Causality between corn production cost and cash corn price

Kovačević, Vlado and Jeločnik, Marko and Subić, Jonel and Zekić, Vladislav and Milić, Dragan and Zubović, Jovan (2017) Causality between corn production cost and cash corn price. Custos e @gronegcio, 13 (4). pp. 2-16. ISSN 1808-2882

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Abstract

The correlation between the variable and total producers’ costs and a market price for corn was
analysed in this paper. The production price of corn is changing every year and depends on the
corn yields and input costs. Being familiar with
the correlation between production price and cash
price provides the forecast of corn price according to the forecast of the production price trends.
The accurate forecast in price trends enables agricultural producers to sell their products „at the right
time“, corn purchasers to purchase at the best prices, speculators on commodity exchanges
to make high profits, etc.
Furthermore, the results in corn production expressed in a relative
relationship, i.e. the ratio between the production costs and incomes
during one production year are
shown in the presented analyses, avoiding on that way the inflation effects, which would otherwise
be a significant element in 20 years study. Farmers can use the analyses in comparing their results in
the production of corn
with the USA average and thereby they can determine their competitiveness.
The conducted analyses is showing that a production price has a high impact on the market price
creation, so according to the work results, by bringing closer market prices to varia
ble costs of
production per product units, a further decline in price meets „the resistance“ caused by
unwillingness of farmers to sell a product by a price close to achieved variable costs, but they prefer
to store a product and postpone sale and thereby
reduce supply and prevent further decline of prices.
In case that prices increase significantly over the production cost, farmers make profit and supply of
cereals grows and slows down further increase in prices. There was determined high correlation
between operating costs per bushel and price (USD dollars per bushel at harvest), as well as total
costs per bushel and price (USD dollars per bushel at harvest), regarding that an indicator of
operating cost per bushel and price (USD dollars per bushel at harvest) has a higher degree of correlation and lower variability.

Item Type:	Article
Additional Information:	COBISS.ID=512496994
Uncontrolled Keywords:	corn production price, cash price, grain price forecast
Research Department:	Sectorial Economics
Depositing User:	Jelena Banovic
Date Deposited:	14 Feb 2018 09:14
Last Modified:	09 Jun 2020 11:52
URI:	http://35.240.28.64/id/eprint/1186
Author Links:	[error in script] No links available.

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