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The Effects Of The Micro-Market Structure On Illinois Elevator Spatial Corn Price Differentials

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  • Wenzel, Benjamin P.
  • Hill, Lowell D.
  • Garcia, Philip

Abstract

Corn price differentials among Illinois elevators can often exceed transportation costs. Using primary data, we examine the effects of micro-market structure variables on the differentials in bids prices offered by Illinois elevators. Our findings suggest the existence of a highly developed, responsive market of competing firms, operating in an industry that can be characterized by monopsonistic competition, and to some extent by seasonally induced market power. Local supply conditions, firm productive efficiency, and their operating practices influence price differentials. Further, firm type, final market destination of the grain, and period of the marketing year affect price differentials.

Suggested Citation

  • Wenzel, Benjamin P. & Hill, Lowell D. & Garcia, Philip, 2000. "The Effects Of The Micro-Market Structure On Illinois Elevator Spatial Corn Price Differentials," 2000 Conference, April 17-18 2000, Chicago, Illinois 18927, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:ncrtci:18927
    DOI: 10.22004/ag.econ.18927
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    References listed on IDEAS

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    1. Leroy Davis & Lowell Hill, 1974. "Spatial Price Differentials for Corn among Illinois Country Elevators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 56(1), pages 135-144.
    2. Lowell D. Hill, 1970. "Economic Determinants of the Farm and Elevator Trends in the Volume of Corn Artificially Dried," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(4), pages 555-568.
    3. Anya M. McGuirk & Paul Driscoll & Jeffrey Alwang, 1993. "Misspecification Testing: A Comprehensive Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(4), pages 1044-1055.
    4. Larson, D. & Gallagher, Paul W. & Dahl, R., 1998. "Structural Change and Performance of the U.S. Grain Marketing System," Staff General Research Papers Archive 1218, Iowa State University, Department of Economics.
    5. Merle D. Faminow & Bruce L. Benson, 1990. "Integration of Spatial Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(1), pages 49-62.
    6. Deb, Partha & Sefton, Martin, 1996. "The distribution of a Lagrange multiplier test of normality," Economics Letters, Elsevier, vol. 51(2), pages 123-130, May.
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