A

~

SEASONAL VARIATIONS in Prices of Selected Farm Commodities

BULLETIN

350 1963

NOVEMBER

AGRICULTURAL

EXPERIMENT

STATION

'

AUBURN
E, V
Smith, Dirc( t ,r

UNIVERSITY
Auburn, Alabama

CONTENTS
Page M ETHOD of STUDY- - - ------------------4 LIVESTOCK AND LIVESTOCK PRODUCTS-6 Eggs ---------------------------------------- ---------6 Bro ilers -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 8 Beef C attle -- - - - - - - -- - - - - - - -- - - - - - - - -- - - - - - - -- - - - - - 10 Milk - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 12 Calve s --- - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - 14 Ho g s -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 16 FEEDS PURCHASED--------------------Alfalfa H ay -- - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - Cottonseed M eal ---- ------------------- --Soybean M eal------------------------Laying Mash ------------- ------------ ------- -Broiler Mash --- --- --- - --- ----- ---- -- - --- ---- -Mixed Dairy Feed, All Formulas --18 - 18

-20
-- . 22 -24 -26 28

C R O PS ----------------------- - - 30 C o rn - - - - - - - - - - - - - - - - - - - - -- - -- - - - - - - - - - - - - - - - - - - - - - 80 Sw eetp otatoes ----- ----- - -- --- --------- ------- ----- -32 S oy b e an s -- - - - - - - - - - - - - - - - -- - - - -- - - - - - - - - - - - - - - - - - - -34 ----36 O ats - - - - - - - - - - - - - - - - - - - - - - - - - - - --Hay -- - - - - - - - - - - - - - --------------- - - - - - - - - - - - - - - ---38 W he at - - - - - - - - - - - - - - - - - - - - - - -- - - - - -- - - - - - - - - - - - - - - - 4 0 P e an uts - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 2 Co tto n -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - 4 4

CHANCES

IN SEASONAL PRICE PATTERNS BETWEEN 1948-54 AND 1953-62---------------------46

SUMMARY AND CONCLUSIONS-----------------------48 51 APPENDIX -----------------Reliability of Seasonal Price Patterns ------------------ 51 A ppendix Table ------------------------------------- 53

FIRST PRINTINC

3M,

NOVEMBER

1968

SEASONAL VARIATIONS
in Prices of Selected Farm Commodities*
MORRIS WHITE, Professor, Agricultural Economics B. R. McMANUS, Instructor, Agricultural Economics

FARMING is a seasonal venture.

Most products are produced, stored, and sold seasonally. The resulting prices also vary seasonally. Some products have a seasonal demand. Because of this variation in demand and in production, there is also seasonal variation in prices and market movements. Price changes constitute one of the elements contributing to the risk of farming. Farm prices have four important movements: long-run trend, seasonal variation, cyclical movements, and irregular fluctuations. Since a farmer can adjust his operation in some degree to take advantage of seasonal variation, primarily this price movement is considered. However, other price movements are important in planning and are not to be overlooked. Prices received by farmers fluctuate between wide extremes. Prices of raw agriculttural products rise and fall more, faster, and sooner than prices received for processed goods and services. The same is true of farm prices as compared with wholesale and retail prices of farm-derived products. As a result, the farmer experiences difficulty in planning production to cope with price changes. Low or high prices paid and received by farmers greatly influence returns to farming. The level of prices received as related to the level of prices paid determines financial success or failure of a farm operation. The importance of price changes increases
*Analytical procedures and methods of presentation used in this report are similar to those used by Morris White and J. H. Yeager in Auburn University Agricultural Experiment Station Bulletin 295, published June, 1955.

4

ALABAMA AGRICULTURAL

EXPERIMENT STATION

as cash expenditures for items of production comprise a greater proportion of total costs. Commodity prices used in making decisions about changing enterprises or making shifts within existing enterprises are those prices that may be expected to prevail at the time commodities will be sold. A knowledge of factors that affect prices is needed to forecast price changes. Therefore, individuals must keep currently informed on volumes of commodities being produced and marketed, and general supply-demand conditions. Government price-support and storage programs have been important factors in reducing wide seasonal changes in the prices of certain storable commodities. Under these programs purchases and loans are made at harvest time when greatest quantities are available for sale by producers. Amounts placed in storage at that time may be released later when marketings by producers slacken. If the competitive market price is below the support price, these programs result in a relatively higher price at harvest time and a relatively lower price during the normal nonmarketing season than would prevail if the programs were not in effect. Too, government price support programs tend to hold prices up during years of large crops and to hold prices down in years of small crops. This publication presents recent information about seasonal price variation for major commodities produced and sold by Alabama farmers. Six feeds purchased by farmers are included also. Bulletin 295 issued by this Station presented information about seasonal price variations during the period 1948-54. Changes in production, seasonal price patterns, and general price level have rendered that information inadequate. Information presented in this publication provides an up-to-date basis for making estimates of price changes. METHOD OF STUDY Indexes of seasonal variation of prices for 14 commodities sold and 6 commodities purchased by Alabama farmers were calculated for the 10-year period 1953-62. Mid-month prices received and paid by Alabama farmers, as reported by the Alabama Crop Reporting Service, United States Department of Agriculture, were used in all calculations. The index of seasonal variation was de-

SEASONAL VARIATIONS in PRICES

5

rived by dividing averages for each month of the year during the 10-year period by the overall average for the entire period for each commodity. Indexes of seasonal price variation are shown by commodities in the charts by the scale on the right side. The index represents the percentage each monthly average price was above or below the average price that prevailed during the 10-year period. Also, the charts show actual average monthly prices. These are represented by heavy lines using the scale on the left side. The shaded area shows the range within which the monthly price and index number can be expected to, fall two-thirds of the time.1 These charts can be useful in estimating the prices that are likely to prevail at selling time. The price scale and the index scale were made comparable by using a common base of the average yearly price equalling an index of 100. The lower portion of the charts shows the number of times out of 10 that prices for each commodity increased or decreased from the price of the previous month. When no change in price occurred from the previous month, bars in the chart show less than 10 years. The seasonal price index and number of times out of 10 that prices moved up or down from the previous month point out periods in which relatively high or low prices can be expected and how consistent price movements are during these periods. The tables give all data presented in the charts, except the range in prices and indexes. Additional information is in the tables, such as the number of times each monthly price was the highest or lowest during the 10-year period. Sometimes the high and/or low exceeds 10 because the high or low price occurred in more than one month. The -period selected for study of seasonal price variation was one in which trend was not significant at the 0.10 level. The figures in this report are 1953-62 data for prices received or paid by farmers. Cash farm income data cover the 1953-61 period. Income data for 1962 were not available at the time study was made. Price data for 1962 were preliminary.
1 The index of irregularity was computed as plus or minus one standard deviation. This means that the monthly average price or index number for a given year should fall within the computed average plus or minus the percentage value of one index of irregularity 2 out of 3 years. The shaded area was determined by delineating the area within plus or minus one index of irregularity about the mean.

6

ALABAMA AGRICULTURAL

EXPERIMENT STATION

LIVESTOCK

AND

LIVESTOCK PRODUCTS
EGGS

Seasonal price changes have been greater for eggs than for all
other farm commodities. During 1953-62 the change in average price from the low in the spring (May) to the high in the winter (December) was 9.5 cents per dozen, or 24 per cent, Table 1 and

Figure 1.
The average price for December was greater than that for any of the other months. However, there were 4 years during the 10 when the December average price dropped below the November average. Response by producers to the higher prices that normally oc-

curred during the fall and winter months resulted in relatively greater adjustment being made in prices during these months.
TABLE 1. EGGS: AVERAGE SEASONAL MOVEMENTS OF ALABAMA FARM PRICES, 1953-62

Seasonal average Month Index of
variation

Number of times

Monthly movement

Index of ularity 12 8 8 8 10 11 10 10 10 11 12 13 123 10
irreg-

Price, cents dozen 49.1 46.2 42.0 40.3 39.7 40.0 41.2 43.0 45.4 47.5 48.4 49.2 532.0 44.3
per

Times up Times Times from down from same as High Low previous previous previous month month month 5 0 0 0 0 0 0 0 0 1 1 3 10 0 0 1 4 4 3 1 0 0 0 0 0 13 2 2 1 1 4 6 7 10 9 8 8 6 64
on onh

January February March April May June July August September

111 104 95 91 89 90 93 97 103

8 8 8 8 5 2 3 0 0 1 2 4 49
ec mnh

0 0 1 1 1 2 0 0 1 1 0 0 7
a

107 October 109 November December 111 TOTAL 1200 AVERAGE 100

'When the high or low price occurred in more than reported as a high or low.

SEASONAL VARIATIONS in PRICES

7

Cents per dozen 55.50.45.40.35. 30.

[

EGGS1

Index pct.of 1953 -62 av. S130 120
110

100 30 80 70 60 up or down from previous month 10 9 8 7 6

10 11

I

I

I

10II

J

F

M

A

M

J J Months

A

S

0

N

D

Figure 1. Eggs: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10year average= 100).

8

ALABAMA AGRICULTURAL EXPERIMENT STATION BROILERS

The level of prices received at the farm had declined more for broilers than for other farm commodities. Development and adoption of new production technology together with increased processing and marketing efficiency have enabled the industry to expand production while experiencing declining prices. Production of broilers in the United States increased at an average rate of 9 per cent per year during the 195862 period. The production increase in Alabama was 26 per cent per year during the same period. Price fluctuations within the year showed a rise through January and February to a peak in March, Table 2 and Figure 2. This rise was followed by a drop in April to a level that was maintained until August, when a downward trend began and continued through December. the farm averaged 18.8 cents per Prices received for broilers 1953-62. This was 23 per cent higher pound during the period than the 15.3 cents average during the past 5 years, Table 2 and Appendix Table 1.

,at

TABLE 2. BROILERS: AVERAGE SEASONAL MOVEMENTS OF ALABAMA FARM PRICES, 1953-62

Seasonal average Month IndeIndex Index of variation January February March April May June July August September October November December TOTAL
AVERAGE

Number' of times

Monthly movement

irregularity 22 20 23 26 26 27 27 29 28 28 26 19 300
25

Price, cents per pound 19.5 19.9 20.5 19.6 19.4 19.4 19.4 19.0 17.9 17.2 16.9 16.8 225.4
18.8

Times Times up Times from down from same as High Low previous previous previous month month High Lw month 1 2 6 1 0 0 3 1 1 0 0 1 16 0 0 0 0 1 1 0 0 1 3 2 7 15 7 6 7 0 3 2 5 2 1 1 3 3 38 1 2 2 8 5 3 3 6 8 7 6 6 56 2 2 1 2 2 5 2 2 1 2 1 1 26

104 106 109 104 103 103 104 101 96 91 90 89 1200
100

See Table 1.

SEASONAL VARIATIONS in PRICES

9

Cents

per-

BROILERS

pound 25.00F23.00 21.00 19.0017.005.003.00
I

Index pct.

of

1953 -62 av.
130

-80 70
I I I I
I I

I

I

~-

-60

Times upor down from previous month
10

9 6 Times up

I0 9 8 7 6 5
4

(>

FR
66 Tmes down

3 2
Li

33

55 8 9 0 J F M A M 8 9 S 0 N D

i

J J Months

A

Figure 2. Broilers: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-

62 (10-year average

= 100).

10

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

BEEF CATTLE

Beef cattle prices were relatively high in the spring and low in the fall, Table 3 and Figure 3. Fewer cattle were marketed in the spring when farmers held

or bought cattle for grazing. In the fall, cattle that had been on
pasture were sold in greater numbers, resulting in lower prices. November prices averaged 8 per cent below the average price for the period 1953-62. The April price was 7 per cent above average. Beef cattle prices were for all grades and classes of beef cattle excluding calves. They were the most variable of any commodity prices except those for calves. The average index of irregularity

was 24. The average price of beef cattle was $15.45 per hundred pounds during 1953-62. Alabama farmers received slightly more than 15 per cent of their cash farm income from the sale of cattle and calves during the period of study.
TABLE

8.

BEEF CATTLE: AVERAGE SEASONAL MOVEMENTS FARM PRICES, 1958-62

OF ALABAMA

Seasonal average Month Index of variation
101

Index of irregularity 28 21 21 22 22 25 25 25 27 26 27 26 291 24

Price,

dollars per
cwt.

Monthly movement Times Times Times up from down from same as High Low previous previous previous month month month Number' of times 1 0 3 4 2 0 0 0 0 0 0 1 11 2 1 0 0 0 0 0 0 0 1 6 2 12 10 7 8 6 4 0 2 1 3 1 3 8 53 0 2 2 3 6 10 7 8 6 6 7 1 58 0 1 0 1 0 0 1 1 1 3 0 1 9

mnuary Ja

F ebruary Mlarch April M Iay Ju ne JA August S eptember October November D ecember
TOTAL
AVERAGE

102 106 107 106 101 100 97 97 94 92 96
1200
100

15.58 15.89 16.39 16.57 16.45 15.59 15.46 14.98 14.93 14.48 14.25 14.86 185.43 15.45

ily

1See Table 1.

SEASONAL

VARIATIONS

in

PRICES

SEASONAL VARIATIONS in PRICES

11

Dollars per hundred pounds

Index pct. of 1953 -62 ov.

20.001
18.50 17.00 15.50 14.00 12.50 11.00
I I I
/////////~~ //
I

-1130
120

1to
t00
90 80 70

Times up or down from previous month

10
9 8 7 6 5 4 3 2

6
0
IC 0
9 8 7 6 5 4 3 2

Times up

33

5
6 7 8 9 J F M
4I

HI

L.J6 Times down 7 8 9 0 J A S 0 N D

10-

LIC
A M J Months

Figure 3. Beef Cattle: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

12

ALABAMA

AGRICULTURAL EXPERIMENT STATION MILK

Average price of milk was relatively lower in April, May, and June, the flush spring production period, Table 4 and Figure 4. Price was highest during the fall and winter months when less fluid milk was diverted to manufacturing purposes. From May to December, the price rose 16 per cent as an average during the 10year period. Seasonal variation in the price of milk resulted from the fluctuation in milk production. Increased milk supplies during the spring, which resulted in lower prices, were chiefly the result of higher production per cow. Milk prices were a combination of prices of milk used for fluid and for manufacturing purposes. Many farmers who produce milk for the fluid market sold large quantities of surplus milk at manufacturing prices during spring and early summer. Even though milk prices were lower during spring and early summer, income remained fairly constant because of changes in the volume of milk sold. Milk prices were relatively stable from year to year. The average index of irregularity for the 10-year period was only 4, the
TABLE 4. MILK: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1953-62

Month

Seasonal average Index Index Price, of of dollars of irregper variation ularity cwt. 107 105 99 93 92 93 95 97 102 105 107 105 1200
100

Monthly movement Times up Times Times from down from same as previous previous previous High Low month month month 6 2 0 0 0 0 0 0 0 1 5 0 14 0 0 0 5 6 2 0 0 0 0 0 0 13 5 0 0 0 4 5 8 6 10 10 9 0 57 2 7 10 10 5 0 2 2 0 0 0 9 47 3 3 0 0 1 5 0 2 0 0 1 1 16

Number' of times

January February March April May June July August September October November December TOTAL
AVERAGE

4 4 6 5 6 6 6 4 3 2 2 2 51
4

5.85 5.74 5.40 5.06 5.05 5.09 5.18 5.28 5.57 5.73 5.84 5.73 65.51
5.46

1 See Table 1.

SEASONAL

VARIATIONS

in

PRICES

SEASONAL VARIATIONS in PRICES

13 1

lowest for any commodity in this report. Dairy products brought Alabama farmers about 7.6 per cent of the total cash farm income
during 1953-61. In addition, sales of calves and culled dairy

cattle provided an important source of income to, dairy farmers.

MILK1
Dollars per Index pct. of

hundred pounds 6.501

1953-62

av.

-1120
110
00 90 80
I I I I I

6.001

F.0
5.004.501 4.00 I L I I Times up or down from previous month I0 9 8 7 Times up 6
4

70 I0 9 8 7 6 5
4

3
2

H
33

3 2
LD

3

e

uTimes

down

5

6 7
i

6 7 IC A M J J Months
1:1:1 1 :1

10 J F M A S 0 N

0

Figure 4. Milks: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 195362 (10-year average = 100).

14

ALABAMA

AGRICULTURAL

EXPERIMENT STATION

CALVES

Prices of calves (includes all calves under 1 year old) were

relatively high in the spring and low in the fall, Table 5 and Figure 5. The seasonal price pattern for calves was almost identical

to that of beef cattle.
The average index of irregularity was 25, the highest for any commodity in this report. This high index of irregularity indi-

cated that there was a considerable range in monthly prices from year to year. The high price was 15 per cent greater than the low. Prices of calves averaged $18.72 per hundred pounds during the 10-year period.
TABLE 5. CALVES: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1958-62

Month

Seasonal average Price, Index Index ofex of dollars of irregper variation larity cwt. 101 104 105 107 106 99 99 97 97 95 93 97 1200
100

Monthly movement Times Times up Times from down from same as High Low previous previous previous month month month 0 1 3 6 2 0 0 0 0 0 0 2 14 4 0 0 0 0 0 0 1 1 0 4 2 12 10 9 6 5 3 0 4 1 3 1 3 7 52 0 0 3 3 5 10 4 7 4 7 6 2 51 0 1 1 2 2 0 2 2 3 2 1 1 17

Number' of times

January February March April May June July August September October November December TOTAL
AVERAGE
1

28 23 22 23 22 25 25 26 27 27 27 25 296
25

18.94 19.52 19.75 19.99 19.83 18.50 18.60 18.14 18.16 17.70 17.44 18.13 224.70
18.72

See Table 1.

90

SEASONAL

VARIATIONS

in

PRICES

15

SEASONL~

VARIATIONS~ in PRICES1

Dollars per
hundred pounds

CALVES

Index pct. of 1953-62 av. 130

25.00 23.02I.OOL 19.00j
'

~V

120 I10 100

17.00F
15.00
801

70
,I
I I I I I

I
I

I
I

I
I

I
I

I
I

I
I

1

I/////////////

60

Times up or down from previous month ~'////////////////////////////////~5~'~/ 10 9 8
6

0
9 8

7 Times u
up

6

5
4

5
. 4 3 2

3
2 3
10

5

><

5

9
J F M A M J J

Times down A S 0 N D

0

Months
Figure 5. Calves: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 195362 (10-year average - 100).

16

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

HOGS

Hog prices showed a distinct seasonal variation in Alabama during 1953-62, Table 6 and Figure 6. The average seasonal changes were gradual, with the average high price occurring in July and the low in December. The average seasonal movement was upward from December through July and then downward through November. Seasonal price changes reflected the pattern of marketings. As marketings increased in late fall and winter, hog prices declined to 6 per cent below average in December. There was an increase of 14 per cent in prices from the low point in December to the July peak. Hog prices had a high degree of variability. They varied more than prices for any of the crops and for eggs. Prices are for all weight groups of hogs. Average price was $16.12 per hundred pounds during 1953-62. Alabama farmers received approximately 8.5 per cent of their cash farm income from the sales of hogs during the study period.
TABLE 6. HOGS: AVERAGE SEASONAL MOVEMENTS OF ALABAMA FARM PRICES, 1953-62 Number' of times Monthly movement

Seasonal average Month IndeIndex Index of of irregvariation ularity January February March April May June July August September October November December 95 97 98 101 102 105 107 105 103 98 95 94 20 19 20 19 20 18 18 15 15 14 15 18 209 17 Price, dollars per cwt. 16.32 16.55 16.78 17.23 17.49 18.08 18.28 18.02 17.65 16.85 16.21 16.04 205.50 17.12

Times Times Times up from down from same as High Low previous previous previous month month month 1 0 0 1 0 1 2 3 2 1 0 0 11 5 0 0 0 1 0 0 0 0 0 1 4 11 4 7 4 7 4 7 6 5 3 2 0 3 52 3 3 5 2 5 2 4 4 7 8 8 5 56 3 0 1 1 1 1 0 1 0 0 2 2 12

TOTAL 1200 100 AVERAGE
1 See Table 1.

SEASONAL

VARIATIONS

in

PRICES

17

SEASONAL VARIATIONS in PRICES

Dollars per hundred pounds 21.0019.0017.0015.00L 13.00

Index pct. of 1953-62 av.

-] 130
120
110 100 90

80 70 11.00
L I I I I I I I I I

Times up or down from previous 10 9 8 7 6 5

month ~

60
t0

Times up

9 8 7 6 5 4 3 2

i

6

Times down

6

I

0 J F M A M J J Months
A

I0

S

0

N

D

.......... ,

r-

~.~T ~.- l -~-

Figure 6. Hogs: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 195362 (10-year average = 100).

18

ALABAMA AGRICULTURAL EXPERIMENT

STATION

FEEDS PURCHASED
ALFALFA HAY

The seasonal pattern of prices paid by farmers for alfalfa hay moved gradually from season to season, Table 7 and Figure 7. The lowest average price was in September and the highest average price in December and April. Prices were more variable in January through May than during the remainder of the year. For the period of study, the average price of alfalfa hay paid by farmers was $43.64 per ton.
TABLE 7. ALFALFA HAY: AVERAGE SEASONAL MOVEMENTS FARM PRICES PAID, 1958-62 OF ALABAMA

Seasonal average Month Index of variation 102 103 103 104 101 99 96 96 95 97 100 104 1200
100

Index of irregularity 11 12 10 13 18 9 7 7 7 8 10 8 115
10

Price,

dollars per ton 44.35 45.00 44.85 45.45 44.25 43.05 42.15 42.15 41.35 42.35 43.60 45.20 523.75
43.64

Monthly movement Times up Times Times from down from same as High Low previous previous previous month month month Number' of times 1 2 0 3 1 0 0 0 0 0 0 4 11 1 0 0 1 3 2 4 3 1 2 1 0 18 3 6 5 4 1 1 1 4 3 7 8 6 49 6 3 4 4 6 4 5 3 4 2 1 2 44 1 1 1 2 3 5 4 3 3 1 1 2 27

January February March April May June July August September October November December
TOTAL
AVERAGE

1 See Table 1.

SEASONAL

VARIATIONS

in

PRICES

19

SEASONAL VARIATIONS in PRICES

Dollars per

Index pct. of

ton 52.0048.0044.00-

1953-62

av.

-j 120 I1O 100 90 80

4 .00 0
32.00

I

i

/

//

// I

//

//

I //

//

// I

~I I

I

///,, I

I

I

I/////

I

70

J

F

M

A

M

J

J

A

S

0

N

D

Months
Figure 7. Alfalfa Hay: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average = 100).

20

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

COTTONSEED MEAL

There was limited seasonal variation of cottonseed meal prices during the 10-year period studied, Table 8 and Figure 8. Prices varied from 5 per cent below the average in October and November to 3 per cent above the average in March and April. They were lowest when quantities were greatest in the fall. Prices were more variable during the winter cattle feeding period than in any other time of the year. The average price paid by farmers during 1953-62 was $43.83 per ton.
TABLE 8. COTTONSEED MEAL: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1953-62

Seasonal average Month Index Index aation 101 102 103 103 102 101 101 102 98 95 95 97 1200
100

Number' of times

Monthly movement

variatio

ularity

Index of irreg11 10 10 10 8 6 6 6 7 7 8 7 97
8

Price, dollars per
cwt.

Times up Times Times from down from same as High Low previous previous previous
month month month

January February March April May June July August September October November December TOTAL
AVERAGE

3.69 3.74 3.76 3.74 3.72 3.70 3.70 3.72 3.57 3.46 3.47 3.54 43.83
3.65

3 4 2 1 1 0 0 3 1 0 0 2 17

5 1 0 0 0 0 2 0 0 4 8 1 16

7 7 3 1 3 3 3 6 1 0 3 8 45

1 1 3 4 3 4 4 2 7 8 4 0 41

2 2 4 5 4 3 3 2 2 2 3 2 34

SSee Table 1.

SEASONAL

VARIATIONS

in

PRICES

21

SEASONAL VARIATIONS in PRICES

Dollars per

Index pct.of
953 -62

hundred pounds
4.404.00-1 3.60 3.20 2.80
I I I
I

av.
110

-1120

100 90 80 I
I
I

I

70

up or down from previous month

J

F

M

A

M

J

J

A

S

0

N

D

Months Figure 8. Cottonseed Meal: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

22

ALABAMA AGRICULTURAL SOYBEAN MEAL

EXPERIMENT STATION

Prices of soybean meal had very little seasonal variation, Table 9 and Figure 9. Soybean meal was cheaper during the period
of heavy production and large supply from October until March.

Prices of soybean meal were characterized more by irregular fluctuations than by regularity of the seasonal pattern. The index of irregularity indicated high variability of soybean meal prices. This variation was the greatest of all feeds purchased by farmers. Soybean meal has been the major source of protein for meat production during recent years. The average price of soybean meal paid by farmers was $4.18 per hundred pounds during 1953-62.
TABLE 9. SOYBEAN MEAL: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1953-62

Seasonal average Month Index Index of variation irregariat ularity 99 99 100 101 103 101 102 102 102 97 97 97 14 18 12 14 15 13 14 15 11 11 11 10 152 13 Price, dollars per cwt. 4.16 4.16 4.18 4.22 4.28 4.22 4.26 4.27 4.25 4.07 4.03 4.06 50.16 4.18

Number of times

Monthly movement

Times up Times Times from down from same as High Low previous previous previous month month month 4 2 0 0 2 2 0 2 2 0 0 0 14 3 1 0 0 0 0 0 0 0 2 3 3 12 3 8 4 3 5 2 5 5 2 0 4 3 39 2 4 6 4 3 3 4 4 3 9 6 2 50 5 3 0 3 2 5 1 1 5 1 0 5 31

January February March April May June July August September October November December

1200 TOTAL AVERAGE 100 SSee Table 1.

SEASONAL

VARIATIONS

in

PRICES

23

SEASONAL VARIATIONS in PRICES

Dollars per hundred pounds 4.80

Index pct. of

1953-62 av.

-] 120

F.4
4.00F
3.6 0 3.20

110 100 90 80

Ifp --I Times up or down from i 10 9 8 7 6 Times up 5
i
3.6 2.2

I , ImIon-

I
///////////////month/~;///

-n- I

%//////////I I

I//

70 l0 9 8 7 6 5
4

previous//

--- I

RI
55 7 8
10

3 2

Times down

7 8
10

J

F

M

A

M

J J Months

A

S

0

N

Figure 9. Soybean Meal: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 100). 1953-62 (10-year average

24

ALABAMA

AGRICULTURAL EXPERIMENT STATION

LAYING MASH

Prices paid for laying mash varied less than 5 per cent within the year. The changes that did occur were in the form of a slight rise during the summer and a slight drop between August and December, Table 10 and Figure 10.
Prices paid for laying mash were relatively stable from one

year to the next. Ample supplies of storage grain plus price support programs contributed to the year to year stability in price. Prices used were those reported by the Crop Reporting Service in dollars per hundred pounds. Quoted bulk prices were not
available.
TABLE 10. LAYING

MASH:

AVERAGE SEASONAL MOVEMENTS FARM PRICES PAID, 1953-62

OF ALABAMA

Seasonal average Month Index Index of Price, dollars per cwt. 4.86 4.86 4.84 4.86 4.86 4.88 4.86 4.86 4.82 4.75 4.70 4.72 57.85
4.82

variation irregularity ariation January February March April May June July August September October November December TOTAL
AVERAGE
1

Monthly movement Times Times of times Times up from down from same as High Low previous previous previous month month month Number' 4 2 2 2 2 3 2 3 2 0 0 1 23 4 2 1 0 1 0 0 0 0 2 5 5 20 4 2 2 3 4 2 1 2 0 1 0 4 25 1 2 2 1 5 0 4 1 5 8 7 2 38 5 6 6 6 1 8 5 7 5 1 3 4 57

101 101 100 101 101 101 101 101 100 98 97 98 1200
100

9 8 8 8 8 7 7 7 6 6 6 6 86
7

See Table 1.

SEASONAL

VARIATIONS

in

PRICES

25

SEASONAL

VARIATIONS in PRICES

Dollars per hundred pounds
4.80

Index pct. of 1953 -62 av.

d]
Ire I

110

4.40 4.00

w

II

I

I

---I I

100 90 80 I0

A~~I //////////1///////////'//////~111/~~~///

AL

lot

I

I F M

I A

I

I M J

I J A Months

I S

I 0

I N

1

1

J

D

Figure 10. Laying Mash: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama,

1953-62 (10-year average

-

100).

26

ALABAMA AGRICULTURAL EXPERIMENT STATION BROILER MASH

Average price quotations for broiler mash showed that there was a 3 per cent variation within the season during the period 1953-62, Table 11 and Figure 11. Continuous demand for feed and availability of basic feed in-

gredients at fairly uniform prices contributed to the stability of broiler mash prices. Prices paid for broiler mash in Alabama were approximately 17 per cent lower in 1962 than in 1953. Most of the drop in prices occurred in 2 years and did not affect the pattern of seasonal prices during the 10-year period. Prices used were those reported by the Crop Reporting Service in dollars per hundred pounds. Quoted bulk prices were not available.
TABLE 11. BROILER MASH: AVERAGE SEASONAL MOVEMENTS FARM PRICES, 1953-62 OF ALABAMA

Seasonal average Month Index variation January February March April May June July
August

Number' of times

Monthly movement

Index ur of ularity 8 8 7 7 8 7 7
7

irreg-

Price, dollars cwt. per cwt. 5.02 5.03 5.05 5.06 5.06 5.04 5.083
5.02

Times Times up Times from down from same as High Low previous previous previous month month month 4 2 3 2 8 2 3
2

100 100 101 101 101 101 101
100

3 1 1 0 0 0 2
0

4 3 4 2 8 3 2
3

2 3 3 3 2 4 3 8 5 4 7 4 43

4 4 3 5 5 3 5
4

September October November December TOTAL
AVERAGE

100 99 98 98 1200
100

6 6 5 6 82
7

4.98 4.94 4.88 4.89 60.02
5.00

1 1 0 1 24

0 2 4 2 15

2 1 2 4 33

3 5 1 2 44

See Table 1.

SEASONAL

VARIATIONS

in

PRICES

SEASONAL VARIATIONS

in PRICES

Dollars per hundred pounds

Index pct. of
1953-62

5.50k 5.00k 4.50
nP
C V V

I-1
27

av.

100
90

L-

I
I

I
I

I
I I

I
I

I
1

I
I

I
I

I
I

I
I////////

~--80

J

F

M

A

M

J

J

A

S

0

N

D

Months Figure 11. Broiler Mash: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

28

ALABAMA MIXED DAIRY

AGRICULTURAL EXPERIMENT STATION

FEED, ALL FORMULAS

There was almost no variation in seasonal prices of mixed dairy feed, Table 12 and Figure 12. Price variability was very small. Differing seasonal variations and normal fluctuations of ingredients of dairy feed tended to offset one another, which resulted in low seasonal variation and year to year variation. The average price for mixed dairy feed paid by farmers was

$3.90 per hundred pounds during the period of study.
TABLE 12. MIXED DAIRY FEED, ALL FORMULAS: AVERAGE SEASONAL MOVEMENT OF ALABAMA FARM PRICES PAID, 1953-62

Seasonal average

Number

Monthly movement

Month

Index

Index of

Price, dollars per cwt. 3.92 3.94 3.95 3.92 3.92 3.90 3.90 3.88 3.86 3.84 3.84 3.86 46.76
3.90

irregvariation ularity
January February March April May June July August September October November December TOTAL
AVERAGE

Times Times Times up from down from same as High Low previous previous previous month month month of times 2 4 4 2 1 1 2 1 0 0 0 2 19 1 2 0 1 0 0 0 2 2 3 3 5 21 6 4 4 0 2 2 1 2 2 3 3 5 34 1 1 2 4 4 4 3 4 6 4 4 3 38 3 5 4 6 4 4 6 4 2 3 3 2 48

101 101 101 101 100 100 100 100 99 99 99 99 1200
100

6 6 6 6 6 5 5 5 5 5 5 4 62
5

SSee Table 1.

SEASONAL

VARIATIONS

in

PRICES

29

SEASONAL VARIATIONS in PRICES

2

Dollars per hundred pounds

MIXED DAIRY FEED, ALL FORMULAS
Index pct.of 1953-62 av.

4001F
3.60k
Times up or down from previous month 10k

8
0

65432I-

J

F

M

A

M

J

J

A

S

0

N

D

Months Figure 12. Mixed Dairy Feed, All Formulas: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

30

ALABAMA AGRICULTURAL

EXPERIMENT STATION

CROPS CORN Prices received for corn were lowest in October, November, and December and highest during late spring and summer, Table 13 and Figure 13. The increase in average price from November to June was 26 cents per bushel. The average seasonal price increase from fall to summer was probably sufficient to cover costs of storage, if corn were stored properly and insects and rodents were controlled. The price of corn was low during harvest and concentrated selling-October, November, and December. Beginning in December the price gradually rose through June, declined slightly in July and August, and then sharply dropped to a low in 3 months. Corn prices had the greatest average index of irregularity of any of the crops. The average price during the 10-year period was $1.34 per bushel. During 1953-62, sales of corn accounted for 3.1 per cent of the total cash farm income in Alabama. More acres of cropland in Alabama were planted in corn than were planted in any other row crop.
TABLE 13. CORN: AVERAGE SEASONAL MOVEMENTS OF ALABAMA FARM

PRICES, 1953-62

Seasonal average Month Index Index Index of irregvariationularity 98 102 105 105 106 107 107 105 97 90 88 90 1200
100

Number' of times

Monthly movement Times same as previous month 0 0 0 1 2 1 2 1 0 0 1 1 9

Price, dollars per bushel 1.32 1.37 1.40 1.41 1.42 1.44 1.43 1.41 1.31 1.21 1.18 1.21 16.12
1.34

Times up Times from down from High Low previous previous High Lw month month 0 0 2 1 4 5 1 3 0 0 0 0 16 2 0 0 0 0 0 0 0 0 3 7 1 13 9 10 9 7 8 5 2 8 0 0 2 9 64 1 0 1 2 0 4 6 6 10 10 7 0 47

January February March April May June

July
August September October November December TOTAL
AVERAGE

21 19 18 17 17 17 17 15 14 14 14 13 196
16

SSee Table 1.

SEASONAL

VARIATIONS

in

PRICES

31

SEASONAL VARIATIONS in PRICESO

Dollars per bushel

Index pct. of 1953-62 av.
S120

1.451.30-

110 100
90

80 1.00
I I I I I I

Times up or down from previous month ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, 10 9

70 I0 9 8 7 6 5
4

7

6 Z

Times up

2Hi
0

5

3 2
0
Li rli

5Times 66 8 9
It(i I

down5 8 9 1 A S 0 N D

I

i

J

F

M

A

M

J J Months

Figure 13. Corn: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average - 100).

32

ALABAMA AGRICULTURAL EXPERIMENT SWEETPOTATOES

STATION

Prices received for sweetpotatoes showed a 21 per cent increase from November to the following August as an average for the 1953-62 period, Table 14 and Figure 14. In 7 of the 10 years, the lowest price occurred in November; and in all 10 years, the price increased from November to January. Harvesting and heavy marketings during the fall accounted for the decline in prices. Afterward, the price rose gradually, followed by a slight decrease in June and July. Apparently, the lack of demand for sweetpotatoes during those months was responsible for the decrease in price. The average price of sweetpotatoes during the period studied was $4.88 per hundred pounds.
TABLE 14. SWEETPOTATOES: AVERAGE SEASONAL 2 Number MOVEMENTS OF ALABAMA

FARM PRICES, 1953-621

Seasonal average Month
Index

Monthly movement
Times up Times Times

Index variation

Index

of

dollars per bushel 4.89 4.98 5.03 5.09 5.16 5.02 5.07 5.19 4.80 4.46 4.30 4.57 58.56
4.88

Price,

of times

irregularity 12 18 13 13 13 15 11 7 11 10 9 8 135
11

from down from same as High Low previous previous previous month month month 2 1 0 1 2 1 2 3 0 0 0 0 12 0 0 0 0 0 1 0 0 0 2 7 1 11 9 6 5 5 5 1 2 6 0 0 2 10 54 0 3 2 3 4 4 3 8 8 10 7 0 47 1 1 3 2 1 3 2 1 2 0 1 0 17

January February March April May June July August September October November December TOTAL
AVERAGE

100 102 103 104 106 108 104 106 98 92 88 94 1200
100

1 No price was reported in June of 1961 and 1962. 2See Table 1.

SEASONAL

VARIATIONS

in

PRICES

33

SEASONAL VARIATIONS in PRICES

Dollars per

hundred pounds 6.00k

Index pct. of 953-62 av. I 20

5.505.004.504.00I

110 100 90
80
I
I I I

I

I

I

I

I

70 10

loj-~5~
J

1 F M

I

I

I

-ito

I

~
O N D

A

M

J Months

J

A

S

Figure 14. Sweetpotatoes: Average monthly price and index numbers of prices received with area of ranges, and changes in price from previous month, Alabama,
1953-62 (10-year average

-

100).

34

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

SOYBEANS

Soybean prices were lowest in the fall (November lowest month) and highest in April, May, and June, Table 15 and Figure 15. The seasonal price change was greater for soybeans than for any other storable grain during 1953-62. Prices increased 19 per cent from November to May as an average for the 10-year period. This amounted to a 40-cent per bushel price increase. The average price for the period of the study was $2.32 per bushel. Storing soybeans can make increased profits possible from this crop. In such case, all expenses must be evaluated and compared carefully with the expected seasonal price increase. These expenses include building or bin costs, possible losses in quality, insect and rodent control, and labor and machinery costs for placing soybeans in storage and moving them out. Soybeans is an important cash crop in Baldwin, Escambia, and Mobile counties, and in areas around Guntersville and Decatur. The crop brought Alabama farmers 1.1 per cent of their total cash farm income during 1953-62. However, soybeans accounted for a high proportion of the cash income of many farmers in the major soybean producing areas.
TABLE 15. SOYBEANS: AVERAGE SEASONAL MOVEMENTS FARM PRICES, 1953-62 OF ALABAMA

Month

Seasonal average Price, Index Index of dollars of per variation irregbushel ularity 97 101 104 107 110 107 103 99 95 92 92 93
1200
100

Monthly movement Num]berg Times Times nes Times up of tin from down from same as High Low previous previous previous month month ow month 0 3 3 5 8 3 1 1 0 0 0 1 25 2 0 0 0 0 0 0 0 2 3 3 1 11 7 7 6 6 3 1 0 0 0 3 5 4 42 1 0 1 0 0 6 9 4 9 7 3 1 41 2 3 3 4 7 3 1 6 1 0 2 5 37

January February March April May June July August September October November December
TOTAL
AVERAGE

12 12 13 13 14 13 13 9 9 8 13 12 141 12

2.24 2.34 2.42 2.49 2.54 2.50 2.39 2.30 2.21 2.14 2.14 2.16 27.86 2.32

1 See Table 1.

SEASONAL

VARIATIONS

in

PRICES

35

SEASONAL VARIATIONS in PRICES

Dollars per bushel
2.80k

Index pct. of 1953-62 av. 120 110

2.60 240 2.20 2.00k

1.80
I I I

70

up or down from previous month

J

F

M

A

M

J

J

A

S

0

N

D

Months Figure 15. Soybeans: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average - 100).

36

ALABAMA AGRICULTURAL EXPERIMENT OATS

STATION

The seasonal price pattern for oats, 1953-62, was characterized by relatively low prices in June through September, Table 16 and Figure 16. The highest price occurred in January. In 9 of the years, the September price increased over the price for the previous August. Price usually declined from February through July, with the sharpest drop occurring in May and June. Oats was grown principally as a feed and seed crop on Alabama farms. Most of the oats that left the farm on which grown was sold directly from the combine or during oat planting season.

Seasonal price rise usually was inadequate to justify storage
facilities when used only for oats. The 10-year average price was

89 cents per bushel.
TABLE 16. OATS: AVERAGE SEASONAL MOVEMENTS OF ALABAMA FARM PRICES, 1953-62

Month

Seasonal average Price, Index Index of dollars of per variation irregbushel ularity 106 106 105 104 102 93 91 93 97 100 102 101
1200
100

Monthly movement Times up Times Times from down from same as High Low previous previous previous month month month Number' of times 6 5 1 1 0 0 0 0 0 1 1 1 16 0 0 0 0 0 2 8 3 0 0 0 0 18 7 3 1 1 1 0 1 7 9 7 6 3 46 1 3 5 6 7 10 6 2 0 1 1 5 47 2 4 4 3 2 0 3 1 1 2 3 2 27

January February March April May June July August September October November December
TOTAL
AVERAGE

14 13 12 13 13 8 8 9 9 9 9 8 124 10

.95 .94 .94 .92 .91 .83 .82 .83 .86 .89 .91 .90 10.68 .89 ~riilnrL

'See

Table 1.

SEASONAL

VARIATIONS

in

PRICES

37

SEASONAL VARIATIOS

in PRICES3

Dollars per bushel

1953 -62 av. S120 110 100 90 80
I I_ I I I I I I

I. I0K

100l

0 .9 h
.80-

.7k 0
I

70
10

J

F

M

A

M

J J Months

A

S

0

N

0

Figure 16. Oats: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

38

ALABAMA AGRICULTURAL EXPERIMENT HAY

STATION

Prices received by farmers for hay varied from 6 per cent above the average in March to 5 per cent below average in August and September. In January, during the entire 1953-62 period, hay prices increased over the previous month. Changes in hay prices were gradual from season to season, Table 17 and Figure 17. Extremely high prices occurred only during severe winters or following a poor crop year. Hay prices were for baled hay of all kinds. Peanut and johnsongrass hay were the most important kinds sold until the last few years. The volume of peanut hay has been declining. A portion of the peanut hay is being replaced with Coastal bermuda hay. The average price of hay during the period of study was $25.29 per ton.
TABLE 17. HAY: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1953-62

Index

Month

Number' Monthly movement Seasonal average Times Index Price, of times Times up Times nOfex of dollars from down from same as previous previous ioirregperprevious ularity ton High Low month month month 11 12 12 13 13 8 8 7 8 10 10 9 122 10 26.33 26.61 26.87 26.28 25.66 24.86 24.31 24.06 24.05 24.27 24.81 25.37 ~rw~ 803.48 25.29 1 1 4 0 0 0 0 0 0 0 0 4 10 1 0 0 0 1 1 1 2 1 3 1 0 11 10 6 6 0 1 2 2 2 6 4 9 9 57 0 3 4 10 8 7 8 6 4 5 1 1 57 0 1 0 0 1 1 0 2 0 1 0 0 6

January February March April May June July August September October November December
TOTAL
AVERAGE
1

104 105 106 104 102 98 96 95 95 96 98 101
1200
100

See Table 1.

SEASONAL

VARIATIONS

in

PRICES

39

SEASONAL VARIATIONS in PRICES

Dollars per ton

_Index pct. of 1953 -62 av. 120

27.00

I 10 100
90

24.00k
I
18.00 ,r !

80
I-1I
1

I

I

I-

-'/

0 0

Times up or down from previous month 10 99 8 7 6 F. Times up
5 4 3
. ... .* .3 . ..

8 6
5 4

2.

2

3

.3

s 4 5

4 5

7
8
.8

Times
II I I I

down

7

9 10-

9
I
I I

I

I

C

J

F

M

A

M

J

J

A

S

0

N

Months Figure 17. Hay: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average= 100).

40

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

WHEAT

Wheat prices in the 1953-62 period were lowest during June through October, Table 18 and Figure 18. The seasonal price rise from harvest time until February was 9 per cent as an average for the 10 years. The lowest average price occurred in July. Generally, the price started declining in April and continued through July. Prices in October and November showed a change from previous month in only 3 of the 10 years. The average seasonal price rise of 16 cents per bushel was hardly enough to cover storage costs in most instances.

The average price of wheat during the period of study was $1.86 per bushel. The variability of price about the average was relatively small.
TABLE 18. WHEAT: AVERAGE SEASONAL MOVEMENTS OF ALABAMA

FARM PRICES, 1953-62 Seasonal average Price, Index Index of dollars of per variation irregularitv bushel 103 103 104 1083 102 97 95 96 98 7 7 7 7 6 3 3 4 4 5 4 5 61 5 1.92 1.93 1.93 1.92 1.91 1.81 1.77 1.78 1.83 1.82 1.86 1.89 22.38 1.86 20 Monthly movement Times up Times Times from down from same as High Low previous previous previous month month month Number of times 1 1 1 1 1 1 6 4 0 0 0 0 16
1

Month

nuary F ebruary M arch
Ja

A pril M ay Ju me

Ju Lly

A ugust eptember SE October 01 98 November 100 December 101 TOTAL 1200 AVERAGE 100
1

5 3 5 2 1 1 0 6 10 1 1 6
46

9 3 0 2 2 1 39

1 1 0 7 7 3 35

See Table 1.

SEASONAL

VARIATIONS

in

PRICES

41

SEASONAL VARIATIONS in PRICES

4

WHEAT
Dollars per bushel 2.001 1.850
1.70-

Index pct. of 1953 -62 av,

1.55-80 Times up or down from previous month 10 9 8 7 6 Times up
5 4

10 9 8 7

3

i3

....... H ... 33 4 66 7 8 9 10 J F 5Times

N

2 4 down 6 7 8 9 10

M

A

M

J

J

A

S

0

N

D

Months Figure 18. Wheat: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62
(10-year average

-

100).

42

ALABAMA

AGRICULTURAL EXPERIMENT

STATION

PEANUTS

Prices received by farmers for peanuts showed very little sea-

sonal variation during 1953-62, Table 19 and Figure 19. Also, the
variability of price about the average monthly price was comparatively small. Normally, few peanuts are sold by farmers between January and the following harvest period. Prices during the season of

few or no sales are indications of what dealers would be willing to pay if peanuts were available for purchase. Therefore, prices during this season probably reflect those that prevailed at the end of the marketing season. Average price during the period of study was 10.3 cents per pound. Alabama farmers, primarily those in southeastern Alabama, received 11 to 23 million dollars annual income from peanuts during 1952 through 1961. Income from the sale of peanuts accounted for 3.9 per cent of the total cash farm income during those years.
TABLE 19. PEANUTS: AVERAGE SEASONAL MOVEMENTS FARM PRICES, 1953-621 OF ALABAMA

Seasonal average Month Index Month Index of of variationrregularity 98 101 99 101 104 104 103 99 98 97 98 98 1200
100

Number2 of times

Monthly movement

Price, cents per pound 10.1 10.4 10.2 10.4. 10.7 10.7 10.6 10.2 10.1 9.9 10.0 10.1 123.4
10.3

Times Times Times up from down from same as High Low previous previous previous month month High Low month 2 0 3 5 1 0 0 1 0 1 1 3 17 3 1 1 1 1 1 1 2 0 3 4 2 20 4 4 2 3 0 0 0 1 3 3 3 6 29 1 1 0 1 0 1 1 3 5 5 3 2 23 5 1 4 4 5 4 4 1 1 2 4 2 37

January February March April May June July August September October November December TOTAL
AVERAGE

7 6 8 6 5 4 4 4 7 9 9 8 77
6

SNo price was reported in February of 1958, 1959, 1960 and 1962; March of 1958 and 1962; May, June and July of 1958-1962; and August of 1960.
2

See Table 1.

SEASONAL

VARIATIONS

in

PRICES

43

SEASONAL VARIATIONS in PRICES

Cents per pound

Index pct. of 953 -62 av.

110
105
100
90

9.5

II

I

I

I

I

80

J

F

M

A

M

J

J

A

S

0

N

D

Months Figure 19. Peanuts: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average - 100).

44

ALABAMA AGRICULTURAL EXPERIMENT COTTON

STATION

Prices received by Alabama farmers: for cotton showed little seasonal variation during the period 1953-62, Table 20 and Figure 20. The price of cotton was only 4 per cent above average in September, the month of highest price, and 3 per cent below the average in December. The total spread in price was 7 per cent. An average price of 32.8 cents per pound prevailed during the 10year period. Cotton was the major source of income for Alabama farmers. From 1953 through 1961, sales of cotton (lint only) accounted for 26.3 per cent of the total cash farm income of Alabama farmers. Cotton and cottonseed accounted for 28.8 per cent. Prices of cotton did not vary greatly because of relatively stable price support programs.
TABLE

20.

COTTON:

AVERAGE

SEASONAL

MOVEMENTS

OF

ALABAMA

FARM PRICES,

1958-62

Seasonal average Month Index of variation variation 98 99 99 99 100 101 101 103 104 101 98 97 1200 100 1. Index of irregularity 5 5 4 4 3 3 3 2 3 5 5 6 48 4 Price, cents per pound 32.1 32.4 82.6 32.7 32.8 33.0 33.2 33.8 34.2 33.1 32.83 31.9 394.1 32.8

Number' of times

Monthly movement

Times up Times Times from down from same as Low previous previous previous High month month month 0 0 0 0 0 1 1 2 5 1 0 0 10 4 2 1 1 0 0 0 0 0 0 1 5 14 5 5 6 4 4 6 5 7 6 1 0 1 50 3 1 1 2 2 2 3 3 4 9 10 7 47 2 4 3 4 4 2 2 0 0 0 0 2 23

January February March April May June July August September October November December
TOTAL AVERAGE

1 See Tal ale

SEASONAL

VARIATIONS

in

PRICES

SEASONL~ VAR-IATIONS in PRICS4

45

Cents per

COTTON
Index pct. of 1953 -62 av.
I10

pound

33.0

00 90
-II I f

. 30027.0 109830 27

Times up or down from previous

month-

s0
10 9 8

6

7

Times up

7

i

2 yresu o iu
6

3

or
Times down
8 A S

:

-rmyeiu

4
6
7 99 0 J F

: H H H

6 5 4 3 2

ii :::: ~i ?I!

7 8 90 0 N D

M

A

M

J J Months

Figure 20. Cotton: Average monthly price and index number of prices received with area of ranges, and change in price from previous month, Alabama, 1953-62 (10-year average = 100).

46

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

46

ALABAMA AGRICULTURLEPIMNSTIO

CHANGES IN SEASONAL PRICE PATTERNS BETWEEN 1948-54 AND 1953-62 In order to make comparisons, the monthly index of prices received by Alabama farmers for 13 farm commodities was calculated for the period 1948-54. Methods similar to those used in

calculating monthly indexes for 1953-62 were used in arriving at the 1948-54 seasonal pattern of prices.

I
Index
110l 100R

LIVESTOCK AND LIVESTOCK PRODUCTS1
Irex
Hogs
"..1948-54 Beef
.. *~***-..948-54

Cattle
'",

110
100

.~1953 -62

1953-62

90
80.
I II I I I I I I I I I
_SO

Index
MilK 110 100 90
"1948-54 .. "

Broilers

10 10(953-62
100
198-54

1953-62

90

80
J F MA MJ J ASON D J FM A MJ J A SON D
index

120[-Eggs Ilo100 90 80 7 .1l
v

1953-62

.1948-54
L

I

n

J- I

1

I

I

I

I

I

1I
D

I

J F M AMJ

J A SON

Figure 21. Comparison of seasonal price patterns for selected livestock and livestock products, Alabama (1 948-54 and 1953-62= 100).

SEASONAL VARIATIONS in PRICES

47

CROF
Index

7F 953-62 ;1*~T~
Inuex

Corn

to

1

1953-62
""

I

I%

)0

.*..""''1948-54

Index
".

Wheat
1953i948-54

90-

0090 Index
00

100

Index
9 5

ea

1953-62 1948-54""

Oats

910-""

190

90
rnu~~x8 .....
Hay

1 11

1 111

I

I

I

I Ii

*00I....

1948-54

Index
"".0

"9""6 Indx
100

195 3 -626

Sweetpotatoes 1948-54 .
90

ay100

1948-54
i953-62

908cO1
J FMAMJ JASON D J

F M AM JJASOND

Figure 22. Camparison of seasonal price patterns for selected crops, Alabama 100). (1948-54 and 1953-62

With the exception of prices for a few commodities,

price patterns for the two periods were quite similar, Figures 21 and 22. Prices of all livestock and livestock products except broilers changed less seasonally in the 1953-62 period as compared with the 1948-54 period. This can partially be accounted for by more
stable feed prices, improved production and marketing plus more uniform sales.

seasonal

tion

informa-

For the 1953-62 period, cotton prices peaked in September, which was 3 months later than the earlier period. Seasonal variations in prices of wheat, oats, and hay were almost identical during both time periods.

48

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

For peanuts, seasonal price variation was greater in the 195362 period than in the earlier period, and high and low price months shifted more inversely with seasonality of sales. The magnitude of seasonal price change of corn increased during the later period. Seasonal price patterns for soybeans during both periods were relatively similar, but seasonal price change was less in the later period. There was greater seasonal price change for sweetpotatoes in the 1953-62 period. SUMMARY AND CONCLUSIONS Prices received by farmers changed considerably more within the year than did prices paid by farmers. Changes in average prices for farm commodities sold, except cotton, wheat, and peanuts, amounted to more than 10 per cent from the month of lowest to the month of highest prices. Prices of commodities purchased by farmers increased less than 10 per cent from the lowest to highest months of prices. The following table is based on monthly average prices received or paid by Alabama farmers during the 10-year period, 1953-62.
Commodity Eggs Broilers Beef cattle Milk Calves Hogs Alfalfa hay Cottonseed meal Soybean meal Laying mash Broiler mash Dairy feed Corn Sweetpotatoes Soybeans Oats Hay Wheat Peanuts Cotton Percentageincrease from month of lowest to month of highest average price 24.1 22.4 16.3 15.8 14.6 14.0 9.9 8.5 6.3 3.7 3.7 2.7 21.5 20.8 19.2 16.4 11.7 9.4 8.1 7.2

Eggs, compared with other commodities, showed the greatest seasonal change in price. Cotton and peanuts, Alabama's most

SEASONAL

VARIATIONS

in

PRICES

49

important crops from a cash farm income standpoint, showed little seasonal change in price during the 10-year period. This price stability resulted, at least in part, from the government price-support and storage programs. Livestock and livestock products, particularly beef cattle, as well as certain crops, such as soybeans, corn, and small grains, are becoming more important to Alabama farmers as sources of direct or indirect farm income. The seasonal price patterns of several of these commodities indicate that considerable effort is justified on the part of farmers to, adjust production and/or marketing in order to receive the highest possible seasonal price. For crops, lowest seasonal prices usually occurred during or shortly after harvest season. In the case of livestock and livestock products as well as that of crops, various supply and demand factors must be considered in accounting for the seasonal pattern of prices. Supply and demand factors and their relative importance change with the passage of time. The price patterns as presented for various commodities give an indication of the seasonal pattern that may be expected in the future. Producers who are taking the risk of producing to sell during out-of-season high-price periods may be penalized by stabilization of prices. Other producers who adjust production for least cost and who may sell when prices are lowest benefit from the higher support prices. The first group of producers probably would not like this and would soon be following the practices of the second group, thus increasing the seasonal variation. This important relationship should be considered in establishing, administering, and adjusting government price-support programs. Although seasonal price patterns may serve well as guides, the many price-making forces: must be watched constantly by farmers. Several things that farmers can do to take advantage of seasonal prices are: 1. Become familiar with the entire marketing system through which their products move. 2. Make adjustments in numbers of livestock and poultry, or size of other enterprises, to obtain greatest returns. 3. Consider putting into practice a breeding program that takes into account the seasonal price pattern of products produced, but at the same time consider additional costs that might result from a different breeding program.

50

ALABAMA AGRICULTURAL EXPERIMENT STATION

4. Make adjustments in the amount and kind of feed used. 5. Time the purchases of cattle, hogs, sheep, and poultry to take advantage of low seasonal prices. Likewise time the sale of livestock and poultry to take advantage of high seasonal prices. 6. Consider the storage of farm commodities that lend themselves to storing and for which there is considerable seasonal variation in prices. The material and charts presented will serve only as guides by which farmers can plan their operations. This information should not be used alone in making decisions. It can be most helpful when used along with other information available on production and marketing for each particular commodity and in each area of the State. Making adjustments on the basis of a historical, seasonal price pattern does not guarantee increased profits. Seasonal price patterns result from the forces of supply and demand peculiar to a given season and product. Sometimes the result is not as expected. Sales that result in the greatest net returns may or may not be those made during the season of highest commodity price. As more and better price information is published and producers grow more familiar with its use, efforts to adjust the quantity and quality of products to market demands within the year will prove less difficult and more profitable.

SEASONAL

VARIATIONS

in

PRICES

51

APPENDIX
RELIABILITY OF SEASONAL PRICE PATTERNS

The seasonal price patterns calculated for the period 1953-62 were similar to, those that prevailed during 1948-54 for most of the commodities studied. Seasonal price patterns do not change rapidly. Many of the seasonal demand factors such as eating habits of consumers change rather slowly. However, seasonal quantities of commodities, such as broilers and eggs, can be changed fairly rapidly. These changes may result in slightly different seasonal price patterns than those presented. Producers who are aware of the number of chicks placed on farms as well as other key factors that will later affect prices of broilers and eggs, can make proper adjustments in their operations to take advantage of indicated seasonal production and prices. Furthermore, a certain amount of error can be expected in estimating the seasonal level of prices for any farm commodity. However, this error, based on past monthly price variation, can be measured. Indexes of irregularity were calculated as a measure of variation from the monthly average prices presented in the tables. These indexes actually measure in percentage the average amount that individual monthly prices differed from the monthly average price as presented. Here is an example illustrating use of the indexes of irregularity: For March, the index of irregularity of beef cattle prices was 21 (21 per cent), Table 3. This means that average prices in March during the 10 years varied from 21 per cent above $16.39 per hundred pounds to 21 per cent below. The seasonal index of price variation for beef cattle was 106 in March. If the average price of beef cattle was estimated to be $16.00 per hundred pounds in a future year, the March price could be estimated as $16.96 per hundred pounds, or 6 per cent above the average price. The index of irregularity for March means that beef cattle prices might vary 21 per cent from the monthly average. In fact, based on historical data presented, two-thirds of the time prices as estimated for the month of March would fall between $13.40 and $20.52 ($16.96 minus 21 per cent and $16.96 plus 21 per cent). By a similar process, based on historical variation in prices, expected prices can be estimated for a given month through use of the seasonal index of price variation and the index of irregularity.

52

ALABAMA AGRICULTURAL EXPERIMENT

STATION

The price ranges are shaded on Figures 1 through 20. A relatively good estimate of expected price can be obtained from these figures. However, price patterns and levels change. When this occurs, the moist recent data are used in estimating price. During the 10-year period 1953-62, prices of certain commodities varied more from the monthly averages than others. As shown in the following table, prices of cotton, wheat, peanuts and milk varied less than 10 per cent from monthly average prices. However, beef cattle, calves, and broilers showed approximately 25 per cent variation. Therefore, estimates of seasonal prices for these three commodities, based on historical data, could not be as precise as price estimates for the other commodities. Soybean meal was the only commodity purchased for which the price varied more than 10 per cent from monthly average prices.
Commodity Broilers (1958-62) Calves Beef cattle Hogs Corn Broilers (1958-62) Soybean meal Soybeans Sweetpotatoes Oats Eggs Hay Alfalfa hay Cottonseed meal Laying mash Broiler mash Peanuts Dairy feed Wheat Milk Cotton Average index of irregularity 25.0 24.6 24.2 17.4 16.4 12.9 12.7 11.8 11.1 10.4 10.2 10.2 9.6 8.1 7.1 6.9 6.0 5.2 5.1 4.3 4.0

SEASONAL VARIATIONS in PRICES
APPENDIX TABLE 1. BROILERS: AVERAGE SEASONAL MOVEMENTS

53
OF ALABAMA

FARM PRICES, 1958-62

Month

Index of variation
---------

Seasonal average Index of irregularity
10

Price, cents per punuid
16.6

January

February -.-------------------------M arch -------------------------------April---------------------------------May ----------------------------------- " June-----------------July----------------- August---------------September-------------

108 110 112 103 102 101 99 96
93

10

16.9

12 12 17 20 18 14
13

17.1 15.8 13.6 15.5 15.2 14.7
14.3

October--------------November------------December------------TOTAL-------------AVERAGE
.-----------

90 90 96 1200
100

12 9

7
154
13

13.8 13.9 14.8 184.2
15.3