ISSUES AND TRENDS IN THE U.S. FIELD CROP SECTOR

Crop Production/Industries,

GRAIN QUALITY IN THE CANADIAN BARLEY SECTOR: A REVIEW OF REGULATIONS, INDUSTRY PRACTICES, AND POLICY ISSUES

This paper provides an overview of regulations and industry practices relating to grain quality in Canada's barley sector. Special attention is devoted to malting barley. Topics include: supply and disposition of barley in Canada; role of institutions (Canadian Grain Commission and Canadian Wheat Board); grades and standards; variety registration; malting barley selection; and recent changes in handling, procurement, and marketing.barley, grain quality, marketing, procurement, Canada, Marketing, Production Economics,

SINGLE DESK SELLING OF CANADIAN BARLEY

An optimization model is used to evaluate the implications of single-desk selling of Canadian barley for trade flows and producer welfare. Effects on U.S. imports and barley prices are also considered.Canadian Wheat Board, barley, price discrimination, grain trade, Crop Production/Industries, Marketing,

SINGLE-DESK SELLING OF CANADIAN BARLEY: PRICE POOLING, PRICE DISCRIMINATION, AND SYSTEMIC COSTS

An optimization model is used to evaluate the implications of single-desk selling of Canadian barley for trade flows and producer welfare. Effects on U.S. imports and barley prices are also considered.barley, Canadian Wheat Board, grain trade, Marketing,

U.S. PERSPECTIVES ON THE CANADIAN GRAIN PROBLEM; A CRITICAL APPRAISAL

The United States has imported large amounts of wheat and barley from Canada in recent years. Producers in northern-tier states and their political representatives have been strenuously objected, citing market disruption and unfair trading practices by the Canadian Wheat Board. This paper provides a summary and critique of U.S. perspectives on `the Canadian grain problem.'grain trade, wheat, barley, Canadian Wheat Board, International Relations/Trade,

The Economics of Testing for Biotech Grain: Application to StarLink Corn

StarLink corn, a biotech variety not approved for human food use, disrupted the marketing system in 2000 because of inadvertent commingling. Testing protocols have since been established for detection of StarLink in corn shipments to Japan. Domestic food manufacturers, anxious to avoid risks of contamination and product recalls, also test for StarLink kernels. This paper provides an overview of the economics of testing. What are the risks facing buyers and sellers, and how are these influenced by different testing protocols? How do market premiums and discounts, testing costs, and prior beliefs affect the incentives to test? A conceptual model is developed in which sellers can choose whether to pre-test grain prior to shipment. Simulation analysis is used to illustrate the impact of market premiums and other variables on testing incentives and buyer risk.Research and Development/Tech Change/Emerging Technologies,

The Economics of Testing for Biotech Grain: Application to StarLink Corn

StarLink corn, a variety not approved for human use, disrupted the marketing system in 2000 because of inadvertent commingling. This paper provides an overview of the economics of testing grain for biotech content. What are the risks facing buyers and sellers, and how are these influenced by testing protocols? How do market premiums and discounts, testing costs, and prior beliefs affect the incentives to test? A conceptual model is developed in which sellers choose whether to pre-test grain prior to shipment. Through simulation analysis, we illustrate the impact of market premiums and other variables on testing incentives and buyer risk.biotechnology, grain marketing, quality risk, StarLink, testing, Crop Production/Industries,

North American Barley Trade and Competition

International Relations/Trade,

Economic Impact of Fusarium Head Blight in Malting Barley: Blending Margins and Firm-Level Risk

FHB and DON present significant challenges to producers, grain elevators, and the brewing industry. Yield reductions and price discounts incurred by producers in North Dakota, Minnesota, and South Dakota averaged about $45.3 million annually during the years 1998 through 2000. Losses are more substantial when secondary economic impacts are considered. For every$1 of scab losses incurred by the producer, $2 in losses are incurred in other areas of rural and state economies. One way of mitigating these losses is to blend barley with DON and barley without DON. Results from the grain blending model show a sharp decline of DON discounts and losses after blending. The average discount fell from$0.57/bu to $0.17/bu in 1998,$0.48/bu to $0.14/bu in 1999, and$0.38/bu to $0.15/bu in 2000. However, producers may not benefit from blending margins (gains from improved quality less blending costs) because these margins are the primary source of revenue for grain elevators. It should also be noted that the aggregate costs of DON to grain handlers are difficult to estimate because DON is subject to an unusual amount of measurement uncertainty, and penalties for excess DON pose an unusual level of risk.Crop Production/Industries,

IMPACTS OF DON IN THE MALTING BARLEY SUPPLY CHAIN: AGGREGATE COSTS AND FIRM-LEVEL RISKS

DON is a toxic byproduct of fusarium head blight (FHB), a fungal disease of small grains. Beginning in 1993, a prolonged outbreak of FHB occurred in the Upper Midwest, the traditional source of most six-rowed malting barley produced in the United States. Price discounts associated with DON in barley have been significant. This paper has two objectives. The first is to estimate the impact of DON on the value of malting barley grown in the Upper Midwest. Using crop quality data, we use a linear programming model to derive optimal blends of barley supplies, given discount schedules and the distribution of quality factors. The premise is that blending activities, on a regional scale, allow a larger fraction of the crop to be sold as malting. The second objective is to assess the risks associated with DON in the context of a firm-level blending model. We frame a nonlinear optimization problem in which an elevator seeks to maximize the expected sales value of the barley in its bins. Price discounts for several quality factors are incorporated in the analysis, along with probability distributions for DON. Treating DON as a random quality factor adds some interesting complexity to the standard grain blending problem. Attachments: <a href="/Data/ndsu/aem187a.xls">aem187a.xls</a> <a href="/Data/ndsu/aem187a.xls">aem187b.xls</a> <a href="/Data/ndsu/aem187a.xls">aem187c.xls</a> <a href="/Data/ndsu/aem187a.xls">aem187d.xls</a>barley, malt, DON, fusarium head blight, grain quality, blending, Production Economics,