IMPACTS OF DON IN THE MALTING BARLEY SUPPLY CHAIN: AGGREGATE COSTS AND FIRM-LEVEL RISKS Report as inadecuate




IMPACTS OF DON IN THE MALTING BARLEY SUPPLY CHAIN: AGGREGATE COSTS AND FIRM-LEVEL RISKS - Download this document for free, or read online. Document in PDF available to download.

DON is a toxic byproduct of fusarium head blight (FHB), a fungal disease of small grains. Beginning in 1993, a prolonged outbreak of FHB occurred in the Upper Midwest, the traditional source of most six-rowed malting barley produced in the United States. Price discounts associated with DON in barley have been significant. This paper has two objectives. The first is to estimate the impact of DON on the value of malting barley grown in the Upper Midwest. Using crop quality data, we use a linear programming model to derive optimal blends of barley supplies, given discount schedules and the distribution of quality factors. The premise is that blending activities, on a regional scale, allow a larger fraction of the crop to be sold as malting. The second objective is to assess the risks associated with DON in the context of a firm-level blending model. We frame a nonlinear optimization problem in which an elevator seeks to maximize the expected sales value of the barley in its bins. Price discounts for several quality factors are incorporated in the analysis, along with probability distributions for DON. Treating DON as a random quality factor adds some interesting complexity to the standard grain blending problem.Attachments: <a href=/Data/ndsu/aem187a.xls>aem187a.xls</a><a href=/Data/ndsu/aem187a.xls>aem187b.xls</a><a href=/Data/ndsu/aem187a.xls>aem187c.xls</a><a href=/Data/ndsu/aem187a.xls>aem187d.xls</a>

Keywords: barley ; malt ; DON ; fusarium head blight ; grain quality ; blending

Subject(s): Production Economics

Issue Date: 2000

Publication Type: Report

PURL Identifier: http://purl.umn.edu/23103

Total Pages: 20

Series Statement: Agricultural Economics Miscellaneous Report 187

Record appears in: North Dakota State University > Department of Agribusiness and Applied Economics > Agricultural Economics Miscellaneous Reports





Author: Johnson, D. Demcey ; Nganje, William E.

Source: http://ageconsearch.umn.edu/record/23103?ln=en







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