Centre county Pennsylvania, USA | Good points,but there may be more to it than that. The model does not guarantee positive returns for on farm storage, it simply states that volatility greater than 5 percent is TYPICALLY required for positive return to on-farm storage. Equating cost of on-farm storage to cost for elevator storage may be miss-leading. On-farm storage is significantly lower cost that elevator storage here. It also provides for faster harvest (no waiting in line to dump), and picks up the elevator's profit from drying and blending (vertical integration). Lots of wheels turning in the cash corn marketing game. |
How much volatility will we get this year? Price range?
