The economic implications of a computerized grain trading system for Southeastern poultry firms

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Virginia Polytechnic Institute and State University


The implications of a computerized grain trading system on the Southeast poultry firms was studied. The purposes of this study were to describe the current grain trading system, identify sources of inefficiency in the system, and infer the possible changes in efficiency due to a computerized grain trading system.

A telephone survey was used to gather the information from the grain buyers. The trading practices used by the buyers were identified. The poultry firm's amount of storage, the quantity, quality, oriqin, transportation mode of the purchased qrain, and information about the selling firm was gathered. From the trade information, the pricing and technical ineff iencies plus the level of competition in the market were identified. The primary economic implications to Southeastern poultry firms if a computerized grain trading system were in place were the level of competition would increase, technical efficiency could increase from a decrease in costs of labor and information search, pricing efficiency could increase due to more structured market information, and the middle level margins could decrease and create an overall more efficient market.