An economic investigation of the quality discount for Manitoba soybeans

Crop Soybean
Start Date2018
End Date2019
Principal InvestigatorGrant, Charles, C. W. Grant and Company Limited
Total Project Funding$24,650
ReportMPSG Extension Report – FEB 2019

Research Objectives

  1. Assess what makes up the discounted value of Manitoba soybeans: - Determine what makes up the Manitoba soybean discount;
  2. Assess the discounted value of Manitoba soybeans from an end-use perspective: - Determine the theoretical quality discount according to reduced value to end users.
  3. Assess the value of research that can narrow the quality gap: - Determine the value of research in varietal development and/or cultural practices that can narrow the quality gap.

Project Description

The value of Manitoba soybeans is currently discounted below that of soybeans grown in the United States. This discount represents a wider basis off the US soybean futures prices. The wider basis reflects, at least in part, quality differences in the soybeans. Varietal differences and perhaps climatic differences have Manitoba soybeans with lower protein levels than those of soybeans produced by US counterparts.

This research investigates what makes up the quality discount reflected in the Manitoba basis. The research also investigates a theoretical quality discount reflecting reduced value of Manitoba soybeans to end users. Since the discount directly affects the local cash price of soybeans, understanding what makes up the discount is of importance to MPSP farmer members. A greater knowledge of the quality discount will assist with research decisions regarding varietal development and/or cultural practices that can narrow the quality gap.