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Document Type

Thesis - University Access Only

Award Date

2002

Degree Name

Master of Science (MS)

Department / School

Economics

First Advisor

Nicole Klein

Abstract

This thesis examines factors affecting the local corn basis in South Dakota before and after the Federal Agricultural Improvement and Reform (FAIR) Act of 1996 in an attempt to identify why the local basis has widened in the years after the 1996 farm bill. The FAIR Act introduced the loan deficiency payment program as an alternative to putting grain under loan. This thesis will determine whether the loan deficiency payment has an affect [sic] on local corn basis through the construction of a model and testing of that model using ordinary least squares regression. Other possible factors affecting basis were identified through a review of literature. Theoretically, factors that have an affect [sic] on local corn basis are futures price, local cash price, local corn usage, transportation costs, local storage availability, yearly local corn production, and seasonality. The results of the regression analysis revealed that the loan deficiency payment accounts for approximately 32% of the widening of the South Dakota local corn basis. Other factors significantly affecting local corn basis are futures price, local supply and demand, and seasonality.

Library of Congress Subject Headings

United States. Federal Agriculture Improvement and Reform Act of 1996
Corn -- Prices -- South Dakota
Agricultural price supports -- Law and legislation -- United States

Format

application/pdf

Publisher

South Dakota State University

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