Kevin Kimle

A Dynamic Minimum Variance Hedge

The study presents an operational dynamic minimum variance hedge ratio (DMV) that allows for updates of both cash and futures positions. It is shown that DMV is more general than other operational models in the hedging literature, including the traditional static minimum-variance hedge ratio (SMV). Estimation of DMV is illustrated with a corn storage problem. The example reveals relatively noticeable differences among the magnitudes of DMV and alternative operational hedge ratios. However, gains in hedging effectiveness from using DMV instead of the simpler SMV are negligible.

Structural change among agricultural input industries

Changes among agricultural input industries have important implications for US agriculture. Reasons for these changes have included the globalization of the marketplace, technological advances, and a changing farm sector.

Does the Jack of All Trades Hold the Winning Hand? Comparing the Role of Specialized versus General Skills in the Returns to an Agricultural Degree

This paper examines the roles of specialized versus general skills in explaining variation in the returns to an agriculture degree among graduates working both inside and outside the agricultural industry. The focus on returns by sector of employment is motivated by our finding that most agricultural graduates are employed in non-agricultural jobs. In that study, a sample of alumni graduating from a large Midwestern public university between 1982 and 2006 shows that alumni with majors more specialized in agriculture earned a premium from working in the agriculture industry, but this advantage has diminished over time. Agricultural graduates with more general training earn more outside than inside agriculture. Higher-ability graduates in more industry-focused curricula tend to sort into the agricultural industry, while higher-ability graduates in broader curricula tend to choose jobs outside of agriculture. All graduates are more likely to accept agricultural employment when the farm economy is strong, but agricultural graduates who enter agricultural jobs when the farm economy is weak suffer lifetime earnings reductions. These findings suggest that greater levels of specialization may limit a graduates ability to adjust to changing economic circumstances. Agriculture degree programs could benefit from curriculum innovations that focus on developing more generalized skills.