Are USDA reports still news to changing crop markets?

This study investigates whether major USDA reports still provide important news to changing crop markets. The news component of each report, or market “surprise,” is measured as a difference between the USDA estimate and its private expectation in corn, soybeans, and wheat markets. Changes in the relevance of USDA information are assessed by examining changes in the magnitude of market surprises and shifts in the futures price reaction to these surprises, which isolates the impact of each report. The stable size of market surprises over time suggests that competition from alternative data sources has not reduced the news component of USDA crop reports. Increasing price reaction to most reports, including those facing competition from alternative information sources, suggests that value of public information may be enhanced in uncertain markets affected by structural changes.     

Pre-Harvest Price Expectations for Corn: The Information Content of USDA Reports and New Crop Futures

This article examines the puzzle of why futures prices continue to react to USDA crop reports despite the fact that reports appear to be no longer "newsworthy," that is, provide no better production estimates than private forecasts. The information value of reports is measured in terms of their influence on rational agents' harvest-time corn price expectations, which are uncovered using a Hamilton-type modeling approach. Results show that reports are still "newsworthy," as they would contribute to agents' price expectations if released a day early. Thus futures price reactions, which closely reflect price expectations, are rational and consistent with efficient markets hypothesis.     

USDA Certification of Food as Organic: An Investigation of Consumer Beliefs about the Health Benefits of Organic Food

Back in 2002, the United States Department of Agriculture (USDA) implemented the final national standards and began certifying foods as having met the criterion in the production, handling, and processing of organically grown agricultural products. Consumers began seeing the USDA seal displayed as well as, the word “certified” and various levels of organic content on the front display panel of the product. The USDA stresses that the organic standard and label requirements do not imply organic foods are healthier. This research analyzes possible implications of consumers incorrectly inferring that food products with the USDA-organic certification label are healthier than food products without that certification.     

Intraday market effects in electronic soybean futures market during non-trading and trading hour announcements

This article investigates market reactions to major United States Department of Agriculture announcements during non-trading and trading hours in the soybean futures market using microstructure data. Following report release, volume increases and remains elevated for up to 15 to 20 minutes. The volume spikes for the non-trading releases relative to the trading releases, but are identical after the first reaction. Report releases during non-trading hours cause a large spike in volatility at the onset of trading which subsides quickly. In contrast, releases during trading hours result in a smaller volatility spike, which extends for 5–6 min at a higher magnitude. Adjusting volatility by normal trading volatility indicates that volatility in trading hour release is higher in both immediate response and persistence. Return correlations provide little evidence to support systematic under- or overreaction in prices regardless of when the report is released reflecting the efficiency of the market.     

The reluctant regulator: The Rural Utilities Service and American broadband policy

Drawing on the increasing body of literature on policy stakeholders and the ever-growing acknowledgement that communication policy is crafted by more than just parliamentarians and formal communication regulators this paper examines the role that another set of regulators plays in communication policy: agriculture regulators. Based on a study of the United States Department of Agriculture's Rural Utilities Service (RUS), this paper explores alternative agents of communication policy. More specifically, through document analysis we examine the way in which the Rural Utilities Service has shaped rural broadband policy in the United States over the last three decades. The implications for this research are wide, as it brings another policy actor into the policy making melee, and pushes communication policy scholars to consider the role that non-traditional communication regulators play in the communication policy making process.     

The impact of public and semi-public information on cotton futures market

This study estimated the impact of all major public and semi-public reports on the cotton futures market from 1995 through 2012. The estimation was based on the event study approach with the events measured by the release of five major reports: Export Sales, Crop Progress, World Agricultural Supply and Demand Estimates (WASDE) and Prospective Plantings (public reports from US Department of Agriculture) and Cotton This Month (semi-public report from International Cotton Advisory Committee). The best-fitting IGARCH(1,1)-t model that accounted for the day-of-week, seasonality and stock levels was used to measure the report effects on daily nearby cotton close-to-close futures returns. Prospective Plantings and WASDE reports appeared to be the most important sources of information in the cotton markets moving the conditional standard deviation of returns by an average of 14.4 and 9.6 percentage points, respectively. However, significant market reaction was not found for the other three reports. Our analysis revealed that, in the presence of clustering, ignoring the impact of other reports would have resulted in about 18% overestimation of WASDE impact.     

Natural Resource Agencies and Their Motivations to Partner: The Public Lands Partnership Model

Public land management agencies, such as the USDA Forest Service (USFS), utilize partnerships to accomplish a variety of tasks and meet specific targets. However, public agency personnel invest considerable time and energy to develop and maintain partnerships. Research on partnering motivations typically focuses on volunteers, nonprofit organizations and corporations, leaving the motivations of public agency personnel relatively unknown. This paper presents findings from a multiple partnership case study design on six national forests. The Public Lands Partnership Model (PLPM) is presented as a conceptualization of 13 motivations, classified into 3 distinct motivation types (i.e., interpersonal, intrapersonal, and institutional), that influence the propensity of agency personnel to partner. Additional influences, such as national forests’ external environment and internal commitment, need further exploration to confirm the PLPM and generalize results to the USFS and other agencies engaged in public land management partnerships.     

Retail price responses to changes in wholesale prices in the US beef industry: differences among quality grades and primal cuts

This study examines the transmission of wholesale prices to retail prices for differentiated beef products. Specifically, we study vertical price movement for products differentiated by quality grades and primal cuts in the US beef industry. Our study considers two quality grades– United States Department of Agriculture (USDA) Choice and USDA Select, and three primal cuts– chuck, round and sirloin. Using threshold-based autoregressive and error correction models, and non-linear impulse response functions, we explore if characteristics of price adjustment differ by quality attributes of the products. Results show that there exists the ‘rocket and feather’ effect in the adjustment of retail prices of most beef grades and cuts in response to changes in wholesale prices, and such asymmetric adjustment effect is more pronounced for higher quality grade (Choice) than lower quality grade (Select). Evidence of similar price adjustment is found from the high-quality cut (sirloin). Our results underscore the differences in price adjustment by product quality in the US beef industry.     

Changing Trends in Seafood Markets

The rapid growth of aquaculture has significantly impacted the development of global seafood markets by providing year-round supplies of consistent quality seafood products. Production of cultured salmon, however, has resulted in both a rapid increase in supplies and substantial decreases in prices for both farmed and wild product. Producers are now searching for new marketing and production strategies and debating the relative merits of wild and cultured product. To date, however, there are few studies which explore consumer preferences for wild and cultured salmon. This paper addresses this issue by reviewing general trends in global seafood markets and focusing on market development and consumer preferences for farmed and wild salmon. A consumer survey was developed to elicit preferences for the characteristics of salmon. Results showed that quality was the most important salmon attribute followed by state (fresh/frozen), flesh color, and price. Source of production (wild or farmed) was the least important attribute and species and product form were of intermediate importance. However, preferences for specific characteristics depended on the socioeconomic profile of the respondents. Results indicate potential opportunities for niche marketing of certain types of wild salmon, conditional on resource conservation and management.     

The components of the bid‐ask spread: Evidence from the corn futures market

This article examines whether USDA announcements and commodity index fund rolling activity have an impact on liquidity costs, measured by the bid‐ask spread. Using Huang and Stoll's (1997) model of liquidity costs, we estimate whether changes to liquidity costs are driven by its adverse selection, inventory, or order processing components. Commodity index fund roll activity reduces the asymmetric information cost component of liquidity cost due to an increased proportion of noninformation‐based trading, but the inventory cost component increases as (mostly long only) commodity index funds sell their nearby positions and buy the first deferred contract—raising liquidity providers’ risk of building a position. The sum of these two effects is that liquidity costs remain low during index fund roll periods, averaging one “tick” (0.25 cents). On USDA report release days, we find that informed traders raise the asymmetric information component of liquidity costs in the first hour after release, but the inventory cost component is reduced due to the increase in volume. Similar to index fund roll activity, liquidity costs on USDA report release days remain low, averaging one “tick”. Our findings that liquidity costs are minimally changed during USDA report releases and commodity index fund roll periods is consistent with other recent research on liquidity costs, but we show that what drives liquidity costs differs substantially depending on the circumstances surrounding daily trading.