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The purpose of this research report is to present an evaluation of advisory service pricing performance in the 1999 crop year for wheat. Specifically, the average price received by a subscriber to an advisory service is calculated for wheat crop harvested in 1999. The average net advisory price across all 23 wheat programs in 1999 is $2.64 per bushel, $0.04 below the market benchmark price. The range of net advisory prices is substantial, with a minimum of $2.18 per bushel and a maximum of $3.38 per bushel. The average revenue achieved by following an advisory service is $163 per acre, $3.00 less than the market benchmark revenue. The spread in advisory revenue also is noteworthy, with the difference between the bottom- and top-performing advisory programs reaching almost $75 per acre. An advisory program's net price or revenue received is an important indicator of performance. The tradeoff between pricing performance and risk also is likely to be of interest to producers. Contrary to the prediction of economic theory, a slight negative tradeoff between average net advisory price and risk is found. That is, producing higher net prices generally required that an advisory program over 1995-1999 take on less risk, and vice versa. Since the estimated correlation between price and risk is only ~0.18, this counter-intuitive result is likely due to random variation and is not expected to persist over a longer sample. Only one advisory program in wheat outperforms the market benchmark when both price and risk are considered, while many have a lower price and higher risk. No program outperforms the benchmark based on average revenue and risk. It is important to emphasize that the pricing and risk performance results are based on five observations. This is a relatively small sample for estimating the true risks of market advisory programs. Hence, the return-risk results should be viewed as exploratory rather than definitive.


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