Costs and Risks of Testing and Blending for EAA in Soybeans

Abstract

Soybean quality is typically measured by protein values. Essential Amino Acids (EAA) and Critical Amino Acid Value (CAAV) provide alternative measures of valuing soybeans. The following thesis analyzes the effects of testing soybeans for specific quality traits. A dual-marketing system is developed to analyze the costs and risks that may arise for grain handlers to segregate soybeans into high-quality and low-quality grain flows based on various importer purchasing strategies. A stochastic optimization model is used to determine the optimal testing locations within the dual-marketing system in order to minimize costs and risks to grain handlers. The model includes a blending component to determine the optimal blending from different locations with various quality distributions. The thesis provides a framework for grain handlers to make decisions based on the international importers’ various and numerous purchasing strategies.