IDEAS home Printed from https://ideas.repec.org/a/oup/revage/v26y2004i4p539-551.html
   My bibliography  Save this article

Using Formula Prices in the Absence of Publicly Reported Prices: An Application for Segregated Early Weaned Pigs

Author

Listed:
  • Kevin C. Dhuyvetter

Abstract

A formula for deriving the price of segregated early weaned pigs using corn, soybean meal, and market hog prices was estimated by equating return on investment for the different phases of production. USDA reported prices were compared with prices derived from this and several other common formulas. Based on several accuracy measures, the estimated formula was better at predicting spot-market prices than other formulas. Producers appear to form price expectations based on futures plus expected basis rather than simply futures or current cash prices. However, the method of choosing price expectations will depend on the risk attitudes of the buyer and seller and their business relationship. Developing pricing formulas based on the framework outlined here (equal returns on investment) has merit for establishing prices in the absence of publicly reported information. However, it is important that users of the formula understand the conceptual framework of how and why it was developed. Copyright 2004, Oxford University Press.

Suggested Citation

  • Kevin C. Dhuyvetter, 2004. "Using Formula Prices in the Absence of Publicly Reported Prices: An Application for Segregated Early Weaned Pigs," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 539-551.
    • Handle: RePEc:oup:revage:v:26:y:2004:i:4:p:539-551
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2004.00198.x
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bradshaw, Girard W. & Orden, David, 1990. "Granger Causality From The Exchange Rate To Agricultural Prices And Export Sales," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 15(1), pages 1-11, July.
    2. James S. Eales & Brian K. Engel & Robert J. Hauser & Sarahelen R. Thompson, 1990. "Grain Price Expectations of Illinois Farmers and Grain Merchandisers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 701-708.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kanlaya J. Barr & Bruce A. Babcock & Miguel A. Carriquiry & Andre M. Nassar & Leila Harfuch, 2011. "Agricultural Land Elasticities in the United States and Brazil," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(3), pages 449-462.
    2. Ganneval, S., 2016. "Spatial price transmission on agricultural commodity markets under different volatility regimes," Economic Modelling, Elsevier, vol. 52(PA), pages 173-185.
    3. Sporleder, Thomas L. & Boland, Michael A., 2011. "Exclusivity of Agrifood Supply Chains: Seven Fundamental Economic Characteristics," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(5), pages 1-15, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kastens, Terry L. & Schroeder, Ted C., 1993. "Expectations of Cattle Feeding Investors in Feeder Cattle Placements," Staff Papers 118159, Kansas State University, Department of Agricultural Economics.
    2. Kastens, Terry L. & Schroeder, Ted C., 1994. "Cattle Feeder Behavior And Feeder Cattle Placements," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(2), pages 1-12, December.
    3. Burton, Diana M. & Love, H. Alan, 1996. "A Review of Alternative Expectations Regimes in Commodity Markets: Specification, Estimation, and Hypothesis Testing Using Structural Models," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(2), pages 213-231, October.
    4. Baek, Jungho & Koo, Won W. & Mulik, Kranti, 2009. "Exchange Rate Dynamics and the Bilateral Trade Balance: The Case of U.S. Agriculture," Agricultural and Resource Economics Review, Cambridge University Press, vol. 38(2), pages 213-228, October.
    5. Zapata, Hector O. & Gil, Jose M., 1999. "Cointegration and causality in international agricultural economics research," Agricultural Economics, Blackwell, vol. 20(1), pages 1-9, January.
    6. Buddhika Patalee & Glynn T. Tonsor, 2021. "Weather effects on U.S. cow‐calf production: A long‐term panel analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 37(4), pages 838-857, October.
    7. Baek, Jungho & Mulik, Kranti & Koo, Won W., 2006. "The J-Curve Phenomenon: Myth or Reality?," 2006 Annual meeting, July 23-26, Long Beach, CA 21382, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Umarov, Alisher & Sherrick, Bruce J., 2005. "Farmers' Subjective Yield Distributions: Calibration and Implications for Crop Insurance Valuation," 2005 Annual meeting, July 24-27, Providence, RI 19396, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Abubakar, Fahrurrazi & Masih, Mansur, 2018. "Palm oil export : is it price led or exchange rate led? evidence from Malaysia," MPRA Paper 111229, University Library of Munich, Germany.
    10. Brorsen, B. Wade & Irwin, Scott H., 1996. "Improving the Relevance of Research on Price Forecasting and Marketing Strategies," Agricultural and Resource Economics Review, Cambridge University Press, vol. 25(1), pages 68-75, April.
    11. Kastens, Terry L. & Dhuyvetter, Kevin C., 1999. "Post-Harvest Grain Storing And Hedging With Efficient Futures," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-24, December.
    12. Xu, Miao & Orden, David, 2002. "Exchange Rate Effects On Canadian/U.S. Agricultural Prices," 2002 Annual meeting, July 28-31, Long Beach, CA 19886, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Pena-Levano, Luis M. & Ramirez, Octavio & Renteria-Pinon, Mario, 2015. "Efficiency Gains in Commodity Forecasting with High Volatility in Prices using Different Levels of Data Aggregation," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205740, Agricultural and Applied Economics Association.
    14. Kastens, Terry L. & Jones, Rodney D. & Schroeder, Ted C., 1998. "Futures-Based Price Forecasts For Agricultural Producers And Businesses," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-14, July.
    15. Orden, David, 2002. "Exchange Rate Effects on Agricultural Trade," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(2), pages 303-312, August.
    16. Feil, J.-H. & Anastassiadis, F. & Mußhoff, O. & Schilling, P., 2015. "Analysing Farmers’ Use of Price Hedging Instruments: An Experimental Approach," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 50, March.
    17. Yoon, Byung-Sam & Brorsen, B. Wade, 2002. "Market Inversion in Commodity Futures Prices," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 34(3), pages 459-476, December.
    18. Shaik, Saleem & Coble, Keith H. & Knight, Thomas O. & Baquet, Alan E. & Patrick, George F., 2008. "Crop Revenue and Yield Insurance Demand: A Subjective Probability Approach," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 40(3), pages 1-10, December.
    19. Alaba David Alori & Adebayo Augustine Kutu, 2019. "Export Function of Cocoa Production, Exchange Rate Volatility and Prices in Nigeria," Journal of Economics and Behavioral Studies, AMH International, vol. 11(2), pages 1-14.
    20. Liang, Chyi-Lyi (Kathleen) & Feuz, Dillon M. & Taylor, R. Garth, 1998. "Spatial And Varietal Price Analysis Of Dry Edible Bean Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 1(3), pages 1-17.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:revage:v:26:y:2004:i:4:p:539-551. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.