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Abstract
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.