Masters Theses

Date of Award

8-1970

Degree Type

Thesis

Degree Name

Master of Science

Major

Agricultural Economics

Major Professor

Charles Sappington

Committee Members

M. B. Badenhop, B. D. Raskopf

Abstract

The purpose of this study was to determine if there were particular patterns of geographical price differentials for com in Tennessee over time and to identify casual factors for price spreads. The period covered by the study was from 1961 to 1968, and secondary data were used in the analysis. A price mapping technique was employed whereby average annual and semi-annual county prices were mapped using seven price ranges--a four-cent price differential for each range. In addition, iso-price lines were fitted for four time periods--1961-62, 1963-65, 1966-68, and 1961-68. Iso-price lines for the chosen periods generally revealed the following geographical price patterns: Prices were lowest in Extreme West Tennessee and highest in the Central Basin (Midstate) and Extreme East Tennessee. Prices advanced from west to east reaching a high in the Central Basin; prices then declined slightly reaching a low in the Cumberland Plateau area; and thereafter prices advanced reaching a high in Extreme Northeast Tennessee. Price maps for the four time periods generally followed the same price patterns and iso-price lines encompassed approximately the same general geographical area. Important factors contributing to geographical price variations in Tennessee were found to be areas of surplus or deficit production, intrastate and interstate transportation costs, and the presence of grain elevators in the state. Lower prices in Extreme West Tennessee could be accounted for chiefly by the joint effects of surplus production and low transportation cost. Corn prices in the area between Memphis and Nashville were regulated by lower prices in Extreme West Tennessee and higher prices in Nashville. Corn prices in Middle Tennessee were attributed to transportation costs and the added expense of services from grain elevators in the area. Lower prices in the Cumberland Plateau area relative to adjacent areas were attributed to savings in elevator fees. The uniform advancement in prices from the Cumberland Plateau area to Extreme East Tennessee was the result of higher transfer costs, deficit com production and a rather uniform distribution of grain handling facilities.

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