Virtual Investment Concepts and the Ethanol Industry Report as inadecuate




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The fast-growing US ethanol industry has historically been characterized by large downstream investments made by farmers. The authors assess the value which the stock market may hold for downstream investment by farmers as well as by ethanol manufacturers themselves. The model framework used herein expands on the original VEST framework developed by Siebert, Jones and Sporleder. A word of caution, the model herein is not intended to provide an on-going, risk-reducing business strategy. However, it can and does provide a quick method to calculate the reasonableness of a downstream investment request that a farmer (or any business person) might be challenged to consider. Although virtual stock market investments may certainly assist in value added performance, they (just like brick and mortar processing plants) can provide no guarantee of performance.

Keywords: cooperatives ; corn ; equities ; ethanol ; value added

Subject(s): Resource /Energy Economics and Policy

Issue Date: Nov 01 2008

Publication Type: Journal Article

PURL Identifier: http://purl.umn.edu/53737 Published in: International Food and Agribusiness Management Review, Volume 11, Issue 4 Page range: 67-80

Total Pages: 14

JEL Codes: Q10; Q32

Record appears in: International Food and Agribusiness Management Association (IFAMA) > International Food and Agribusiness Management Review





Author: Siebert, John W. ; Hagerman, Amy D. ; Park, John L.

Source: http://ageconsearch.umn.edu/record/53737?ln=en



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