|Abstract or Summary
- Wheat is the primary field crop in Oregon. Selection of time of
sale is one of the most important marketing problems facing grain
producers. The objectives of the study deal with economic considerations
involved in a wheat producer's marketing process including
factors motivating the time of sale, price analysis, availability and
use of market information, the role of country grain handlers, and
the use of marketing alternatives to improve net income.
The study area consisted of wheat-fallow farms in the Columbia
Basin in north central Oregon. Included are specialized wheat units
in Umatilla, Gilliam, Morrow, Sherman, and Wasco Counties. Data
were obtained through a mail survey of a selected sample of farms
and through personal interviews with country elevator managers.
The most frequently used alternatives for marketing wheat are
selling the grain all at one time (34 percent), selling at more than
one time (23 percent), and placing all or part of the wheat under
government loan (43 percent). The time of marketing wheat varied
from year to year for 70 percent of the growers. Eighty-five percent
of the growers who varied the time of sale did so to sell at a better
price. Barley sales were much more concentrated in the late summer
and early fall months than were wheat sales. Wheat is held
longer than barley before selling because of greater fluctuations of
wheat prices during the marketing year.
The months were ranked from high to low according to an adjusted
seasonal price index. Grower estimates of the high and low
months of wheat and barley prices ranged throughout the adjusted
seasonal price index. Growers have a greater awareness of the
months of low prices than the months of high prices for both wheat
In basing their selling decision growers place more importance
on unofficial market information than on official reports. Grain
handlers, newsletters, magazines, and past experience were the most
important unofficial information sources. The weekly grain market
report issued at Portland was the most important official source of
market information. Even though farmers have ready access to general
market and price information, they expressed a need for more
specific information on the demand and supply outlook in foreign
countries and government grain marketing operations.
Country elevator managers stressed the point they do not offer
advice on when to market. They only present the market information
they have available, and all marketing decisions rest with the grower.
The price growers receive equals coastal price minus transportation,
wheat commission, and elevator charges.
Characteristics of a producer's marketing environment are price
uncertainty, scarcity of relevant market information, and the oligopsonistic
market structure a producer faces in the sale of his grain.
The following marketing plan was profitable from 1955-56 through
1964-65. If the domestic cash price minus the effective support rate
for wheat is greater than or equal to $0.10 per bushel during August
then August sale of the grain is recommended. If the difference is
less than $0.10 per bushel, the sale is made in November or December.
The net income received from using this alternative for marketing
wheat is $0.035 per bushel more than a straight August sale
and more than $0.015 per bushel greater than a straight November
or December sale.
Barley sales in October and November during the same time
period returned about $1.25 per ton more than an August sale. All
calculations include storage charges and the opportunity cost of not
having sold the grain in August, freeing the producer's capital for