Economic feasibility of segregating grain by protein concentration while harvesting Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/mw22v780k

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  • Price premiums and discounts are currently paid for various classes of wheat in the US marketplace. These premiums and the known heterogeneity of grain protein across landscapes beg the question of whether grain could be separated on the farm to maximize revenues. Theoretically, the concavity or convexity of a price function defines if an opportunity to segregate grain exists. Although this is true, prices in the market place are paid in stepped increments, which result in unique revenue maximizing solutions. This study was conducted to determine the economic feasibility of segregating wheat by protein content on the combine harvester during harvest. Both web-based and spreadsheet calculators were built to predict the best point in which to segregate a crop at, as well as define the protein level and quantity of each segregated volume of grain. The costs of segregation vary by operation, but fixed, variable, and opportunity costs are estimated to total $0.1739 bu⁻¹ if segregation is used every year. Revenue gains varied with the price schedule, field mean protein value, and the standard deviation of protein. Revenue gains increased in proportion to the size of a price step in a price schedule. Soft white winter wheat showed the greatest potential for segregation; however, on average yearly expected premiums are less than $.05 bu⁻¹, well below total variable costs. Price schedules occur which allow for profits of over $1.00 bu⁻¹ from segregation, although these are not the norm. Historically, on-combine grain segregation would not be economically feasible for the average producer. However, under certain supply and demand conditions, premiums occur that would make on-combine grain segregation profitable. Individuals will have to evaluate the feasibility on a case-by-case basis.
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