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Hay Price Forecasts at the State Level

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  • Diersen, Matthew A.

Abstract

Higher 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.

Suggested Citation

  • Diersen, Matthew A., 2008. "Hay Price Forecasts at the State Level," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37600, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
    • Handle: RePEc:ags:nccest:37600
    DOI: 10.22004/ag.econ.37600
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    References listed on IDEAS

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    1. Hopper, Jared A. & Peterson, Hikaru Hanawa & Burton, Robert O., 2004. "Alfalfa Hay Quality and Alternative Pricing Systems," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 36(3), pages 675-690, December.
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