Origin and Export Basis Interdependencies with Shipping Costs in Soybeans: A Panel Data Analysis
By: Lakkakula, Prithviraj; Wilson, William
Lakkakula, Prithviraj; Wilson, William, Origin and Export Basis Interdependencies with Shipping Costs in Soybeans: A Panel Data Analysis, Journal of Agricultural and Resource Economics, Volume 46, Issue 1, January 2021, Pages 69-84
Forward pricing and allocation mechanisms for rail transportation serve critical functions for the grain-marketing system. We examine the effects of shipping costs on the origin and export basis using a panel simultaneous-equations model. Results indicate that the origin and export basis are determined simultaneously, with each one affected by the dynamic variability of shipping costs. On average, a $1 increase for the shipping costs decreases the origin basis by $0.19 and increases the export basis by $0.82/bu of soybeans. The interaction between shipping cost and exports on the export basis impacts both marketing and trading strategies in the grain-marketing system.