You are an alfalfa farmer in Arizona. Provide the sale price of Alfalfa locally, in California and in China. Is there enough meat-on-the bone to geographically arbitrage and ship it to California or China? Provide the shipping prices in the same way that we used in the Shipping Assignment. Will you use truck or train to get the alfalfa to coast prior to barge shipment? If you consider shipping to California, will shipping be exclusively truck or could train be cheaper?
Include a shipping map in the paper and in the presentation that includes mileage by roads, barge or train routes.
How much alfalfa does China import each year? How much of the US Alfalfa crop is exported internationally? How much of the international export is sent to China?
What time of year is alfalfa typically harvested? Are Alfalfa prices higher at certain times of year? (Reference a historical price chart for China and locally… provide actual numbers proving or disproving the case to store or not to store) Consider storing the hay. How do alfalfa farmers store hay? how much does it cost to store to wait for a higher price? Will the alfalfa quality decrease as it is stored?
Look up and provide actual Alfalfa Futures. Would it be smart to sell a contract for 3 months, 6 months or 9 months from now and simply store the product?
Find out what the actual trade tariffs for Alfalfa or general ag products from USA to China. Include that in the calculations
Is there exchange rate risk between the RMB and the USD? Is there volatility between the two currencies?
This assignment will be composed of information that you glean from other sources. Cite everything.
Include a bibliography on the paper or on the Presentation.
If there is not a bibliography submitted and no citations, the highest possible grade for this paper will be a D.
Exampe of in text biblography “Based on Figure 12.18, the rail line the most efficient rail line to travel from Cheyenne, Wy to Long Beach, CA is Union Pacific (Blandford et al. 2018). From Long beach, CA, a barge will ship the Soy meal to China via …”
https://www.azfb.org/Article/Understanding-the-Economics-of-Arizona-Alfalfa#:~:text=High%20Prices%20%2F%20High%20Values,into%20high%20values%20of%20production.
https://www.motherjones.com/politics/2023/12/groundwater-us-exports-alfalfa-hay-china-saudi-arabia-united-arab-emirates-arizona/
The average CIF is $510.91 / ton, up 35.2% year on year. In 2022, a total of 1,788,500 tons of alfalfa hay was imported, up 0.5% year on year. The value of imports was 926 million US dollars, up 36.2% year on year; The average CIF was $517.88 / ton, up 35.6% year on year. https://www.linkedin.com/pulse/2022-china-imported-194-million-tons-dried-forage-grass-doris-zhang/
U.S. Hay Exports in 2023 2024 trade data will be released in Spring of 2025. Total Export Value. $1.32 Billion. Total Volume (Millions). 3 Metric Tons. https://fas.usda.gov/data/commodities/forage-and-hay
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