IDEAS home Printed from
   My bibliography  Save this paper

Price and Profit: Investigating a Conundrum


  • Zulauf, Carl R.
  • Schnitkey, Gary D.
  • Norden, Carl T.


Although few in number, studies consistently find that price explains little, if any, of the variation in profit across farms. This contrasts with farmers' opinions regarding the importance of price, as well as the use of price supports as a primary policy instrument. Using farm level data from the Illinois Farm Business Farm Management program for calendar years 1996 through 2004, a potential explanation for this conundrum is identified. Price is significantly more correlated with a farmer's variation in management return from year to year (approximately, +0.45) than with the variation in management return across farmers (approximately, +0.10). Thus, the conundrum arises out of different perspectives: farmers focus on the performance of their own farm over time while studies have focused on the variation among farms.

Suggested Citation

  • Zulauf, Carl R. & Schnitkey, Gary D. & Norden, Carl T., 2006. "Price and Profit: Investigating a Conundrum," 2006 Conference, April 17-18, 2006, St. Louis, Missouri 19000, NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
  • Handle: RePEc:ags:ncrsix:19000

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    Agricultural Finance;


    Access and download statistics


    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:ags:ncrsix:19000. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.