Forecasting Organic Wheat Prices: Do Conventional Prices Play a Role?

Abstract

Organic wheat production is generally profitable in the West, but farmers considering organic conversion or maintaining current organic fields face uncertainty due to significant price variations over time. The ability to predict price movements in this market is complicated by the limited availability of pricing data as well as missing observations. This study evaluates three methods to impute missing price observations. Additionally, we investigate short- and long-run relationships between organic and conventional wheat prices to understand whether conventional prices can help to predict organic wheat prices. Results indicate that conventional wheat prices influence organic prices, but only in the short run.