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The Role of Quality Characteristics in Pricing Hard Red Winter Wheat

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  • Roberts, Shane
  • Brooks, Kathleen R.
  • Nogueira, Lia
  • Walters, Cory G.

Abstract

This study empirically examines the role of conventional and end-use wheat quality characteristics as well as transportation costs on the pricing of U.S. hard red winter wheat (HRWW) utilizing a hedonic price analysis framework, detailed quality characteristic data as well as location matched price data. We find evidence that multiple conventional quality characteristics and multiple end-use quality characteristics (milling and baking) have a statistically significant and economically important effect on the price of U.S. HRWW. This evidence suggests that, although U.S. HRWW producers are not directly paid premiums or discounts for end-use quality characteristics, they can be paid indirectly through regional HRWW prices. We also evaluate the role of information about conventional and end-use quality characteristics on price as harvest progresses. Results suggest that as harvest progresses, prices are updated to reflect changes in wheat quality. Results suggest revisions to U.S. policy on standard grade factors to improve transparency between characteristics farmers are paid for on grade sheets and characteristics millers and bakers value.
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  • Roberts, Shane & Brooks, Kathleen R. & Nogueira, Lia & Walters, Cory G., 2020. "The Role of Quality Characteristics in Pricing Hard Red Winter Wheat," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304560, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea20:304560
    DOI: 10.22004/ag.econ.304560
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    Cited by:

    1. Yikuan Chen & B. Wade Brorsen & Jon T. Biermacher & Mykel Taylor, 2022. "Spatially varying wheat protein premiums," Letters in Spatial and Resource Sciences, Springer, vol. 15(3), pages 587-598, December.
    2. Hutchins, Jared P., 2024. "The Impact of Information on Input Market Pricing: Evidence from a Bull Market," 2024 Annual Meeting, July 28-30, New Orleans, LA 343868, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Agribusiness; Industrial Organization; Demand and Price Analysis;
    All these keywords.

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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