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

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.

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 Record created 2017-04-01, last modified 2020-10-28

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