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Economics of Specialty Corn Production in Missouri

Economics of Specialty Corn Production in Missouri. Joe Parcell PIE -231. In summary, Illinois survey results indicated producers of value-enhanced corn varieties: Required some additional capital investments;

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Economics of Specialty Corn Production in Missouri

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  1. Economics of Specialty Corn Production in Missouri Joe Parcell PIE -231

  2. In summary, Illinois survey results indicated producers of value-enhanced corn varieties: • Required some additional capital investments; • Produced value-enhanced corn varieties to increase profits, capture premiums, and diversify risk; • Required premium and contract specification information.

  3. What about oil content in high-oil corn??????????

  4. If yield was 160 bushel/acre and no yield drag?? Conventional $119.59 White $125.18 High oil $124.16 Waxy $138.76

  5. Segregation Costs(source: USDA)

  6. System vs. Component Decisions • Component decisions - those which can be done with little regard for other concerns • what type of N fertilizer to use • whether to buy a green or red machine • System decisions - those which affect many parts of the business • deciding to grow a crop that requires special seed, field identification, harvest, storage

  7. Identity Preserved System • Market concerns • Financial concerns • Legal concerns • Production concerns

  8. IP Market Concern • First decision is to whom to market • Markets expand beyond the local • direct market to local users - HO corn to feeders • processors • electronic marketing • Contracts establish market decisions • production occurs without contracts • contracts communicate standards from end user to producer

  9. IP Delivery • 2 Delivery Contracts • Harvest Delivery - deliver and price at harvest • Buyers Call - set post harvest delivery date, price at delivery • Delivery date affects • cash flow • need for storage facilities • your ability to maintain quality during storage • actual price received (premium)

  10. IP Production Concern • Storage of grain if a buyers call contract is obtained • size of storage facilities needed • contingency storage facilities - too little or much • quality of grain kept in storage • Adequate compensation paid for farmer storage?

  11. Premium Schedule for High Oil Corn

  12. IP Marketing Concern • Are storage costs accurately considered? • Is the premium sufficient for additional costs? • Is your planning regarding production and marketing standards realistic? Does it take into account a learning period?

  13. IP Profitability • As a system decision IP may be profitable on one farm and not on another

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