Farmgate, Processor, and Consumer Price Transmissions in the Wheat Sector

Time series techniques (vector autoregression or VAR) are employed to model a three-price dynamic system of the farmgate, processor, and consumer prices of wheat-related goods. An increase (presumably drought-induced) in farmgate wheat price is simulated to determine impacts on processor and consumer prices in the wheat sector. Several findings emerge. First, the increase in farm wheat price (PF-increase) may be expected to immediately generate processor price increases which are statistically significant for almost a year. Second, the PF-increase is expected to generate wheat-related consumer price increases, which are most significant for 22 months. Consumer price increases of wheat-related goods are expected to peak in strength at about the 8-month point following the PF-increase. And third, the consumer price increases are expected to be more gradual, less acute, but of longer duration than the processor price rises.


Issue Date:
1989
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/138802
Published in:
Journal of Agricultural Economics Research, Volume 41, Number 3
Total Pages:
6




 Record created 2017-04-01, last modified 2017-08-26

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