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Estimating Price Variability in Agriculture: Implications for Decision Makers

Published online by Cambridge University Press:  28 April 2015

Daryll E. Ray ,
James W. Richardson ,
Daniel G. De La Torre Ugarte  and
Kelly H. Tiller
Daryll E. Ray
Affiliation:
University of Tennessee Agricultural Policy Analysis Center
James W. Richardson
Affiliation:
Department of Agricultural Economics, Texas A&M University
Daniel G. De La Torre Ugarte
Affiliation:
University of Tennessee Agricultural Policy Analysis Center
Kelly H. Tiller
Affiliation:
University of Tennessee Agricultural Policy Analysis Center
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Abstract

Using a stochastic version of the POLYSYS modeling framework, an examination of projected variability in agricultural prices, supply, demand, stocks, and incomes is conducted for corn, wheat, soybeans, and cotton during the 1998–2006 period. Increased planting flexibility introduced in the 1996 farm bill results in projections of significantly higher planted acreage variability compared to recent historical levels. Variability of ending stocks and stock-to-use ratios is projected to be higher for corn and soybeans and lower for wheat and cotton compared to the 1986–96 period. Significantly higher variability is projected for corn prices, with wheat and soybean prices also being more variable. No significant change in cotton price variability is projected.

Keywords

POLYSYS modelprice variabilitystochastic simulation
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 30 , Issue 1 , July 1998 , pp. 21 - 33
Copyright
Copyright © Southern Agricultural Economics Association 1998

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