IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/30722.html
   My bibliography  Save this article

Segregation of Grain Markets: Consequences for Price Behavior

Author

Listed:
  • McNew, Kevin
  • Smith, Vincent H.

Abstract

The introduction of genetically modified grain and oilseed products at the farm level and resistance for these products by consumer groups have led to segmentation in grain markets. This study explores the implications for market price behavior for a segregated soybean market for genetically modified (GM) and non-GM varieties. A stochastic dynamic simulation model of production and storage is solved, and Monte Carlo simulation procedures are used to examine price behavior between GM and non-GM soybeans. The results suggest important differences in price behavior between GM and non-GM soybeans. The results obtained in the model simulations are compared with evidence from the Tokyo Grain Exchange, where non-GM and GM soybean futures contracts have traded simultaneously since May 2000. The evidence from the Tokyo Grain Exchange contracts is largely consistent with the results of the simulation model. Price correlations between the Tokyo Grain Exchange non-GM and GM soybean contracts tended to be similar in magnitude to those found in the simulations.

Suggested Citation

  • McNew, Kevin & Smith, Vincent H., 2003. "Segregation of Grain Markets: Consequences for Price Behavior," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(1), pages 1-19, April.
    • Handle: RePEc:ags:jlaare:30722
    DOI: 10.22004/ag.econ.30722
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/30722/files/28010034.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.30722?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Giancarlo Moschini & Harvey Lapan & Andrei Sobolevsky, 2000. "Roundup ready® soybeans and welfare effects in the soybean complex," Agribusiness, John Wiley & Sons, Ltd., vol. 16(1), pages 33-55.
    2. Julie A. Caswell & Eliza M. Mojduszka, 1996. "Using Informational Labeling to Influence the Market for Quality in Food Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1248-1253.
    3. Haniotis, Tassos & Baffes, John & Ames, Glenn C. W., 1988. "The Demand and Supply of U.S. Agricultural Exports: The Case of Wheat, Corn, and Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 20(2), pages 45-56, December.
    4. Shiva S. Makki & Luther G. Tweeten & Mario J. Miranda, 1996. "Wheat Storage and Trade in an Efficient Global Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 879-890.
    5. Parcell, Joseph L., 2001. "An Initial Look At The Tokyo Grain Exchange Non-Gmo Soybean Contract," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 19(1), pages 1-8.
    6. Kalaitzandonakes, Nicholas G., 1999. "A Farm Level Perspective On Agrobiotechnology," Agricultural Outlook Forum 1999 32913, United States Department of Agriculture, Agricultural Outlook Forum.
    7. Kevin McNew & Bruce Gardner, 1999. "Income Taxes and Price Variability in Storable Commodity Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 544-552.
    8. Jill E. Hobbs & Marni D. Plunkett, 1999. "Genetically Modified Foods: Consumer Issues and the Role of Information Asymmetry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 47(4), pages 445-455, December.
    9. McCluskey, Jill J., 2000. "This Product May Contain GMOs," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 15(2), pages 1-4.
    10. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, September.
    11. Glaser, Lewrene K. & Thompson, Gary D., 2000. "Demand For Organic And Conventional Beverage Milk," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36346, Western Agricultural Economics Association.
    12. Gardiner, Walter H. & Dixit, Praveen M, 1987. "Price Elasticity of Export Demand: Concepts and Estimates," Foreign Agricultural Economic Report (FAER) 305286, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 129-156, February.
    2. William H. Kaye-Blake & Caroline M. Saunders & Selim Cagatay, 2008. "Genetic Modification Technology and Producer Returns: The Impacts of Productivity, Preferences, and Technology Uptake," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(4), pages 692-710.
    3. Giannakas, Konstantinos & Fulton, Murray, 2002. "Consumption effects of genetic modification: what if consumers are right?," Agricultural Economics, Blackwell, vol. 27(2), pages 97-109, August.
    4. Mario F. Teisl & Julie A. Caswell, 2003. "Information Policy and Genetically Modified Food: Weighting the Benefits and Costs," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 4, March.
    5. Donald F. Larson & Julian Lampietti & Christophe Gouel & Carlo Cafiero & John Roberts, 2014. "Food Security and Storage in the Middle East and North Africa," The World Bank Economic Review, World Bank, vol. 28(1), pages 48-73.
    6. Fabienne Féménia & Alexandre Gohin, 2010. "Faut-il une intervention publique pour stabiliser les marchés agricoles ? Revue des questions non résolues," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 91(4), pages 435-456.
    7. Parcell, Joseph L., 2002. "Emerging Ip Markets: The Tokyo Grain Exchange Non-Gmo Soybean Contract," Working Papers 26038, University of Missouri Columbia, Department of Agricultural Economics.
    8. Kornher, Lukas & Kalkuhl, Matthias, 2013. "Food Price Volatility in Developing Countries and its Determinants," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(4), pages 1-32, November.
    9. John Crespi & Stéphan Marette, 2003. "“Does Contain” vs. “Does Not Contain”: Does it Matter which GMO Label is Used?," European Journal of Law and Economics, Springer, vol. 16(3), pages 327-344, November.
    10. Chang, Ching-Cheng & Hsu, Shih-Hsun & Wu, Chia-Hsuan, 2004. "An Economy-Wide Analysis Of Gm Food Labeling Policies In Taiwan," 2004 Annual meeting, August 1-4, Denver, CO 19929, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Christophe Gouel & Sébastien Jean, 2015. "Optimal Food Price Stabilization in a Small Open Developing Country," The World Bank Economic Review, World Bank, vol. 29(1), pages 72-101.
    12. Tomek, William G. & Peterson, Hikaru Hanawa, 2000. "Risk Management In Agricultural Markets: A Survey," 2000 Producer Marketing and Risk Management Conference, January 13-14, Orlando, FL 19580, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Matthias Kalkuhl & Lukas Kornher & Matthias Kalkuhl & Irfan Mujahid, 2015. "Food price volatility in developing countries – the role of trade and storage," EcoMod2015 8415, EcoMod.
    14. Demont, Matty & Tollens, Eric, 2001. "Reshaping The Conventional Welfare Economics Framework For Estimating The Economic Impact Of Agricultural Biotechnology In The European Union," Working Papers 31835, Katholieke Universiteit Leuven, Centre for Agricultural and Food Economics.
    15. Hine, Susan E. & Loureiro, Maria L., 2002. "Understanding Consumers' Perceptions Toward Biotechnology And Labeling," 2002 Annual meeting, July 28-31, Long Beach, CA 19898, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Parcell, Joseph L. & Kalaitzandonakes, Nicholas G., 2001. "The Response Of Corn Futures Markets To Agro-Biotechnology News," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36124, Western Agricultural Economics Association.
    17. Umberger, Wendy J. & Scott, Emily M. & Stringer, Randy, 2008. "Australian Consumers' Concerns and Preferences for Food Policy Alternatives," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6174, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    18. Kornher, Lukas & Kalkuhl, Matthias, 2015. "Cost and benefits from regional cooperation on grain reserves: The case of ECOWAS," 2015 Conference, August 9-14, 2015, Milan, Italy 211824, International Association of Agricultural Economists.
    19. Wesseler, Justus & Scatasta, Sara & Nillesen, Eleonora, 2007. "The maximum incremental social tolerable irreversible costs (MISTICs) and other benefits and costs of introducing transgenic maize in the EU-15," MPRA Paper 33229, University Library of Munich, Germany.
    20. Femenia, Fabienne, 2011. "To Subsidize or Not to Subsidize Private Storage? Evaluation of the Effects of Private Storage Subsidies as an Instrument to Stabilize Agricultural Markets After CAP Reforms," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114360, European Association of Agricultural Economists.

    More about this item

    Keywords

    Demand and Price Analysis;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30722. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/waeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.