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Pricing Soybeans on the Basis of Oil and Protein Content*

Published online by Cambridge University Press:  28 April 2015

Nelson J. Updaw ,
J. Bruce Bullock  and
T. E. Nichols Jr.
Nelson J. Updaw
Affiliation:
Auburn University
J. Bruce Bullock
Affiliation:
Department of Economics and Business, North Carolina State University, Raleigh, North Carolina
T. E. Nichols Jr.
Affiliation:
Department of Economics and Business, North Carolina State University, Raleigh, North Carolina
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Extract

Demand for soybeans consists of the derived demand for its use as an input in the production of soybean oil and meal. The marginal value product of any bushel is determined by its oil and protein content and the price of oil and meal. Until recently, traders have been forced to estimate the value of soybeans through a grading scheme based on visual inspection and measured moisture content. Instruments that provide a quick and accurate measurement of the protein and oil content of soybeans and other grains are becoming available. Their use will allow purchasers to adjust the price paid for soybeans that do not possess average protein and oil contents.

The purpose of this paper is to report the development of a system of discounts and premiums that would complement the use of these new instruments in the pricing of soybeans.

Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 8 , Issue 2 , December 1976 , pp. 129 - 132
Copyright
Copyright © Southern Agricultural Economics Association 1976

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Footnotes

*

Economic Research Report No. 37, North Carolina Agricultural Experiment Station.

References

[1] Nichols, T.E. Jr., Clapp, J. G. Jr. and Perrin., R.K. “An Economic Analysis of Factors Affecting Oil and Protein Content of Soybeans,” Economic Information Report No. 42, Department of Economics and Business, N. C. State University, September 1975.Google Scholar