Efficiency analysis of agricultural market advisory services: A nonlinear mixed-integer programming approach

Silvina M. Cabrini, Brian G. Stark, Hayri Onal, Scott H Irwin, Darrel L. Good, João Martines-Filho

Research output: Contribution to journalArticlepeer-review


Professional market advisory services provide specific advice (advisory programs) to grain producers on how to market their commodities, and assist them in their efforts to manage price risk. Previous studies analyzed the effectiveness of individual services and could find only weak evidence that these services help farmers improve their returns beyond market prices. The present study applies portfolio theory to determine an efficient combination of advisory programs using a nonlinear integer programming framework. The optimization results provide some evidence that an efficient portfolio provides significantly greater risk and return benefits compared to individual programs and external benchmarks. In a holdout period analysis, efficient portfolios have superior average return performance, but they fail to dominate the relevant benchmarks in terms of mean and variance. However, these out-of-sample results should be considered cautiously, given the small number of observations available.

Original languageEnglish (US)
Pages (from-to)237-252
Number of pages16
JournalManufacturing and Service Operations Management
Issue number3
StatePublished - Jun 2004


  • Agricultural market advisory services
  • Corn
  • Efficient portfolios
  • Nonlinear integer programming
  • Soybeans

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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