Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs

This archived report does not contain recent information or data and was last published April 1999. Included in this report are annual models for U.S. farm prices for corn and wheat, based on market factors as well as government agricultural commodity programs. The pricing relationships utilize a stocks-to-use modeling framework to capture the effects of market supply and demand factors on price determination. This formulation is augmented by factors that represent the changing role of agricultural policies, particularly government price support and stockholding programs. Model properties and model performance measures are presented. Additionally, recent price-forecasting applications of the models are discussed. The relatively simple structure of the estimated price models and their small data requirements lend themselves to use in price-forecasting applications in conjunction with market analysis of supply and demand conditions.