=very satisfied.  Includes responses of producers that have tried a particular MAS.

*****Producers who have tried a particular MAS switched MAS once every listed number of years.

MAS stands for market advisory service.

 

 


Table 7.  Heterogeneity in the Use of Market Advisory Services in Different Market Conditions.

 

 

Group A

Group B

Group C

F-test

Sig.

 

 

 

 

 

 

Midwest

35%

15%

43%

5.937

0.001

Great Plains

39%

15%

30%

 

 

Southeast

54%

16%

26%

 

 

 

 

 

 

 

 

Gross Sales

$575,150

$530,425

$624,425

4.082

0.017

 

 

 

 

 

 

Risk Attitude*

 

6.27

6.54

6.65

5.832

0.001

Tool for risk reduction

 

7.09

6.55

7.01

3.044

0.028

Tool for price enhancement

 

6.98

6.50

7.03

3.832

0.010

MAS is expensive

 

6.10

6.58

5.60

13.064

0.000

Pleased using MAS

 

6.15

5.82

6.36

6.413

0.000

MAS matches philosophy

6.32

5.97

6.43

3.296

0.020

 

 

 

 

 

 

Note: Group A exhibits a downward-sloping, Group B an upward-sloping, and Group C a flat use of MAS, relative to crop prices. 

MAS stands for market advisory services  Mean scores are based on a 1to 9 scale with 1=Strongly disagree, 9=Strongly agree.

 Risk attitude is a sum of the mean scores to questions two through five listed in Table 4.


Table 8. Nature of Market Advisory Service Use.

 


Extent used for:

 

Mean*

 

Mean*

·        Marketing information (facts)

6.95

·        To reduce fluctuations in prices

6.00

·        Market analysis

6.88

·        Make specific pricing decisions

5.97

·        Keeping up with markets

6.47

·        Forecasting prices

5.95

·        To receive a higher than average price

6.47

·        Expert opinion

5.77

·        General market strategies

6.45

·        Govt. program information

5.34

·        To reduce price risk

6.34

·        To beat the market

5.30

·        To reduce income risk

6.32

·        Weather forecasts

5.21

·        Price information

6.17

·         

 

 

Do you use the specific pricing recommendations that the market advisory services provide as background information?

Yes

56.5 %

No

43.5 %

 

Do you use the specific pricing recommendations that the market advisory services provide to compare them with other information sources?

Yes

51.2 %

No

48.8 %

 

Do you follow the specific pricing recommendations that the market advisory services provide loosely

Yes

65.6 %

No

34.4 %

 

Do you follow the specific pricing recommendations that the market advisory services provide closely?

Yes

11.0 %

No

89.0 %

*Based on a 1 to 9 scale with 1=never use, 9=use extremely often.

 


Table 9.  Extent of Impact and Implementation of Pricing Recommendations of Market Advisory Services.

 

 

 

Mean*

 

Mean*

 

 

 

 

 

All

 

Close

 

Means

Sig.

 

 

Users

Rank

Followers

Rank

t-test

(2-tailed)

 

 

 

 

 

 

 

 

Impact

 

5.88

 

 

8.01

 

 

17.93

 

0.00

 

Implementation

--------------Pre-Harvest----------

 

Cash forward contracts

5.90

2

7.34

2

7.90

0.00

 

Sell futures

4.89

5

6.91

3

7.87

0.00

 

Buy put options

4.88

6

6.59

6

6.43

0.00

 

Buy call options

4.89

5

6.68

5

6.84

0.00

 

Buy futures

4.53

9

6.50

7

6.94

0.00

 

     

-------------Post-Harvest----------

 

Sell in cash market

6.50

1

7.60

1

6.61

0.00

 

Sell futures

4.92

4

6.84

4

7.47

0.00

 

Buy put options

4.75

7

6.42

9

6.04

0.00

 

Buy call options

4.95

3

6.68

5

6.41

0.00

 

Buy futures

4.64

8

6.49

8

6.48

0.00

 

 

 

 

 

 

 

 

*Based on a 1 to 9 scale with 1=no impact at all, 9=great impact for “Impact”, and 1=would not implement at all, 9=implement exactly for “Implementation.”


Table 10.  Valuation of Specific Aspects of Marketing Advisory Services.

 

Process

Mean*

Method

Mean*

Tools

Mean*

 

Daily updates of recommendations

 

6.52

 

Use of fundamental analysis

6.36

 

Recommendations include futures and options

5.98

Consistent recommendations

 

6.35

Specialist regarding particular crops

6.15

Recommendations use only cash

4.94

Recommendations focused on your farm operation circumstances

 

6.05

Use of technical analysis

6.03

High frequency of use of futures and options strategies

4.82

The fact that the market advisory service tries to establish a relationship

 

5.83

Analysis based on group consensus

5.76

Low frequency of use of futures and options

4.78

Presentation mainly with text

 

5.18

Analysis based on the knowledge of one person

4.32

 

 

Presentation mainly with charts

 

4.98

 

 

 

 

Market advisory service is also broker

 

4.04

 

 

 

 

*Based on a 1 to 9 scale with 1=do not value at all, 9=value extremely.


Table 11.  Percentage of Farmers Using Selected Forward-Pricing Techniques: Current Survey Versus Previous Studies.

 

 

 

 

 

 

Futures

Options

Cash Forw.

Min. Price

Hedge-to-arrive

Study

Location

Year

N

 

Hedging

Contracts

Contracts

Contracts

Contracts

 

 

 

 

 

Pre-Harvest

Present study

Midwest,

2000

232

Non-Users

21

17

63

9

13

 

Great Plains

 

1053

Users

40

33

77

9

19

 

Southeast

 

117

Close Followers

53

48

83

13

26

 

 

 

 

 

 

 

 

 

 

Coble et al.

IN, MS, NE, TX

1999

1806

 

35

35

n/a

71

n/a

 

 

 

 

 

 

 

 

 

 

Purdue Top

Indiana

2001

39

 

62

54

82

13

n/a

Farmer

 

 

 

 

 

 

 

 

 

Participants

 

1996

26

 

62

35

77

15

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schroeder

Kansas

1996

55

 

45

56

64

n/a

n/a

et al.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Post-Harvest

Present study

Midwest,

2000

232

Non-Users

18

16

37

7

7

 

Great Plains

 

1053

Users

28

23

53

8

11

 

Southeast

 

117

Close Followers

40

35

54

7

11

 

 

 

 

 

 

 

 

 

 

Coble et al.

IN, MS, NE, TX

1999

1806

 

34

n/a

70

n/a

 

 

 

 

 

 

 

 

 

 

 


Table 12.  Percent Distribution of Marketing Frequency for Selected Crops between Non-users, Users,

and Close Followers of Market Advisory Services Relative to Previous Studies.

 

 

 

Once

2-5 times

6-10 times

11 or more

Average

 

 

Percent

Times

Corn

 

 

 

 

 

 

Present study

 

 

 

 

 

 

Non-Users

5.6

52.8

27.3

14.3

6.2

 

Users

6.2

51.2

31.6

11.1

6.0

 

Close Followers

3.2

55.8

32.6

8.4

5.5

Coble et al

 

 

 

 

5.7

Goodwin and Kastens

 

 

 

 

4.0

 

 

 

 

 

 

Soybeans

 

 

 

 

 

Present study

 

 

 

 

 

 

Non-Users

8.8

58.8

23.1

9.4

4.0

 

Users

5.9

60.6

27.0

6.5

5.0

 

Close Followers

3.1

64.6

25.0

7.3

4.8

Coble et al

 

 

 

 

4.4

Goodwin and Kastens

 

 

 

 

3.1

 

 

 

 

 

 

Wheat

 

 

 

 

 

Present study

 

 

 

 

 

 

Non-Users

23.3

57.4

14.0

5.4

3.4

 

Users

19.3

63.1

13.8

3.8

3.7

 

Close Followers

22.7

65.2

9.1

3.0

3.4

Goodwin and Kastens

 

 

 

 

3.8

 

 

 

 

 

 

 

Cotton

 

 

 

 

 

Present study

 

 

 

 

 

 

Non-Users

44.4

51.9

3.7

0.0

2.6

 

Users

21.8

64.4

12.6

1.1

3.5

 

Close Followers

n/a

n/a

n/a

n/a

n/a

Coble et al

 

 

 

 

2.5

 

 

 

 

 

 

 

 

Text Box: Maximum
Text Box: Average
Text Box: Minimum