Estimating Price Variability in Agriculture: Implications for Decision Makers

• Published in: Journal of agricultural and applied economics Vol. 30; no. 1; pp. 21 - 33
• Main Authors: Ray, Daryll E., Richardson, James W., De La Torre Ugarte, Daniel G., Tiller, Kelly H.
• Format: Journal Article
• Language: English
• Published: New York, USA Cambridge University Press 01.07.1998; Southern Agricultural Economics Association
• Subjects: AGRICULTURAL POLICIES; ALGODON; BLE; COTON; COTTON; ESTABILIZACION DE PRECIOS; ETATS UNIS; EUA; FOOD AGRICULTURE IMPROVEMENT AND REFORM ACT OF 1996; Implications of Changing Agricultural Policy for the South; Invited Paper Sessions; LEGISLACION; LEGISLATION; MAIS; MAIZ; MAIZE; MODELE DE SIMULATION; MODELOS DE SIMULACION; POLICY ANALYSIS SYSTEM (POLYSYS) (SIMULATION MODEL); POLITICA AGRICOLA; POLITIQUE AGRICOLE; POLYSYS model; PRECIOS; PRICE STABILIZATION; price variability; PRICES; PRIX; SIMULATION MODELS; SOJA; SOYBEANS; STABILISATION DES PRIX; stochastic simulation; TRIGO; USA; WHEATS; POLYSYS model; price variability; stochastic simulation
• ISSN: 1074-0708; 2056-7405; 1074-0708
• DOI: 10.1017/S1074070800008014

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.