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Analyzing Replacement and Expansion of Grain Storage in Oklahoma

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  • Basnet, Arjun
  • Kenkel, Philip L.

Abstract

A mixed integer programming model was developed using General Algebraic Modeling System (GAMS) to forecasts grain facility replacement in Oklahoma. The results indicated regionalization in grain storage with fewer but larger capacity structures. The results of sequential replacement overtime indicated that there would be some abandonment of facilities and some shift to larger capacity structures. Producer’s transportation cost did not increase with sequential replacement as expected because storage were added in places to the current deficits. The results were not sensitive to crop production, fuel and construction cost and amortization factors. Cost comparison per bushel between configuration after sequential replacement and unrestricted replacement show that transportation cost was $0.04 lower in sequential replacement but total cost was $0.02 higher than unrestricted replacement. The findings of the study are important to grain firms and producers considering replacement of obsolete facilities.

Suggested Citation

  • Basnet, Arjun & Kenkel, Philip L., 2014. "Analyzing Replacement and Expansion of Grain Storage in Oklahoma," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162542, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea14:162542
    DOI: 10.22004/ag.econ.162542
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    File URL: https://ageconsearch.umn.edu/record/162542/files/Grain%20Elevator%20-%20SAEA%202014%20_Basnet%20and%20Kenkel_.pdf
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    References listed on IDEAS

    as
    1. Tembo, Gelson & Holcomb, Rodney B. & Kenkel, Philip L. & Tilley, Daniel S., 1999. "Using Mixed-Integer Programming To Determine The Potential For Flour-Milling Industry Expansion," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(3), pages 1-10, November.
    2. Fuller, Stephen W. & Sorenson, L. Orlo & Johnson, Marc A. & Oehrtman, Robert L., 1981. "Alternative Wheat Collection And Transportation Systems For The Southern U.S. Plains," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 6(1), pages 1-12, July.
    3. Warman, Marc, 1994. "Cooperative Grain Marketing: Changes, Issues, Alternatives," Research Reports 279979, United States Department of Agriculture, Rural Development.
    4. George W. Ladd & Dennis R. Lifferth, 1975. "An Analysis of Alternative Grain Distribution Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 420-430.
    5. Ahmed A. Araji & Richard G. Walsh, 1969. "Effect Of Assembly Costs On Optimum Grain Elevator Size And Location," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 17(2), pages 36-45, July.
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    Cited by:

    1. Briggeman, Brian & Jacobs, Keri & Kenkel, Phil & McKee, Greg, 2016. "Current Trends in Cooperative Finance," ISU General Staff Papers 3560, Iowa State University, Department of Economics.

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