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Marketing Costs and Instability in the International Grain Trade

Author

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  • James K. Binkley

Abstract

Fixed factors in the international grain-marketing system reduce flexibility and make adjustment to variable trade volumes difficult. A theoretical model is used to show how this causes marketing costs with trade instability to exceed those occurring under stability. Also, it is demonstrated that the marketing system increases the adverse effects of price variation on importers and exporters. Supporting empirical evidence, primarily dealing with ocean shipping, is presented. The results suggest that stable trade volumes may reduce marketing costs significantly. Thus, the marketing system should be considered in questions dealing with instability in the international grain trade.

Suggested Citation

  • James K. Binkley, 1983. "Marketing Costs and Instability in the International Grain Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 57-64.
    • Handle: RePEc:oup:ajagec:v:65:y:1983:i:1:p:57-64.
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    File URL: http://hdl.handle.net/10.2307/1240337
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    Cited by:

    1. Lence, Sergio H.(Sergio Horacio), 1988. "Transfer costs in agricultural trade: implications for empirical research," ISU General Staff Papers 1988010108000017599, Iowa State University, Department of Economics.
    2. Cho, Gyu D., 1992. "Weekly Price Dynamics in International Wheat Markets," WAEA/ WFEA Conference Archive (1929-1995) 321343, Western Agricultural Economics Association.
    3. Haigh, Michael S. & Bryant, Henry L., 2001. "The effect of barge and ocean freight price volatility in international grain markets," Agricultural Economics, Blackwell, vol. 25(1), pages 41-58, June.
    4. Moon, Sang & Koo, Won W., 2006. "Effects of the Panama Canal on U.S. Competitiveness on the World Soybean Market," 2006 Annual meeting, July 23-26, Long Beach, CA 21418, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Binkley, James K., 1984. "The Distance Factor in Interregional and International Trade," 1984 Annual Meeting, August 5-8, Ithaca, New York 279061, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Haigh, Michael S. & Bryant, Henry L., 2000. "Price And Price Risk Dynamics In Barge And Ocean Freight Markets And The Effects On Commodity Trading," 2000 Conference, April 17-18 2000, Chicago, Illinois 18934, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    7. Dunn, James W. & Gianoulades, Andrea, 1985. "A Short Run Analysis of ocean freight rates for U.S. grain exports," Transportation Research Forum Proceedings 1980s 311799, Transportation Research Forum.
    8. Miller, Thomas A., 1984. "Increasing World Market Fluctuations And U. S. Agriculture: A Summary Of Implications," Staff Reports 277649, United States Department of Agriculture, Economic Research Service.
    9. Miller, Thomas A. & Sharples, Jerry A. & House, Robert M. & Moore, Charles V., 1985. "Increasing World Grain Market Fluctuations: Implications for U.S. Agriculture," Agricultural Economic Reports 307997, United States Department of Agriculture, Economic Research Service.
    10. Michael S. Haigh & Henry L. Bryant, 2000. "The effect of barge and ocean freight price volatility in international grain markets," Agricultural Economics, International Association of Agricultural Economists, vol. 25(1), pages 41-58, June.
    11. Koo, Won W., 1986. "Modelling Comparative Advantage for Agricultural Products," 1986 Annual Meeting, July 27-30, Reno, Nevada 278462, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Marshall, Maria I., 2002. "Political Market Impacts On Mexican Import Permits For White Corn," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36556, Western Agricultural Economics Association.
    13. Jones, James R., 1995. "Maritime Shipping Issues And Us Agricultural Exports," A.E. Research Series 305142, University of Idaho, Department of Agricultural Economics and Rural Sociology.
    14. Marshall, Maria I. & Marsh, Thomas L., 2003. "Endogenous Protection In The Mexican Corn And Sorghum Market," 2003 Annual meeting, July 27-30, Montreal, Canada 22242, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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