Theses and Dissertations Collection

We study the impact of weather disturbances on the price relationship between spring and winter wheat in the United States. Using the USDA crop progress and condition report as a proxy for extreme weather events, we show that weather events significantly affect the price differences between spring and winter wheat. Estimation results support that a lower percentage of spring wheat in good/excellent conditions leads to a higher price spread between spring and winter wheat. The 2021 drought alone raised the price of spring wheat by 8% above winter wheat. Further, the impact of weather disturbances differs by the inventory level, with the impact increasing at higher levels of ending stocks-to-use ratios. And, quantile estimation shows that the impact of spring crop conditions on price spread is greatest when the price spread between spring and winter wheat is low. Overall, our results show how weather disturbances affect commodity markets beyond production.