Hay Price Forecasts at the State Level
AbstractHigher prices for major crops (e.g., corn, soybeans and wheat) have received considerable attention by analysts, researchers, and producers. A common perception is that acres can be readily bid away from other crops to quickly return to equilibrium price levels. Seldom mentioned are crops that do not trade on a national platform. Principal among these crops probably would be hay from alfalfa and grass. A balance sheet model is developed at the state level for South Dakota. As a state with typically large carryover stocks of hay and multiple markets served, South Dakota presents a stark contrast to states with more stable production, supply, and use. Several structural relations and equations are presented to forecast acres, supply, and price through an inverse demand function. A discussion follows on how to update the price forecast as additional information is obtained. Suggestions are also offered on extending the model to other states.
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Bibliographic InfoPaper provided by NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management in its series 2008 Conference, April 21-22, 2008, St. Louis, Missouri with number 37600.
Date of creation: 2008
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alfalfa price; feed demand; perennial crop; hay stocks; Agricultural Finance;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-12-14 (Agricultural Economics)
- NEP-ALL-2008-12-14 (All new papers)
- NEP-FOR-2008-12-14 (Forecasting)
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