Hard red spring and hard red winter wheat protein premiums and price differences in the Pacific Northwest market

Abstract

The purpose of this study was to forecast protein premiums and price differences for hard red spring and hard red winter wheat in the Pacific Northwest market. Models were estimated using the ordinary least squares and Cochrane-Orcutt procedures. Forecast results were evaluated using Theil's U statistic. The cumulative effect of three supply factors; hard red spring wheat supply, hard red winter wheat supply and Canadian wheat supply; provided the best forecast model of spring wheat protein premiums. Another model using different combinations of these factors provided a similar forecast. No model provided an adequate forecast of winter wheat protein premiums. Price differences were forecasted primarily by wheat supply. The addition of export demand to this model improved the forecast. The addition of average crop protein content to this model improved the forecast for some price differences. Another model using wheat supply and the Canadian-United States exchange rate provided an adequate forecast model.