The article investigates the existence of market externalities due to increasing returns to marketing. Panel data on 198 pairs of maize markets in Zambia and correlated random effects linear and tobit estimators were used to model the relationship between market externalities and...

Regional integration through trade is recognized as one way to foster economic growth and poverty reduction. This paper uses the gravity model and 11-year panel data (1996-2006) on Southern African Development Community (SADC) member countries to study Zambia’s regional agricultural trade...

Ramped calibration strips have been suggested as a way for grain producers to determine nitrogen needs more accurately. The strips use incrementally increasing levels of nitrogen and enable producers to conduct an experiment in each field to determine nitrogen needs. This study determines...

Years of research have been dedicated to determining the best time for producers to sell their commodities. Researchers have developed basis models, market efficiency tests, hedging/risk models, price forecasting models, and many other models in an attempt to help producers. There is a vast...

The inaccuracy of the Black-Scholes formula arises from two aspects: the formula is for European options while most real option contracts are American; the formula is based on the assumption that underlying asset prices follow a lognormal distribution while in the real world asset prices cannot...

Some extension economists and others often recommend profit margin hedging in choosing thetiming of crop sales. This paper determines producer’s utility function and price processeswhere profit margin hedging is optimal. Profit margin hedging is shown to be an optimalstrategy under a highly...

This study compares liquidity costs of electronic and open-outcry wheat futures contractstraded side-by-side on the Kansas City Board of Trade. Liquidity costs are considerablylower in the electronic market. Liquidity costs in the electronic market are still considerablylower after eliminating...

Both market advisors and researchers have often suggested multiyear rollover hedging as a way to increase producer returns. This study determines whether rollover hedging can increase expected returns for producers. For rollover hedging to increase expected returns, futures prices must follow a...

Double-cropping of soybeans and wheat is often promoted by extension personnel. This paper seeks to explain how the decision to adopt double-cropping is made, using a Tobit regression model. Tobit makes use of more of the information in the data set than do logit or probit and explains not only...

The major finding is that liquidity costs in futures options market are two to three times higher thanliquidity costs in the futures market. Liquidity cost is one potential factor to consider when choosingbetween hedging with a futures contract or with an option contract. While there is...