Analysis of Georgia's peanut buying point's economic viability under the 2002 Farm Security and Rural Investment Act
Webb, Lewis Dewitt
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A representative peanut buying point for the State of Georgia was built using survey data from Georgia peanut buying points regarding their handling capacity, storage capacity, and their costs associated with the handling and storing. The survey was also used to determine the revenue received for their services for commercial and loan farmer stock peanuts. The average profit per ton and return on investment for the representative peanut buying point was determined under twenty-four different scenarios. The scenarios dealt with various fee structures and ratio of loan to commercial peanuts handled and stored. Within the scenarios, alternative handling capacities were imposed to determine the capability of peanut buying points to lower their average costs by spreading the costs of their fixed assets over a larger number of tons handled. Further analysis reveals the sensitivity of the representative Georgia peanut buying point to changes in the percentage of peanuts handled for the CCC loan under the fee structure utilized for the 2002 peanut crop year. This study also alludes to the incorporation of new technology and the ability of the new technology to lower average costs associated with handling, cleaning, and drying.