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

Ronald A. Babula and David Bessler ()

Journal of Agricultural Economics Research, 1989, vol. 41, issue 3, 6

Abstract: 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.

Keywords: Crop Production/Industries; Farm Management (search for similar items in EconPapers)
Date: 1989
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersja:138802

DOI: 10.22004/ag.econ.138802

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