10/2/2018 3:40:00 PM/Categories: Popular Posts, General News, Today's Top 5, Grains, Wheat, Grain Markets, Montana State University
by Dr. Anton Bekkerman, Associate Professor of Economics, Montana State University
Over the past several months, Kate Fuller and I conducted a survey of Montana’s grain farmers to assess their production and marketing decisions. The survey effort was generously supported by the Montana Wheat and Barley Committee and was intended to provide Montana’s grain industry with a better understanding of the marketing landscape.
One of the questions we asked was about the distance that Montana grain farmers travel to deliver their grain to an elevator. Delivery distance studies have been conducted in surrounding states, including North Dakota and Washington, but no similar information exists for Montana. Understanding transportation patterns can help inform the extent to which delivery costs could affect farm business marketing profitability when fuel costs change.
The table below shows the proportion of surveyed producers that delivered across four different distance ranges. The first column shows the overall average from the responses, and the second column presents averages that are weighted by how much wheat was planted in the county of the respondent. Regardless of how the data are presented, the results of the survey indicate that the majority of Montana’s producers drive their grain between 11-50 miles to an elevator. Additionally, approximately one-fifth of the producers deliver grain over 50 miles.
Weighted by planted acres
In addition to the average responses across the state, it is important to consider how the marketing landscape differs across Montana. The table below shows weighted survey responses in four agricultural districts that produce the majority of Montana grains.
North Central, MT
South Central, MT
The results indicate that in most regions, over 25% of grain travels over 50 miles to be delivered to an elevator. In areas where there are fewer grain elevators—such as South Central Montana—survey respondents indicate that nearly 40% of their grain was driven over fifty miles.
How does Montana’s grain transportation landscape compare to other states? The table below indicates that there are significant differences in grain marketing, with Montana producers driving substantially longer distances to deliver their grain. The table shows that in North Dakota and Washington, producers drive 71-85% of their grain under 25 miles to grain elevator, while Montana producers deliver only 47% of their grain this distance.
Have you faced challenges in delivering grain across longer distances? Has your delivery distance changed over time? We would value your thoughts and information as we continue to better understand how differences in marketing landscapes across the northern Great Plains is related to differences in risk exposure and profitability for the grain industries in this region.
Dr. Anton Bekkerman is an associate professor in the Department of Agricultural Economics and Economics at Montana State University, joining the faculty in 2009 after completing his PhD at North Carolina State University. Bekkerman's primary areas of research are grain marketing, basis and price forecast modeling, understanding how grain prices are affected by changes in supply chain infrastructures and quality demands, and analyzing the economic trade-offs of adopting alternative dryland cropping systems in Montana. One of his current projects is an investigation of how new grain loading technologies are affecting prices that Montana farmers receive for their wheat. Bekkerman is also examining the economic impacts that Montana's rapidly expanding dry pulse industry will have on the state's crop industry.
Originally published at AgEconMT.com
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