The Development of Index Futures Contracts for Fresh Fruits and Vegetables
Abstract: The fruit and vegetable industry does not have a risk management instrument or a well-structured price discovery system, such as commodity futures contracts, to aid in the marketing and management of its price risk. Since the 1980s, financial futures contracts based on indexes of stocks, commodities and currencies have been used to hedge these groups of assets. The purpose of this study was to apply the concept of index futures contracts to the produce industry by developing indexes based on prices of fruits and vegetables and to determine the hedging effectiveness of potential futures contracts written on these indexes. Twenty representative fruits and vegetables were chosen to compile indexes for fruits, for vegetables, and for fruits and vegetables together using a trade-weighted arithmetic average of 1989 to 1992 wholesale prices of selected commodities traded on the Dallas Wholesale Fruits and Vegetable market. The indexes were then tested by simulating a short and long hedge of a portfolio of commodities and by cross hedging selected individual New Mexico and California produce commodities with the indexes.
Key Words and Phrases: Fruits, vegetables, futures markets, index futures contracts.
Abstract: This paper investigates the effect of technological change on the demand for, and supply of, hired farm workers in the United States for the period 1950 to 1992. Particular attention is given to the proxy for technological change. We have used total expenditures, both by public and private sectors, for research and development in the field of agriculture. We find that technology has a negative impact on the hired labor demand after the second and third year of initial investment. Our results show that technology is labor saving. The demand and supply elasticities were found to differ from other studies. We also derive elasticities of adjustment and draw some policy conclusions. The paper also presents a dynamic-in-period simulation of the estimated model.
Key Words and Phrases: Elasticity, hired workers, technological change, total expenditures.
Abstract: This study explores the perceptions and practices of limited resource farmers in South Central Alabama regarding farm product marketing, The objectives are to identify the demographic characteristics of' the farmers, assess their marketing characteristics and identify their marketing problems and marketing assitlance needs. A two-page questionnaire was used to collect dala from a random sample of 144 limited resource farmers using face-to-face interviewing procedures in spring to fall, 1996. The findings revealed most of the farmers believed they were not experiencing any marketing problems. Those that did believe they were experiencing marketng problems listed higher prices as their greatest concern. A majority (68 %) earned $10, 000 or less annually. The investigators concluded that an increase in sales volume, and locating or developing higher-value markets could increase income and consequently enhance profitabilily of production. Further studies are suggested to look closely at other issues related to marketing, such as enterprise budgeting to discern profitable cropping alternatives for limited resource farmers.
Key Words and Phrases: Farm marketing, limited resource farmers, marketing.
Abstract: The twin problems of moral hazard and adverse selection are often blamed for the lack of insurance for many fruits and vegetables. This paper develops an alternative method of testing for adverse selection that uses a two-stage approach to determine the effects of technical inefficiency on the demand for insurance. With this approach, technical inefficiency is interpreted as an indicator of adverse selection. Because there is no active insurance market for many specialty crops, and thin markets for those that are insurable, a contingent valuation approach is used to obtain the data necessary to estimate the demand for three different types of insurance. The results suggest adverse selection may be a deterrent to the viability of extending the breadth of specialty crop insurance products.
Key Words and Phrases: Adverse selection, contingent valuation, crop insurance, fruits and vegetables, moral hazard, risk, uncertainty.
Abstract: The Foreign Agricultural Service of the U.S. Department of Agriculture (USDA) has been criticized because it appears to favor allocation of Market Promotion Program (MPP) funds to large firms. Because of competition for markets, the USDA has been admonished to devote more attention to export promotion, especially to small firms at the state level. This paper determines that North Carolina providers of export promotion services must place greater emphasis on disseminating information and providing technical assistance to change attitudes toward exporting and export promotion. Also, while high export sales, per se, are not a good indicator for the use of export promotion programs, positive opinions about export promotion and a firm's growth are good predictors for use of export promotion programs.
Key Words and Phrases: Export promotion, export dependence, high-value products, market promotion program, prediction success, usefulness score.
Abstract: Emu and ostrich meats were compared with beef to identify and quantify their sensory attributes. A sensory panel was used to compare U.S. Department of Agriculture Choice top sirloin beef with emu and ostrich meat, both ground and intact form. Comparisons of sensory quality and acceptability were made after zero, two, four and six months of frozen storage. Differences in flavor, juiciness and texture were detected between ratile meals and beef (the control). The differences were more pronounced for intact cuts than ground meat, with ratile meat usually being rated inferior to beef. Some differences in sensory acceptability across the six-month storage period were revealed. Implications for marketing the ratite meats are made based upon the studv.
Key Words and Phrases: Acceptability, difference from control, emu, ostrich, sensory quality, storage