Journal of Agricultural and Resource Economics
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StarLink corn, a variety not approved for human use, disrupted the marketing system in 2000 because of inadvertent commingling. This paper provides an overview of the economics of testing grain for biotech content. What are the risks facing buyers and sellers, and how are these influenced by testing protocols? How do market premiums and discounts, testing costs, and prior beliefs affect the incentives to test? A conceptual model is developed in which sellers choose whether to pre-test grain prior to shipment. Through simulation analysis, we illustrate the impact of market premiums and other variables on testing incentives and buyer risk.
Grain quality is typically measured via several attributes. As these attributes vary across shipments and time, grain quality can be described using multivariate probability or frequency distributions. These distributions are important in modeling blending opportunities inherent in various grain shipments. For computational reasons, it is usually necessary to represent these distributions with a small set of discrete points and probabilities. In this analysis, we suggest a representation method based on Gaussian quadrature. This approach maintains the blending opportunities available by preserving moments of the distribution. The Gaussian quadrature method is compared to a more commonly used representation in a barley blending model.
Changes in policy, institutional and competitive environments have led to increased trade and a rise in trade tensions in the Canada-U.S. barely market. These tensions stem from policies and marketing institutions that have evolved independently in these two countries. Results from a detailed spatial equilibrium model of the Canada- U.S. barley market are presented in this article. Simulations are used to quantify effects of U.S. import restrictions; removal of Canadian rail subsidies, different Export Enhancement Program (EEP) subsidy levels, restoration of Conservation Reserve Program (CRP) acres to U.S. production, and retention of Canadian Wheat Board control over Canadian barley sales – all of which affect trade flows in the barley sector.
This article presents a mathematical programming model of wheat cleaning and blending decisions at a country elevator. Simulations are performed to illustrate the sensitivity of cleaning to selected variables, including the value of screenings, transportation costs, and market discounts for excess dockage. In addition, the model is used to assess the impact of including dockage in the grade standards for wheat.
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