Document Type

Thesis - Open Access

Award Date

1988

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Brian H. Schmiesing

Abstract

South Dakota is among 12 states which consistently produce both spring and winter wheat. Since 1983, South Dakota and two other states have produced approximately equal amounts of spring and winter wheat. Historically, South Dakota has predominantly produced spring wheat. From 1977 through 1982 spring wheat production in South Dakota averaged 48.4 million bushels per year. Winter wheat production during the same period averaged 22.4 million bushels. However, since 1983 South Dakota winter wheat production has been slightly larger than spring wheat production. Increased acreage was the major reason for the increase in winter wheat production. South Dakota acreage used for winter wheat production increased from 680,000 acres in 1977 to 1.8 million acres in 1986. Since 1977, spring wheat acreage has remained fairly constant at about 2 million acres, for the ten years reported, except for 1983. Since 1977, South Dakota wheat production emphasis has changed from predominantly spring wheat to a combination of spring and winter wheat. Because spring wheat production was large relative to winter wheat production from 1977-1982, the pricing of South Dakota wheat was probably based on spring wheat prices. Spring wheat and winter wheat compete in a number of product markets. Therefore, the prices of spring and winter wheat will most likely have similar characteristics. Because South Dakota winter wheat production has expanded relative to South Dakota spring wheat production, pricing of South Dakota winter wheat needed to be assessed. Are the South Dakota winter wheat prices more strongly influenced by spring wheat prices or winter wheat prices? Previous analysis regarding hedging versus cross-hedging of winter wheat was performed by Stowater. Cross-hedging of winter wheat on Minneapolis Grain Exchange's spring wheat contracts was recognized as a viable alternative to traditional hedging of winter wheat on the Kansas City Board of Trade. The emphasis of this project was to identify market factors affecting winter wheat prices in South Dakota and to identify the seasonal price patterns in winter and spring wheat prices. Determination of these pricing patterns would help strengthen agribusiness's as well as producer's understanding of wheat price volatility. The research objectives, methodology, and sources of data for this thesis are provided in this chapter.

Library of Congress Subject Headings

Wheat -- South Dakota -- Marketing

Wheat -- South Dakota -- Cooperative marketing

Wheat -- Prices -- South Dakota

Format

application/pdf

Number of Pages

161

Publisher

South Dakota State University

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