ABSTRACT
In the previous three chapters of this textbook, the commodity in question was assumed to be homogeneous with known quality attributes. This assumption is generally not accurate for agricultural commodities, which tend to have significant differences in product attributes such as weight, size, color, taste and general appearance. Product heterogeneity arises for a variety of reasons including differences in the underlying genetic stock, management practices, post-farm handling and an assortment of random factors attributable to weather, pests and disease. For most agricultural commodities there are a large number of dimensions for which product quality can vary, so the previous assumption that a commodity will trade at a single price is generally not realistic.
