"This study examines corn pricing in the vicinity of processing plants. We develop and test several price-distance models for cargo, insurance and freight (CIF) plant pricing in the presence of varying degrees of exporter competition, and for discriminatory free-on-board (FOB) pricing at the farm. The price-distance functions describing spatial prices near processing plants all depend on local transport costs. But the pricing system (CIF or FOB) and the extent of local competition define the level and spatial rate of change in prices.Estimations of an empirical price-location function for Iowa during the spring of 2003 suggest that prices near the plants of four conventional businesses conform to the CIF pricing model. But prices near producer-owned firms or farmer cooperatives failed to show any statistically significant effect on nearby prices. One plant had a price-distance function that resembled FOB pricing." Copyright 2005 Canadian Agricultural Economics Society.
Grain producers price grain prior to harvest to reduce financial risk and to enhance net returns. Because accomplishing the second objective is debatable, altemative com and soybean preharvest options and hedge marketing strategies were designed to test the hypothesis that preharvest pricing could generate statistically higher average net returns than harvest sales without increasing variability. Weekly seasonal futures price patterns from 1975 to 1994 were used to time marketings. The strategies were applied to Iowa and Ohio model farms. The hypothesis was accepted for some strategies that included options but not for futures-only strategies.I 'n the 1960s, Cootner and Samuelson popularized the random walk theory and .the efficient-market hypothesis. These irnply that prices fluctuate randomly about their intrinsic value and, at any point in time, reflect all available market information. The concept was initially applied to stock markets, which unlike grain are not influenced by seasonal factors related to weather. Using this concept, authors have argued that the optimum investment strategy in the stock market is to routinely buy and hold an index of stocks and bonds rather than attempting to time investments to beat the market (Malkiel, Murphy).During the last thirty years, authors have applied this concept to agricultural futures markets and have conducted marketing efficiency tests (Kamara). Results from these investigations have advanced the debate as to whether preharvest marketing strategies employing hedges and/or options can be used by grain producers to increase profits above those earned through a naive, harvest-time cash marketing strategy. This paper adds to the discussion by examining altemative com and soybean preharvest rnarketing strategies and tests the hypothesis that a set of pre-
The proposed Cargill purchase of Continental Grain's grain merchandising business would join the world's two largest grain and oilseed exporters. Many farm organizations, other participants in the industry, regulators, and policy makers have expressed concerns about the proposed acquisition. We will describe the businesses and market volumes involved, the locations where potential losses of competition from their combination may be important or insignificant, and discuss potential increases in efficiency or effectiveness which might be expected from such a business combination. Ultimately, the questions regarding the acquisition are likely to boil down to comparing the potential benefits and costs, overall, and we will briefly consider both. What are the advantages of concerns raised regarding the Cargill acquisition of Continental Grain company's grain merchandising business? The largest grain exporter acquiring the second largest exporter has raised some concerns regarding potential loss of
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