ECONOMIC-ANALYSIS FOR THE SUBSTITUTION OF WHEAT CLASSES - A CASE-STUDY FOR COSTA-RICA

The main objective of this study was to analyze the economic impact of substituting hard red winter wheat (HRW) of ordinary protein levels f or dark northern spring wheat (DNS) with 14% protein in the Costa Rica n market. In addition to 100% substitution, partial substitutions of 7 5, 50, and 25% HRW wheat in blends with DNS wheat were considered. Two cost models were used to analyze economic impacts. The study showed t hat the substitution provides potential savings to Costa Rican wheat b uyers, millers, bakers, and consumers. The amount oi: savings depend o n freight free on board (FOE) price differences for the two classes of wheat. When the FOE U.S. port price difference between DNS and HRW wh eats is greater than 10 cents per bushel, savings in flour prices resu lt from substituting HRW for DNS wheat in Costa Rican milling formulas . The relationship between the indifference point and HRW wheat flour yields was estimated.