Grain sorghum movements from southwestern Kansas in relation to spatial price differences

Preliminary estimate.Source J Kansas State-Federal Crop Reporting Service.it was estimated that the farm value of grain sorghum was 243.3 percent of the farm value of corn in Kansas.With this increase in value, grain sorghums are also becoming important ss s surplus crop in Kansas.Markets other than local and in the state are needed to a greater degree than before. Purpose and ProbliWayne M. Shirk in his thesis on Marketing Grain Sorghum £n Kansas stated that, "Kansas farmers have not obtained aaxinrum return from their sorghum grain production." 1 Shirk concluded in his study that farmers did not get returns because they sold at the wrong; time of the year.This study was to determine whether Kansas sellers were taking advantage of price differences between markets at a given point in time.A snail part of a spatinl equilibrium problem has been studied to see if the grain sorghaa market was in equilibrium.To do this the economic theory that "under competitive conditions, the price to the producer would be the central market price less the cost of transportation services between the Droduction location and the consuming center" was applied. 2 If an equilibrium was found between the producing area and the consuming area considered, it would be indifferent at to where Kansas grain sorghum was shipped.But, it was felt that an equilibrium did not exist within the structure of the grain sorghum market.The period covered was from July 1, 1955 to December 31, 1957.The partial spatial equilibrium used was made up of the consuming markets of Washington, California, and Kansas City.Kansas was considered part of the main producing area of grain sorghums.The study was limited to an area south of a line from Salina through Goodland, and west of a line from Salina through Wichita, since almost all movement west was from this area.Procedure and Assumptions Grain sorghum prices for Los Angeles, Seattle, and Kansas City, and !wa3 HJayne M. Shirk, Marketing Grain Sorghum in YJUTII Unpublished Master's Thesis, Kansas State College, 195o7p.2. Earl 0. Heady, gooaomlcp o£ A/yiculture Production and.Resource Us*, p. o4<£« movements of ;"rain sorghums to California, Washington, and Kansas City were analyzed.Freight costs (f.o.b.) from Kansas to these three markets were deducted from the prices of each market.This put the prices of the markets considered on the same basic level.Prices for Los Angeles were obtained from Feedstuffs.Volume 27, No, 26 through Volume 29, lio, 52, These prices were listed as nominal terminal market prices and were for the latter part of each week, Los Angeles prices were considered to be representative of terminal market prices in California, since local prices in California should be reflected on the Los Angeles market, Seattle prices were received by letter from P, L. Doctor, Agricultural Statistician, who copied the prices from the records of the Seattle Grain Exchange, These prices were Friday quotations or the closest marketing day to Friday, Seattle prices were considered to be representative of terminal market prices in Washington, since one of the largest feed manufacturers in the state, the Washington Cooperative Farmer's Association, set a price on grain sorghums which was reflected on the price at the Seattle Grain Exchange.Kansas City prices were taken from the Kansas City Grain Market Review .1955-1957, and were Ho, 2 nominal, Friday quotations.Data on grain sorghum movements, which will be discussed later, were obtained from the records of the Kansas Entomological Commission.Carlot receipts in Kansas City were taken from the Kansas pity Grain Market Review .It was assumed that a very large percent of the carlot receipts in Kansas City were from Kansas and further that these receipts came chiefly from the area in Kansas which was covered in the final analysis of this study.A partial basis for this assumption was from toe results of a survey *P, L, Doctor, letter to author, March 5, 1958.Historical su oly and distribution data were obtained from the following U. S. Department of Agriculture publications!Grain and feed statistics Through 1956 .Statistical lulletln No. 159j The.Feed Situation .