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Effect Of Hard Red Spring Wheat Consistency On Milling Value

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  • Dahl, Bruce L.
  • Wilson, William W.

Abstract

Increased concerns over the quality of wheat in domestic and export markets has focused attention on the consistency of wheat quality. This study utilized three measures to examine the effect of variability in characteristics on the milling value of wheat. Distributions and correlations for wheat quality characteristics were estimated from U.S. wheat export data from 1985-1997. Effects of variability of wheat characteristics on the value of wheat to the miller for each of the three measures were estimated using a simulation model. U.S. No. 1 exports of Hard Red Spring (HRS) had higher value to millers on each of the three measures (net wheat, millable wheat index, and value added in milling) than did exports of No. 2 or better (OB). However, the value to millers of No. 1 HRS was more variable than for No. 2 OB HRS, likely due to a larger negative correlation between the levels of moisture and shrunken and broken kernels in exports of No. 2 OB HRS than No. 1 HRS. Further, the value of wheat to millers for each of the three measures varied substantially by importing country. Sensitivity analysis indicated that increases in the consistency of moisture would provide the greatest reduction in the variability of value to millers, while increases in the consistency of foreign material, shrunken and broken kernels, and dockage had lesser impacts. This suggests that millers looking to increase the value of wheat lots used in milling may want to consider adding restrictions/incentives on moisture to limit the variability from lot to lot. However for dockage, shrunken and broken kernels, and foreign material, the focus should be on actual levels within lots rather than variability between lots.

Suggested Citation

  • Dahl, Bruce L. & Wilson, William W., 1999. "Effect Of Hard Red Spring Wheat Consistency On Milling Value," Agricultural Economics Reports 23378, North Dakota State University, Department of Agribusiness and Applied Economics.
    • Handle: RePEc:ags:nddaer:23378
    DOI: 10.22004/ag.econ.23378
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    References listed on IDEAS

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    1. Bruno Larue & Harvey E. Lapan, 1992. "Market Structure, Quality and World Wheat Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 40(2), pages 311-328, July.
    2. Diersen, Matthew A. & Wilson, William W. & Johnson, D. Demcey, 1995. "Quality Uncertainty and Grain Merchandising Risk: Vomitoxin in Spring Wheat," Agricultural Economics Reports 23365, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Wilson, William W., 1989. "Differentiation And Implicit Prices In Export Wheat Markets," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.
    4. Wilson, William W. & Gallagher, Paul W., 1990. "Quality Differences And Price Responsiveness Of Wheat Class Demands," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(02), December.
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    6. Wilson, William W., 1986. "Competition in the International Wheat Market," Agricultural Economics Reports 23326, North Dakota State University, Department of Agribusiness and Applied Economics.
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    8. Jean-Jacques Laffont, 1989. "The Economics of Uncertainty and Information," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121360, December.
    9. Dahl, Bruce L. & Wilson, William W., 1998. "Consistency Of Quality Characteristics In Hard Red Spring Wheats; Summary," Agricultural Economics Reports 23305, North Dakota State University, Department of Agribusiness and Applied Economics.
    10. Larue, Bruno & Lapan, Harvey E., 1992. "Market Structure and the World Wheat Market," Staff General Research Papers Archive 10807, Iowa State University, Department of Economics.
    11. Wilson, William W. & Gallagher, Paul, 1990. "Quality Differences and Price Responsiveness of Wheat Class Demands," ISU General Staff Papers 199012010800001447, Iowa State University, Department of Economics.
    12. Michele M. Veeman, 1987. "Hedonic Price Functions for Wheat in the World Market: Implications for Canadian Wheat Export Strategy," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 35(3), pages 535-552, November.
    13. Dahl, Bruce L. & Wilson, William W., 1998. "Consistency Of Quality Characteristics In Hard Red Spring Wheats," Agricultural Economics Reports 23455, North Dakota State University, Department of Agribusiness and Applied Economics.
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    1. Gallardo, Rosa Karina & Holcomb, Rodney B., 2006. "Increasing U.S. Hard Red Winter Wheat Competitiveness in Latin American Markets," 2006 Annual meeting, July 23-26, Long Beach, CA 21187, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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