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Cotton Price Forecasting and Structural Change

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  • MacDonald, Stephen

Abstract

Agricultural prices have long been forecast with reduced-form models including ending stocks as an independent variable. In recent years, cotton prices have been persistently low compared with the other agricultural products that compete with cotton for land and other inputs. Furthermore, the cotton price forecasting models used by a number of entities have chronically realized positive errors—persistently forecasting prices too high. This paper reviews some general principles behind short-term agricultural price forecasting, discusses some of the issues specific to specifying cotton price forecasting models, and compares the forecasting performance of an number of alternative specifications. The discussion and results are intended to lay the basis for developing new models that account for structural changes in world cotton markets.

Suggested Citation

  • MacDonald, Stephen, 2006. "Cotton Price Forecasting and Structural Change," MPRA Paper 70910, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:70910
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    File URL: https://mpra.ub.uni-muenchen.de/70910/1/MPRA_paper_70910.pdf
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    References listed on IDEAS

    as
    1. Westcott, Paul C. & Hoffman, Linwood A., 1999. "Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs," Technical Bulletins 33581, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Isengildina-Massa, Olga & MacDonald, Stephen, 2009. "U.S. Cotton Prices and the World Cotton Market: Forecasting and Structural Change," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49324, Agricultural and Applied Economics Association.
    2. MacDonald, Stephen & Meyer, Leslie, 2009. "Trends in U.S. Cotton Basis Since 2001," MPRA Paper 70909, University Library of Munich, Germany.

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    More about this item

    Keywords

    forecasting; price; cotton;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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