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Abstract

Research has suggested that profitability of wheat storage hedges has declined in the 1980s, and that part of this decline is attributable to the increased proportion of stocks under government control during the mid-1980s. This study measures the effect of market and government factors on supply/demand for storage of hard red winter wheat using simultaneous equations procedures. Results indicate that government storage is negatively related to price of storage, shifting both supply and demand functions.

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