Strategic Preferences of Farm Supply and Grain Elevator Businesses: Empirical Evidence from Germany

Abstract

Against the background of profound structural changes of the agricultural sector during the last decades, the current paper examines an often neglected area in agricultural economics, namely the local farm supply and grain elevator (FSG) business. By using a discrete choice experiment, we examine strategic preferences of agricultural traders in Germany. For this purpose, we employ a Hierarchical Bayes Model and simulate shares of preferences for different strategic options. Since our study also reveals strategic subgroups, the paper at hand helps on the one hand to better understand the ongoing structural changes within this industry and on the other hand to forecast the manner of competition between the farmers’ market intermediaries in the future.