MARKETING OF WHEAT ON A CONSTANT AND NIL MOISTURE BASIS

William Wilson and Bruce L. Dahl

No 23638, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: This study examined moisture specification practices in the United States and for major exporters and assessed impacts of changes to a nil or constant moisture basis on prices and revenue. These were examined under scenarios where information on moisture in current prices is limited and under a scenario where current prices reflect Full Knowledge of moisture advantages. Results indicate that changing to a nil moisture basis (which requires a subsequent adjustment in volumes to reflect the subtraction of moisture) would increase reported prices from 42 to 70 c/bu for the wheat classes, while changing to a 12 percent constant moisture basis would have limited impacts on reported prices. Effects on relative prices/revenue depend on whether knowledge of moisture advantages are reflected in current prices. If current prices reflect moisture advantages (Full Knowledge), then relative effects on prices/revenues are minimal. If current prices do not reflect moisture advantages (Limited Knowledge), then prices/revenue in drier production regions would increase.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 24
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:23638

DOI: 10.22004/ag.econ.23638

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