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Price and Profit: Investigating a Conundrum

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  • Carl R. Zulauf
  • Gary Schnitkey
  • Carl T. Norden
  • Erick Davidson

Abstract

Corn and soybean prices do not differ significantly among farms participating in the Illinois farm business farm management (FBFM) program from 1996 through 2005. While consistent with the literature, the finding is inconsistent with farmers' opinion of the importance of price. A conundrum exists. However, the study also finds that price and profit per acre are positively related when a given farm is examined over time. Thus, the conundrum can be explained as a difference in perspective: researchers examine variation between price and profit across farms at a point in time while farmers examine this variation within his/her farm over time. Nevertheless, the relationship a farmer observes is likely due to market supply and demand factors, not the farmer's managerial control over the price received. Copyright 2008, Oxford University Press.

Suggested Citation

  • Carl R. Zulauf & Gary Schnitkey & Carl T. Norden & Erick Davidson, 2008. "Price and Profit: Investigating a Conundrum," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(2), pages 352-359.
    • Handle: RePEc:oup:revage:v:30:y:2008:i:2:p:352-359
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2008.00408.x
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    Cited by:

    1. Yeager, Elizabeth & Langemeier, Michael, 2009. "Measuring Sustained Competitive Advantage for a Sample of Kansas Farms," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, vol. 2009, pages 1-12.

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