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Seasonal Quality Premiums for Wheat: a Case Study for Northern Germany

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  • Loy, Jens-Peter
  • Holm, Thore
  • Glauben, Thomas
  • Steinhagen, Carsten

Abstract

Seasonal variations of the price premium for bread and feed wheat indicate opportunities to profitably adjust grain marketing strategies of farmers that harvest (and store) both qualities. We estimate the seasonal pattern of price premiums on the German market using a vector error correction approach, which accounts for multivariate autoregressive conditional heteroscedasticity of the error terms. Results indicate a significant downward trend for the seasonal premium, with the trend’s magnitude depending on the average quality of harvested wheat. If farmers separately store both bread and feed wheat, they should tend to sell bread wheat before they sell feed wheat, particularly in years of low average wheat qualities.

Suggested Citation

  • Loy, Jens-Peter & Holm, Thore & Glauben, Thomas & Steinhagen, Carsten, 2014. "Seasonal Quality Premiums for Wheat: a Case Study for Northern Germany," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182707, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182707
    DOI: 10.22004/ag.econ.182707
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    Cited by:

    1. Holzer, Patrick & Loy, Jens-Peter, 2016. "Messung Des Vermarktungserfolges Bei Marktfruchtbaubetrieben: Wie Groß Sind Die Unterschiede?," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244893, German Association of Agricultural Economists (GEWISOLA).
    2. Anton Bekkerman, 2021. "Quality forecasts: Predicting when and how much markets value higher‐protein wheat," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 69(4), pages 465-490, December.
    3. Elisabeth Vollmer & Daniel Hermann & Oliver Musshoff, 2019. "The disposition effect in farmers’ selling behavior: an experimental investigation," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 177-189, March.
    4. Peng Peng & Zhigang Xu, 2022. "Price expectations, risk aversion, and choice of sales methods for large‐scale farmers under incomplete market conditions," Agribusiness, John Wiley & Sons, Ltd., vol. 38(4), pages 1012-1031, October.

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