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Seasonal variability and a farmer's supply response to protein permiums and discounts

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  • Fraser, Rob W.

Abstract

This article extends the analysis of the impact of a system of protein premiums and discounts to that on a farmer’s planned production. Despite an unambiguously negative impact on expected profits of equally likely premiums and discounts, supply response to the introduction of such a system is shown to depend on the level of seasonal variability faced by the farmer. In particular, farmers in regions which are more seasonally unreliable are likely to feature a negative supply response, whereas those in regions which are more seasonally reliable are likely to feature a positive supply response. Consequently, it is suggested that, overall, protein payments for wheat may have encouraged a shift of wheat‐growing activity away from more seasonally unreliable areas.
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Suggested Citation

  • Fraser, Rob W., 1997. "Seasonal variability and a farmer's supply response to protein permiums and discounts," 1997 Conference (41st), January 22-24, 1997, Gold Coast, Australia 135756, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare97:135756
    DOI: 10.22004/ag.econ.135756
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    Cited by:

    1. is not listed on IDEAS
    2. Farquharson, Robert J. & Cacho, Oscar J. & Turpin, J.E., 2000. "Agricultural response analysis in a longer term framework," 2000 Conference (44th), January 23-25, 2000, Sydney, Australia 123634, Australian Agricultural and Resource Economics Society.
    3. Roman Keeney & Thomas W. Hertel, 2008. "U.S. Market Potential For Dried Distillers Grain With Solubles," Working Papers 08-13, Purdue University, College of Agriculture, Department of Agricultural Economics.

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