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Impacts Of Price Variability On Marketing Margins And Producer Viability In The Texas Wheat Industry

Author

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  • Brorsen, B. Wade
  • Grant, Warren R.
  • Richardson, James W.
  • Schnake, L.D.

Abstract

The effects on marketing margins and Texas what producers of shifting from a period with stable prices to a period without stable prices were investigated using both econometric and simulation techniques. Empirical evidence reveals wheat export firms are risk averse and that either futures markets were unable to absorb increased price risk or futures markets absorbed increased price risk at a cost of $0.054 per bushel. Increased variability in prices and reduced farm program benefits substantially reduced the probability of Texas wheat producers receiving a reasonable return on equity and a reasonable rate of asset accumulation.

Suggested Citation

  • Brorsen, B. Wade & Grant, Warren R. & Richardson, James W. & Schnake, L.D., 1984. "Impacts Of Price Variability On Marketing Margins And Producer Viability In The Texas Wheat Industry," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 9(2), pages 1-11, December.
    • Handle: RePEc:ags:wjagec:32144
    DOI: 10.22004/ag.econ.32144
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    References listed on IDEAS

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    1. Bruce L. Gardner, 1975. "The Farm-Retail Price Spread in a Competitive Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 399-409.
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    8. repec:cor:louvrp:-80 is not listed on IDEAS
    9. William Lin, 1977. "Measuring Aggregate Supply Response under Instability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(5), pages 903-907.
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    Cited by:

    1. Richardson, James W. & Knutson, Ronald D., 1987. "Effects Of Farm Policy On The Firm Level Risk Environment And Implications For Policy," Regional Research Projects > 1987: S-180 Annual Meeting, March 22-25, 1987, San Antonio, Texas 272774, Regional Research Projects > S-180: An Economic Analysis of Risk Management Strategies for Agricultural Production Firms.
    2. Buccola, Steven T., 1989. "Pricing Efficiency In Agricultural Markets: Issues, Methods, And Results," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.

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    Keywords

    Crop Production/Industries; Marketing;

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