The economics of grain cleaning on the prairies

In the Canadian grain marketing system, grains have typically been cleaned to very tight levels at port elevators. In recent years, changes in rail ra tes, livestock production and grain handling technology are pressuring the system for change. A mathematical programming model of vertical marketing f unctions in western Canada is developed to determine optimal locations for cleaning. Cleaning margins are positive in all regions of the prairies. Gra in cleaning is found generally to be more efficient on the prairies than at the ports. However, grain cleaning will continue at ports to some extent b ecause of inadequate capacity at country positions and sunk costs at port f acilities and because primary elevators will likely clean only the dominant grains.