Farms Take Different Approaches to Managing Grain Inventories, Impacting Market Responsiveness

Farms vary widely in how much of their grain production they hold in inventory after harvest vs. selling promptly. About 40% of farms hold 100% of production, while most hold less.

Farms that hold nearly all production in inventory year after year are labeled "store and ignore" farms. They retain more price risk.

Other "market responsive" farms actively adjust inventory levels each year based on market signals about the returns to storage.

Store and ignore farms are less responsive to market signals about optimal inventory holdings.

Future analysis will examine whether store and ignore farms' strategy is more or less profitable than market responsive farms.