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Soybean crushing margins and risk

Author

Listed:
  • Milton S. Boyd

    (Graduate student in the Department of Agricultural Economics, Purdue University)

  • B. Wade Brorsen

    (Assistant Professor in the Department of Agricultural Economics, Purdue University)

  • Warren R. Grant

    (Agricultural Economist, National Economics Division, Economic Research Service, US Department of Agriculture)

Abstract

The effect of output price risk on soybean crushing margins is determined. The results show crushing margins increase as risk increases indicating soybean processors are risk averse. Thus, soybean processors with better risk management strategies may have a competitive advantage. Policy implications are that the increased margin from risk should be incorporated in evaluating benefits of price stabilization programs.

Suggested Citation

  • Milton S. Boyd & B. Wade Brorsen & Warren R. Grant, 1987. "Soybean crushing margins and risk," Agribusiness, John Wiley & Sons, Ltd., vol. 3(2), pages 235-239.
    • Handle: RePEc:wly:agribz:v:3:y:1987:i:2:p:235-239
    DOI: 10.1002/1520-6297(198722)3:2<235::AID-AGR2720030209>3.0.CO;2-S
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    References listed on IDEAS

    as
    1. Grant, W. R. & Richardson, J. W. & Brorsen, B. Wade & Rister, M. E., 1984. "Economic Impacts of Increased Price Variability: A Case Study with Rice," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 36(4), pages 1-11.
    2. B. Wade Brorsen & Jean-Paul Chavas & Warren R. Grant & L. D. Schnake, 1985. "Marketing Margins and Price Uncertainty: The Case of the U.S. Wheat Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(3), pages 521-528.
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    Cited by:

    1. Ziran Li & Dermot J. Hayes, 2022. "The hedging pressure hypothesis and the risk premium in the soybean reverse crush spread," Journal of Futures Markets, John Wiley & Sons, Ltd., vol. 42(3), pages 428-445, March.

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