Cost Analysis of Potential North Dakota Subterminal Systems

Craig A. Chase and Delmer L. Helgeson

No 23347, Agricultural Economics Reports from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: The purpose of this study was to analyze the cost structures associated with subterminal facilities. An economic-engineering approach was used to determine the construction and operation costs of four different sizes of subterminal facilities operating at three different plant capacities. Profitability of subterminals was determined mainly by the volume of grain handled. If a subterminal marketed enough grain, it was able to incur both decreasing average fixed and average variable costs. The larger subterminals were found to be more profitable than the smaller facilities indicating the existence of economies of size in both the fixed and variable cost components. Profitability can be dramatically increased given the availability of internal financing for the construction cost and nondepreciable fixed costs. Upper Great Plains Transportation Institute Report No.44

Keywords: Marketing; Agribusiness (search for similar items in EconPapers)
Pages: 58
Date: 1983
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaer:23347

DOI: 10.22004/ag.econ.23347

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