Production response of Illinois farmers to premiums for low-temperature dried corn

Abstract

Low-temperature drying methods result in improved corn quality, which is of some importance to all users but is particularly important to dry millers. Several low-temperature drying methods exist, but there are few economic incentives to encourage their use. A supply function based on farm survey data was estimated to determine responses to price premiums. Factors other than price that influence decisions to purchase grain dryers were identified through ordinary least squares procedure and logit models. The significant coefficients in the models indicate that farmers will shift to low-temperature drying at premiums as low as one cent per bushel.