The Pricing of Binspace—A Contribution to the Theory of Storage

The short‐run supply of grain storage is reexamined. A classical, positively‐sloping function applies over most of the observed range. Because different grains compete for space, all grains were considered together. A novel method of computing price was used. This price of binspace is positively related to off‐farm grain stocks and sales of grain off farms—each deflated by bin capacity. Sales are a major influence, reflecting current handling demands as opposed to pure storage demands. Handling demands seem to act as a storage supply shifter. The position slope suggests existence of convenience yields for uncommitted bins.