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Spatial Competition in the Iowa Corn Market: Informing the Pricing Behavior of Corporate and Cooperative Grain Merchants

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  • Jasper Grashuis

    (Division of Applied Social Sciences, University of Missouri, Columbia, MO 65211, USA)

Abstract

We study spatial competition in the agricultural input procurement sector by explaining variability in corn cash price offers from grain merchants in Iowa. While rail access, river access, size, and ethanol production exhibit the expected positive relationships to corn cash prices, the impact of ownership structure (corporate or cooperative) is complex. Taking distance-based and density-based approaches to spatial competition, we find corporate and cooperative grain merchants differ in their pricing behavior when confronted with spatial competitors. Consistent with theoretical expectations, cooperative grain merchants play a yardstick role in relation to both corporate and cooperative grain merchants.

Suggested Citation

  • Jasper Grashuis, 2019. "Spatial Competition in the Iowa Corn Market: Informing the Pricing Behavior of Corporate and Cooperative Grain Merchants," Sustainability, MDPI, vol. 11(4), pages 1-13, February.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:4:p:1010-:d:206271
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    Cited by:

    1. Jinho Jung & Juan Sesmero & Ralph Siebert, 2022. "A structural estimation of spatial differentiation and market power in input procurement," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 613-644, March.
    2. Chih-Chun Kung & Tao Wu, 2020. "A spatial equilibrium analysis of using agricultural resources to produce biofuel," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(2), pages 74-83.
    3. Theodoros Skevas & Jasper Grashuis, 2020. "Technical efficiency and spatial spillovers: Evidence from grain marketing cooperatives in the US Midwest," Agribusiness, John Wiley & Sons, Ltd., vol. 36(1), pages 111-126, January.

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