Valuing New Varieties: Trade-Offs between Growers and End-Users in Wheat

Abstract

Variety release decisions usually involve trade-offs between growers and end-users as well as substantial uncertainties about agronomic, quality, and economic variables. In this paper, methodologies were developed to value grower and end-user characteristics for individual wheat varieties and to evaluate trade-offs. The models capture effects of variability in agronomic, quality, and economic variables and were applied to experimental and hypothetical varieties. Results indicate two experimental varieties provide improvements in grower and end-use value over most of the incumbents. Though applied to a specific grain and region, the approach is applicable to other grains and oilseeds that have multiple agronomic and quality attributes. F undamental trade-offs in breeding decisions typically involve yields, disease resistance, and quality. Gains in one area often involve losses in another. Growers want greater yields and disease resistance, without foregoing returns due to quality shortfalls. End-users desire higher quality for functional characteristics; however, varieties with these characteristics may or may not be agronomically competitive. Ultimately, decision-makers confront these trade-offs in making breeding and variety release decisions.Breeders also confront numerous sources of uncertainty. These include uncertainty in variety performance for agronomic and quality attributes, as well as prices including premiums and discounts for measurable characteristics that will be prevalent after varieties are released. Agronomic variables include yields Bruce L.

Wheat Variety Selection to Maximize Returns and Minimize Risk: An Application of Portfolio Theory

“…Availability, and thus price, are related to the number of years since release, as more seed stock becomes available the older the variety becomes. Dahl et al (2004) concluded, ''. .…”

“…Following previous literature on variety selection including Barkley and Porter (1996); Dahl et al (2004);Di Falco and Chavas (2006);and Di Falco and Chavas (2008), the focus of this research is on maximizing ex ante yield across varieties, rather than maximizing profits or revenues. This approach provides information valuable for wheat producers to enhance their ability to manage production risk, and wheat breeders, who can use the results to identify yield-increasing and risk-reducing variety combinations.…”

“…Similarly, seed prices are considered homogeneous across all varieties, following Barkley and Porter (1996) and Dahl et al (2004). This assumption is based primarily on the lack of availability of seed price data.…”

“…Previous studies of wheat variety selection include Barkley and Porter (1996), Dahl et al (2004), and Detlefsen and Jensen (2004). These studies used the neoclassical input characteristic model developed by Ladd and Martin (1976), and extended by Melton, Colette, and Willham (1994), to derive the demand for each wheat variety, given varietal characteristics such as agronomic factors, end-use quality, and yield stability.…”

Protein and the demand for hard wheats*

“…Economic analysis has also made important contributions to wheat breeding decisions and programs including the numerous studies on breeding issues in Australia (i.e. Brennan 1988, 1990, 1997) amongst others in the United States (Lambert and Wilson 2003; Dahl et al . 2004a,b).…”