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Costs and risks of testing and blending for essential amino acids in soybeans

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  • David J. Hertsgaard
  • William W. Wilson
  • Bruce Dahl

Abstract

An important emerging problem in soybean marketing is the variability in quality, which is typically measured by protein and ultimately results in mispricing. This study analyzes the effects of testing soybeans for specific quality traits including essential amino acids. A model was developed to analyze costs and risks that may arise for grain handlers to segregate soybeans into high‐ and low‐quality grain flows based on alternative importer purchasing specifications. A stochastic optimization model is used to determine optimal testing locations and intensities in addition to the costs and risks to grain handlers. The model allows for blending to determine optimal shipments from separate locations with differing quality distributions. This paper provides a framework for agribusinesses, grain handlers, and marketers to make decisions in response to importers’ purchasing requirements and strategies.

Suggested Citation

  • David J. Hertsgaard & William W. Wilson & Bruce Dahl, 2019. "Costs and risks of testing and blending for essential amino acids in soybeans," Agribusiness, John Wiley & Sons, Ltd., vol. 35(2), pages 265-280, April.
    • Handle: RePEc:wly:agribz:v:35:y:2019:i:2:p:265-280
    DOI: 10.1002/agr.21576
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    References listed on IDEAS

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    1. Wilson, William W. & Dahl, Bruce L., 2002. "Costs And Risks Of Testing And Segregating Gm Wheat - Summary," Agribusiness & Applied Economics Report 23502, North Dakota State University, Department of Agribusiness and Applied Economics.
    2. Wilson, William W. & Dahl, Bruce L., 2002. "Costs And Risks Of Testing And Segregating Gm Wheat," Agribusiness & Applied Economics Report 23480, North Dakota State University, Department of Agribusiness and Applied Economics.
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    Cited by:

    1. Prithviraj Lakkakula & David W. Bullock & William W. Wilson, 2022. "Asymmetric information and blockchains in soybean commodity markets," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(1), pages 273-298, March.

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