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Hay Price Forecasts at the State Level

Author

Listed:
  • Diersen, Matthew A.

    () (Department of Economics,South Dakota State University)

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," SDSU Working Papers in Progress 22008, South Dakota State University, Department of Economics.
  • Handle: RePEc:sda:workpa:22008
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    References listed on IDEAS

    as
    1. Blank, Steven C. & Orloff, Steve B. & Putnam, Daniel H., 2001. "Sequential Stochastic Production Decisions For A Perennial Crop: The Yield/Quality Tradeoff For Alfalfa Hay," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July.
    2. Kim B. Anderson & B. Wade Brorsen, 2005. "Marketing Performance of Oklahoma Farmers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1265-1270.
    3. Hopper, Jared A. & Peterson, Hikaru Hanawa & Burton, Robert O., Jr., 2004. "Alfalfa Hay Quality and Alternative Pricing Systems," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(03), December.
    4. Lewis A. Hagedorn & Scott H. Irwin & Darrel L. Good & Evelyn V. Colino, 2005. "Does the Performance of Illinois Corn and Soybean Farmers Lag the Market?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1271-1279.
    5. Bazen, Ernest F. & Roberts, Roland K. & Travis, John & Larson, James A., 2008. "Factors Affecting Hay Supply and Demand in Tennessee," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6889, Southern Agricultural Economics Association.
    6. Good, Darrel L. & Irwin, Scott H., 2007. "2007 U.S Corn Production Risks: What Does History Teach Us?," Marketing and Outlook Briefs 37494, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
    7. Skaggs, Rhonda K. & Gorman, William D. & Gardner, J. & Crawford, Terry L., 1999. "Surveys of New Mexico Alfalfa Producers and Dairy Hay Users: Will Growth of the State's Dairy Industry be Limited by Alfalfa Availability?," Research Reports 23956, New Mexico State University, Department of Agricultural Economics and Agricultural Business.
    8. repec:ags:joaaec:v:36:y:2004:i:3:p:675-690 is not listed on IDEAS
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    More about this item

    Keywords

    alfalfa price; feed demand; perennial crop; hay stocks;

    JEL classification:

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

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