Location, Planting Decisions, and the Marketing of Quality-Differentiated Agricultural Commodities
AbstractIn a marketing environment, the demand conditions, the costs of shipping and storing grain varieties, the interest rate on farm loans, and the distribution of cropland in the area are important determinants of growers' planting decisions. In this article, I focus on a market for two quality-differentiated agricultural commodities: one produced with the use of biotechnology and the other, without. I develop a model for analyzing the equilibrium planting and marketing decisions made by geographically dispersed producers during the marketing year following harvest. I identify the types of marketing environments leading to a greater concentration of equilibrium acreage planted to a particular grain variety near the market and investigate the effects of the marketing environment on the spatial patterns of equilibrium land allocation among grain varieties.
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Bibliographic InfoPaper provided by Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University in its series Food and Agricultural Policy Research Institute (FAPRI) Publications with number 03-wp331.
Date of creation: May 2003
Date of revision:
commodity prices; grain storage; location; marketing; product quality; supermodularity.;
Other versions of this item:
- Alexander E. Saak, 2003. "Location, Planting Decisions, and the Marketing of Quality-Differentiated Agricultural Commodities," Center for Agricultural and Rural Development (CARD) Publications 03-wp331, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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