IDEAS home Printed from https://ideas.repec.org/p/ags/eaae14/182707.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/182707/files/Loy-Seasonal_quality_premiums_for_wheat-147_a.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.182707?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Teresa Serra & David Zilberman & José Gil, 2011. "Price volatility in ethanol markets," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 38(2), pages 259-280, June.
    2. Blakeslee, Leroy & Lone, Todd A, 1995. "Modelling Optimal Grain-Marketing Decisions When Prices Are Generated Autoregressively," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 22(1), pages 87-102.
    3. Suleyman Karaman & Bahattin Cetin & Ayse Oguzlar & Koksal Yagdi, 2009. "Hedonic price estimation for the Turkish bread wheat characteristics," Quality & Quantity: International Journal of Methodology, Springer, vol. 43(6), pages 895-902, November.
    4. Espinosa, Juan Andres & Goodwin, Barry K., 1991. "Hedonic Price Estimation For Kansas Wheat Characteristics," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(1), pages 1-14, July.
    5. 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.
    6. John C. Henning & Larry J. Martin, 1989. "An Economic Evaluation of Expanded Canadian 3-M Wheat Exports," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 37(3), pages 445-465, November.
    7. Goodwin, Barry K. & Smith, Vincent H., 2009. "Harvest-Time Protein Shocks and Price Adjustment in U.S. Wheat Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 34(2), pages 1-19, August.
    8. Loy, Jens-Peter & Pieniadz, Agata, 2009. "Optimal Grain Marketing Revisited: A German and Polish Perspective," 2009 Conference, August 16-22, 2009, Beijing, China 51058, International Association of Agricultural Economists.
    9. Parcell, Joseph L. & Stiegert, Kyle W., 1999. "Factors Affecting Wheat Protein Premiums," 1999 Annual meeting, August 8-11, Nashville, TN 21524, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Bruno Larue, 1991. "Is Wheat a Homogeneous Product?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 39(2), pages 103-117, July.
    11. Berg, Ernst, 1987. "A Sequential Decision Model to Determine Optimal Farm-Level Grain Marketing Policies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 14(1), pages 91-116.
    12. Leroy Blakeslee, 1997. "Optimal Sequential Grain Marketing Decisions under Risk Aversion and Price Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1140-1152.
    13. Malcolm D. Bale & Mary E. Ryan, 1977. "Wheat Protein Premiums and Price Differentials," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(3), pages 530-532.
    14. Noel D. Uri & Bengt Hyberg, 1996. "The market valuation of wheat quality characteristics," Journal of Economic Studies, Emerald Group Publishing, vol. 23(3), pages 44-63, September.
    15. Paul L. Fackler & Michael J. Livingston, 2002. "Optimal Storage by Crop Producers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 645-659.
    16. 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.
    17. Engle, Robert F, 1982. "Autoregressive Conditional Heteroscedasticity with Estimates of the Variance of United Kingdom Inflation," Econometrica, Econometric Society, vol. 50(4), pages 987-1007, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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).
    3. 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.
    4. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Suleyman KARAMAN & Feyza YAVUZ, 2014. "Hedonic price analysis of the quality characteristics of Anatolian hard red wheat," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 60(10), pages 469-478.
    2. Ahmadi-Esfahani, Fredoun Z. & Stanmore, Roland G., 1994. "Quality Premiums For Australian Wheat In The Growing Asian Markets," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(3), pages 1-14, December.
    3. Fredoun Z. Ahmadi-Esfahani & Roland G. Stanmore, 1994. "Values of Australian wheat and flour quality characteristics," Agribusiness, John Wiley & Sons, Ltd., vol. 10(6), pages 529-536.
    4. Hyberg, Bengt & Uri, Noel D. & Oliveira, Valencia, 1996. "The quality characteristics of Japanese soybean imports," Japan and the World Economy, Elsevier, vol. 8(1), pages 81-98, March.
    5. Parcell, Joseph L. & Stiegert, Kyle W., 1998. "Competition For U.S. Hard Wheat Characteristics," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-15, July.
    6. Uri, Noel D. & Hyberg, Bengt, 1996. "Differentiation And Implicit Prices Of U.S. Wheat Exports," Journal of Food Distribution Research, Food Distribution Research Society, vol. 27(2), pages 1-14, July.
    7. Lavoie, Nathalie, 2001. "Price Discrimination In The Context Of Vertical Differentiation: A Modeling Approach For Wheat Exports," 2001 Annual meeting, August 5-8, Chicago, IL 20603, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Ahmadi-Esfahani, Fredoun Z. & Stanmore, Roland G., 1997. "Export demand for attributes of Australian wheat in Asia and the Middle East," Food Policy, Elsevier, vol. 22(2), pages 145-154, April.
    9. Atanu Ghoshray, 2002. "Agricultural Economics Society Prize Essay Asymmetric Price Adjustment and the World Wheat Market," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 299-317, July.
    10. 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.
    11. Suleyman Karaman & Bahattin Cetin & Ayse Oguzlar & Koksal Yagdi, 2009. "Hedonic price estimation for the Turkish bread wheat characteristics," Quality & Quantity: International Journal of Methodology, Springer, vol. 43(6), pages 895-902, November.
    12. Loy, Jens-Peter & Pieniadz, Agata, 2009. "Optimal Grain Marketing Revisited: A German and Polish Perspective," 2009 Conference, August 16-22, 2009, Beijing, China 51058, International Association of Agricultural Economists.
    13. 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.
    14. Thomas L. Marsh, 2005. "Economic substitution for US wheat food use by class," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(3), pages 283-301, September.
    15. Wilson, William W. & Dahl, Bruce L., 1998. "Grain Quality And North American Hard Wheat Exports," Research Discussion Papers 29249, Montana State University, Department of Agricultural Economics and Economics, Trade Research Center.
    16. Potts, Franziska & Loy, Jens-Peter, 2018. "Getreidevermarktung In Norddeutschland," 58th Annual Conference, Kiel, Germany, September 12-14, 2018 275863, German Association of Agricultural Economists (GEWISOLA).
    17. Veeman, Michele M. & Unterschultz, James R. & Kim, Renee B., 2002. "Canadian Wheat Export Prospects In The Asian Noodle Market: Analyzing Japan And Korean Milling Industries," Project Report Series 24055, University of Alberta, Department of Resource Economics and Environmental Sociology.
    18. Chia-Lin Chang & Yiying Li & Michael McAleer, 2018. "Volatility Spillovers between Energy and Agricultural Markets: A Critical Appraisal of Theory and Practice," Energies, MDPI, vol. 11(6), pages 1-19, June.
    19. Xian, Hui & Colson, Gregory & Karali, Berna & Wetzstein, Michael, 2017. "Do nonrenewable-energy prices affect renewable-energy volatility? The case of wood pellets," Journal of Forest Economics, Elsevier, vol. 28(C), pages 42-48.
    20. 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.

    More about this item

    Keywords

    Crop Production/Industries;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaae14:182707. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.