Grain Drying in Country Elevators Costs and Economies of Size

Authors

Gary B. Baker, University of Nebraska-Lincoln

Document Type

Thesis

Date of this Version

1-1972

Citation

Thesis (M.S.)—University of Nebraska—Lincoln, 1972. Department of Agricultural Economics.

Comments

Copyright 1972, the author. Used by permission.

Abstract

This study employed the economic-engineering technique to analyze the nature of costs in country elevator grain drying operations.A detailed study of grain drying operations was conducted at three Eastern Nebraska grain elevator firms during the fall harvest season 1971.The objective of this study was to derive data and information pertaining to current operational practices, fixed investments, and the volume of variable inputs on which to base the costs of the grain drying system.

The objectives of this study were:

1. To enumerate and quantify the fixed and variable components of the total costs associated with commercial grain drying in Nebraska.

2. To enumerate and quantify the fixed and variable components of the total costs associated with the handling of grain in conjunction with normal dryer operation.

3. To quantify any difference in the variable costs of drying corn versus grain sorghum.

4. To develop cost budgets for three sizes of grain dryers common to Nebraska grain elevators.

5. To analyze the above objectives in terms of plant utilization and various aspects of economies of size.

This study has a two-fold purpose.The first was to provide a guide in regard to the anticipated costs of commercial grain drying operations; the second, to develop a benchmark or cost budget upon which grain dryer operators can compare their direct costs by size of continuous flow dyer and commodity dried.

The results of the study have enumerated and quantified the fixed and variable cost components of the grain drying systems for three model firms.Cost budgets have been prepared for each of the three sizes of dryers an elevators studied.The difference in the variable costs of drying corn and grain sorghum have not been quantified.Prevailing weather conditions over the 1971 growing and harvest seasons did not permit sufficient observations for both corn and grain sorghum.Results were obtained from which various economies of size could be analyzed.

Advisor: Michael S. Turner