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;  Produced value-enhanced corn varieties to increase profits, capture premiums, and diversify risk;  Required premium and contract specification information.

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

If yield was 160 bushel/acre and no yield drag?? Conventional$ White$ High oil$ Waxy$138.76

Segregation Costs (source: USDA)

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

Identity Preserved System Market concerns Financial concerns Legal concerns Production concerns

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

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)

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?

Premium Schedule for High Oil Corn

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?

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