RP92-217 #2 Producer Marketing Mangement: Deferred Pricing Alternatives for Grain

Grain producers must make marketing decisions every day. First they must decide whether to price or hold grain. If they decide to price grain, they must then choose the most appropriate method of pricing: cash sale, forward contract, or hedging. If they decide to hold grain (not to price), they must choose the most appropriate method of retaining ownership. This fact sheet presents some guidelines to help producers choose the least costly method of owning grain or speculating on price level changes.

RP92-217 No. 19 Cost of Grain Storage

Grain marketing decisions are among the toughest the farm owner/operator or manager must make. Grain producers store grain to speculate on receiving higher prices, earn a return above storage costs, or to take advantage of government programs. Prices must increase enough to cover the additional costs, or forward contract prices must exceed current prices by more than the cost of storage in order to justify forward pricing. The gain in prices received can come from both changes in price level and changes in basis. This research publication discusses all the areas of the cost of grain storage.

Grain Storage Costs and Rental Rates

Trends in Grain Storage - Commercial grain storage eliminates the need to monitor grain conditions and, hence, offers the peace of mind that unsold grain will remain in condition. There may be a cost trade-off between this reduced storage risk and the cost of on-farm storage.

A Land-Use and Water-Quality History of White Rock Lake Reservoir, Dallas, Texas, Based on Paleolimnological Analyses

White Rock Lake reservoir in Dallas, Texas contains a 150-cm sediment record of silty clay that documents land-use changes since its construction in 1912. Pollen analysis corroborates historical evidence that between 1912 and 1950 the watershed was primarily agricultural. Land disturbance by plowing coupled with strong and variable spring precipitation caused large amounts of sediment to enter the lake during this period. Diatoms were not preserved at this time probably because of low productivity compared to diatom dissolution by warm, alkaline water prior to burial in the sediments. After 1956, the watershed became progressively urbanized. Erosion decreased, land stabilized, and pollen of riparian trees increased as the lake water became somewhat less turbid. By 1986 the sediment record indicates that diatom productivity had increased beyond rates of diatom destruction. Neither increased nutrients nor reduced pesticides can account for increased diatom productivity, but grain size studies imply that before 1986 diatoms were light limited by high levels of turbidity. This study documents how reservoirs may relate to land-use practices and how watershed management could extend reservoir life and improve water quality.