Index

4

10 0
" .
...

:

90 J F M A M J J A SO0N D

BULLETIN 385 NOVEMBER 1968

e1nani.

oj~

SEASONAL PRICE VARIATIONS

G11 Selected
FIVE- AND TEN-YEAR BASE PERIODS

Agricultural

Experiment

Station

-

A UB U RN
E. V. Smith, Director

UN IVE R SI TY
Auburn, Alabama

CONTENTS
Page
METHOD OF STUDYLIVESTOCK - --

5

AND LIVESTOCK PRODUCTS-6

Bro ile rs - - - - - - - - - - - - - - - - - - - - - - - - - - - - - =

- 6 - 10 - 12
-

E gg s--------------------------------------- -------8
Ho g s -- - - - - - - -- - - - - - - -- - - - -- - -- - - - - - - -- - - - - - - -- - - -B eef C attle ---C alv e s

--- -- - - -- -- - - --- --- ---

--- - --

---- - - - - - - - - - - - -- - - - - - - - - - - - - - -

14 - 16

Milk -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - FEEDS PURCHASED---

18---- 18
-20

Broiler M ash ------

------

-----------------

------

-----------

---

Laying M ash ------------

M ixed Dairy Feed-------------------C ottonseed M eal--Soybean Meal26---------

--

-22 -24

-- -- -- --- -- -- -- --- -- - - -

C ROPS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

C on r

- 28

- - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - -2

8

Whe at-- - - - - - - - - - - - - - - - - - --- - -- - - - - - - - - - - - - - - - - - -- - - 3 0
O ats -- - - - - - - - - - - - -

- - - - - - --- -- - - - - - - - - - - - - - - - - - -- -- - 3 2

S o ybe ans - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - 3 4 Co tton - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - -3 Hay -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -3 8
RELIABILITY OF SEASONAL PRICE PATTERNS ---------------CHANCES IN PRICE LEVELS AND PRICE PATTERNS -----------

6

40 41

Changes in Price Levels Changes in Price Patterns ---------------SUMMARY AND CONCLUSIONS -----------------------------

41-------------------- 42

45

FIRST PRINTING

3M,

NOVEMBER

1968

Comparison of Seasonal Price Variations of Selected Alabama Farm Commodities
FIVE- AND TEN-YEAR BASE PERIODS

S. C. MASSINGILL, Formerly

Instructor of Agricultural

Economics

MORRIS WHITE, Professor of Agricultural Economics

highly seasonal - nature dictates that it be so. Although products like broilers, eggs, and milk are produced throughout the year, quantities are much greater during certain seasons. Peaches and strawberries are examples of products with extremely short harvest periods. Other products, such as turkeys, have traditionally had a highly seasonal demand. Because of seasonal variation in volumes marketed and in quantities demanded, there is also seasonal variation in prices. Prices of agricultural commodities should be expected to be higher in some months than in others. Costs are usually less when commodities are marketed directly from the field rather than placed in storage and sold later. Charges for handling, insurance, and storage are incurred when marketing is delayed. Most agricultural commodities are sent to market in greater volumes at harvest time, and the offering of large quantities for sale results in depressed prices. As prices are depressed, some commodities are placed in storage (assuming they are storable). When the heavy marketing period ends and smaller quantities are placed on the market, prices normally begin to rise. Theoretically, the rise in price throughout the low-volume marketing period should only equal costs associated with storage. Consequently, prices of perishable crops can be expected to flucAGRICULTURAL PRODUCTION is

MOST

4

ALABAMA AGRICULTURAL

EXPERIMENT STATION

tuate seasonally more than prices of more durable (storable) crops. Crops such as fresh peaches and strawberries cannot be withheld from the market during periods of heavy shipments when prices are low and stored for several months until shipments become lighter and prices rise. Durable commodities like wheat, cotton, and corn can be stored at comparatively low costs; therefore, seasonal price fluctuations are comparatively less for these commodities. Government price support and storage programs have been important factors in reducing wide seasonal changes in prices of certain storable commodities. Under these programs, government purchases and loans are made at harvest when greatest quantities are available for sale by producers. Amounts placed in storage at harvest time may be released later when marketings by producers slacken. This action prevents prices from rising to the level they otherwise would reach during the normal non-marketing season. Too, government price support programs for storable commodities tend to hold prices up during the years of large crops and to hold prices down in years of small crops. The level of prices paid and received by farmers greatly influences returns to farming, and therefore is a key factor in determining the financial success or failure of a farm operation. Significance of the relationship between prices received and prices paid increases as cash expenditures for items of production comprise a greater proportion of total costs. Prices that may be expected to prevail at the time farm commodities will be sold are important in making decisions about changing enterprises, or in making shifts within existing enterprises. A knowledge of factors that affect prices is needed to forecast price changes. Therefore, keeping currently informed on volumes of commodities being produced and marketed, and on general supply-demand conditions could benefit producers. This publication presents recent information about seasonal price variation for major commodities produced and sold by Alabama farmers. Price information on five feeds purchased by farmers is also included. Auburn University Agricultural Experiment Station Bulletins 295 and 850 presented information about seasonal price variation during the periods 1948-54 and 1953-62. Changes in production, seasonal price patterns, and the general price level have rendered

COMPARISON OF SEASONAL PRICE VARIATIONS

5

that information inadequate. Up-to-date information in this publication reflects those changes. METHOD OF STUDY Indexes of seasonal variation of prices for 12 commodities sold and 5 commodities purchased by Alabama farmers were calculated for the 5- and 10-year periods, 1963-67 and 1958-67. Midmonth prices received and paid by Alabama farmers, as reported by the Alabama Cooperative Crop Reporting Service, were used in all calculations. Indexes of seasonal variation were derived for each commodity by dividing averages for each month of the year during the 5- and 10-year periods by the overall average for the entire period. Indexes of seasonal price variation are shown for individual commodities by the upper scale on the charts, with the 5-year period indicated by a broken line and the 10-year period by a solid line. The charts also show actual average monthly prices on the lower scale of the charts. Averages for the 5-year period are represented by the broken line, and those for the 10-year period by a solid line. Tables present data from which charts were drawn, plus indexes of irregularity. Indexes of irregularity were used to measure in percentage the average amount by which individual monthly prices differed from the monthly average price. Application of this information is illustrated by the following example, based on Table 3: The seasonal index of price variation for hogs was 108 in July. If the annual average price of hogs was estimated to be $18 per hundred pounds in a future year, the July price could be estimated as $19.44 per hundred pounds, or 8 per cent above the average annual price. The index of irregularity of 15 for July means that hog prices might vary 15 per cent from the monthly average. Based on historical data presented, two-thirds of the time prices for the month of July are estimated to fall between $16.52 and $22.36 ($19.44 minus 15 per cent and $19.44 plus 15 per cent). By a similar process, expected prices, based on historical variation in prices, can be estimated for any given month through use of the seasonal index of price variation and the index of irregularity.

6

ALABAMA AGRICULTURAL EXPERIMENT STATION

LIVESTOCK AND LIVESTOCK PRODUCTS
Broilers

Broilers are among the farm commodities for which prices were lower in 1967 than in 1958. The average price declined from 17.6 to 11.9 cents per pound between 1958 and 1967. Development and adoption of new production technology, together with increased processing and marketing efficiency, enabled the broiler industry to expand production while experiencing declining prices. Production of broilers in the United States increased at an average rate of 6 per cent per year during the 1958-67 period. Alabama's increase was 15 per cent annually during the same period. Price fluctuations within the year showed a rise through January to a peak in February and March, Table 1 and Figure 1. This rise was followed by a drop in April to a level that was maintained until June. Prices rose through July and then declined sharply through October. Percentage change in price of broilers from the month of highest price to the month of lowest price was 19 per cent for 1963-67 and 18 per cent for 1958-67 - 2.6 cents in both periods.
TABLE 1. BROILERS: AVERAGE SEASONAL VARIATIONS FARM PRICES, 1963-67 AND 1958-67 IN ALABAMA

Months

January
February

March April May June
July

Price per pound 1963-67 1958-67 Cents Cents 13.8 15.2 14.5 15.7 14.4 15.8 13.8 14.8 13.8 14.7 18.9 14.7
14.6 14.9

Index of variation 1963-67 1958-67 101 107 106 102 102 102
107

Index of irregularity 1963-67 1958-67 7 5 9 8 10 9
5

105 109 109 102 102 102
103

12
11

13 12 14 16
12

August September October.... November December_............ AVERAGE __13.6

13.6 13.4 12.6 12.7 11.9

14.1 13.8 13.2 13.3 13.4 14.5

100 99 93 93 88 100

97 96 91 92 92 100

8 6 10 11 14 8

11 10 11 11 15 12

COMPARISON OF SEASONAL PRICE VARIATIONS

7

BROILERS
Index,pct of 1963-67 ond 1958-67 av. I10 5-year overage 100 IO-year average d
90

Cents per pound

16.0

10-year
15.0

overage

3.0

5-year overoge

12.0
0

J

F

M

A

M

J J Months

A

S

O

N

D

FIG. 1. Broilers: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages = index of 100).

8

ALABAMA AGRICULTURAL EXPERIMENT STATION

Eggs

Seasonal price changes have been greater for eggs than for any other farm commodity. During 1963-67, the change in average price from the low in May to the high in January was 5.4 cents per dozen, or 14 per cent. The variation was even greater for the 10-year period; the June low was 6.8 cents per dozen below the January high - a change of 18 per cent. Normally, egg production reached a peak in May and declined throughout the rest of the year. Peak prices were reached in late fall and winter, Table 2 and Figure 2. Egg production in Alabama increased from 1,149 to 2,645 million eggs, or 130 per cent, between 1958 and 1967. This amounted to an average of 13 per cent annually. Egg prices declined 6 out of the 10 years.
TABLE 2. EGGS: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per dozen 1963-67 1958-67
Cents Cents

Index of variation 1963-67 1958-67 105 103 104 96 91 92 96 99 104 102 104 104
100

Index of irregularity 1963-67 1958-67 6 7 5 4 3 3 3 5 7 8 7 8
6

January February March April May June.. July August September_........... October-.............. November December
AVERAGE............

42.8 42.3 42.6 39.4 87.4 37.6 39.2 40.3 42.4 41.6 42.5 42.5
40.9

44.6 43.6 42.5 39.8 37.9 37.8 39.3 40.5 42.7 43.4 44.0 43.9
41.7

107 105 102 95 91 91 94 97 103 104 106 105
100

8 8 7 6 8 8 6 6 7 8 8 8
7

COMPARISON

OF

SEASONAL

PRICE VARIATIONS

EGGS
Index, pct. of 1963-67 and 1958-67 av.
110

5-year oaverage

100
---

90 Cents per dozen 45.0 44.0 43.0

10-year

overage

10-year

overage-

-

39.0-

\

5-year average

428.0 37.0 -

J

F

M

A

M

J J Months

A

S

0

N

D

FIG. 2. bama,

variation averages 1963-67 and 1958-67 (5-and 10-year and average =

Eggs: Indexes of seasonal

monthly prices, Alaindex of 100).

10

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Hogs

Hog prices have been subject to wide price fluctuations in both the 5- and 10-year periods. Widest fluctuation was 126 per cent, with prices per hundredweight ranging from $11.70 in January
1960 to $26.50 in February 1966.

In both periods, average monthly hog prices were lowest in April and highest in August, Table 3 and Figure 3, and followed a distinct pattern. Prices began to rise sharply in May and peaked in August, then declined through November, rose slightly in December, January, and February and then declined. Hog prices were severely depressed during 1959-64 because of heavy marketings. Numbers marketed decreased in late 1964 and prices began to rise by 1965, becoming strong in June. The rise continued to a high of $26.50 in February 1966, which was the peak for the 1958-67 period. Hogs had the highest indexes of irregularity of any commodity studied. Averages of indexes of irregularity were 19 and 17 per cent for 1963-67 and 1958-67 respectively.
TABLE 3.

HOGS:

AVERAGE

SEASONAL

VARIATIONS

IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per hundredweight 1963-67 1958-67 Dollars Dollars
-

Index of variation 1963-67 1958-67 98 99 94 90 99 104 108 108 104 101 97 98
100

Index of irregularity 1963-67 1958-67 25 25 20 19 20 16 15 16 15 16 18 24
19

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

17.68 17.82 16.90 16.30 17.82 18.82 19.44 19.48 18.80 18.28 17.48 17.68
18.04

16.65 16.75 16.55 16.27 17.01 17.69 18.17 18.26 17.79 17.24 16.63 16.55
17.13

97 98 97 95 99 103 106 107 104 100 97 97
100

22 22 16 15 17 16 16 16 15 16 16 21
17

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

11

COMPARISON OF SEASONAL PRICE VARIATIONS1

Index, pct. of 963-67 and 1958-67 av.

I

HOGS HG

100

90 Dollars per hundred pounds 20.00
r -

9.00

5-year overage
I/

18.00
V

1700

16.00
01

J
I I

F

MA

M

J J Months

A

SON

D

FIG. 3. Hogs: Indexes of seasonal variation and overage bama, 1963-67 and 1958-67 (5- and 10-year averages =_idxo

monthly

prices,

Ala-

index

of

100).

0)

12

-

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

Beef Cattle

Beef cattle prices were relatively high in spring and low in the fall, Table 4 and Figure 4. A strong demand for cattle to be put on pastures in the spring and sale of cattle off pastures in the fall are major contributing factors. For both periods, November prices averaged 6 per cent below average annual prices and April prices averaged approximately 5 per cent above the average. There was a variance of $2.03 between the April high and the November low for 1958-67. Beef cattle prices reported were for all grades and classes, excluding calves. Therefore, the averages shown are significantly below the market price for Prime and Choice cattle and considerably above the quoted market price for low grades of cattle, but adequately reflect seasonal price changes.
TABLE

4.

BEEF CATTLE: AVERAGE

SEASONAL

VARIATIONS

IN

ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

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

Price per Index of variation hundredweight 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 17.72 18.07 98 98 17.98 18.34 100 100 18.56 19.01 103 104 105 105 18.84 19.32 19.20 104 105 18.66 18.42 18.74 102 102 102 18.58 18.73 103 18.30 101 100 -18.20 17.96 18.24 100 99 17.14 17.52 95 95 16.92 17.29 94 94 95 96 17.18 17.71
18.01 18.37 100 100

Index of irregularity 1963-67 1958-67 11 10 9 9 10 11 10 12 12 11 10 12
11

10 9 8 8 8 10 9 10 10 10 9 10
9

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

13

COM PARISON

OF SEASONAL PRICE VARIATIONS1

BEEF CATTLE
ndex, pct. of 963-67 and 958-67 av. 11O r

5-year average

00
10-a a verag

90. Dollars per hundred pounds 20.00Or

5-year average

o

f

J

I

I

F

M A

Md JJ Months

I

I

I

I

I

I

I

A

S ON

D

FIG. 4. Beef cattle: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages= index of 100).

14

14 ALABAMA AGRICULTURAL EXPERIMENT

STATION

Calves

The seasonal price pattern for calves corresponded closely to that of beef cattle for both periods. Prices of all calves under 1 year old were relatively high in the spring and low in the fall, Table 5 and Figure 5. There was a seasonal change in price of approximately 11 per cent during both the 5- and 10-year periods, but there was little difference in average price for the two periods.
TABLE 5. CALVES:

FARM

AVERAGE

SEASONAL

VARIATIONS

IN ALABAMA

PRICES, 1963-67 AND 1958-67

Months ~iur riruiu r

Price per hundredweight

Index of variation

Index of irregularity

January

--

__

February__March--___ April---- -M ay------June------July------ August_--_September__

October

---

November-December_.
AVERAGE-

1963-67 1958-67 1963-67 1958-67 Dollars Dollars 21.50 21.90 99 99 22.04 102 22.63 101 22.86 23.26 105 105 105 105 22.80 23.44 22.54 23.10 104 104 22.18 22.40 102 101 21.92 100 22.26 101 21.84 22.02 100 99 21.50 21.91 99 99 20.82 21.37 96 96 20.22 20.89 94 93 20.54 21.27 95 96 21.73 22.20 100 100

1963-67 1958-67
10 10 11 10

12
11 10 12 12 14 13 12 10 13 12

10
10 10 11 11 12 12 11 10 11 11

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

15

COUPARISON

OF SEASONAL PRICE VARIATIONS1

ndexpct. ofCA 1963-67 and 1958 -67 oav.

ES

5-year 110-year averag

averag

100

90 Dollars per hundred pounds 24.00

23.00

21.00

5-year average

J

F

M A

J MUJ Months

A

S

ON

D

FIG. 5. Calves: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages= index of 100).

16

ALABAMA AGRICULTURAL

EXPERIMENT STATION

Milk Average prices of milk were relatively lower in April, May, and June, the flush spring production period, for both the 5- and 10-year periods, Table 6 and Figure 6. Price was highest during the fall and winter months when less fluid milk was diverted to manufacturing purposes. There was an approximate 10 per cent difference (57 cents per hundredweight) in the low price of April and the high price of November for both periods. Seasonal variation in price of milk resulted from fluctuations in 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. Fluid milk producers sold large quantities of surplus milk at manufacturing prices during spring and early summer. Despite lower prices during spring and early summer, income remained fairly constant because of changes in the volume of milk sold. Milk had the most stable price of any farm commodity. The average index of irregularity was 2 per cent. A major reason for the stability of milk prices was the system under which milk was marketed. A State Milk Control Board determined the price that processors paid to producers for each class of milk.
TABLE 6. MILK: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per Index of variation hundredweight 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 5.91 5.89 101 103

Index of irregularity 1963-67 1958-67 1 2

January

February-------------March---------------April -5.66 May June........ July August September-----------October--------------November------------December------------AVERAGE...

5.84
5.76 5.62 5.62 5.72 5.72 5.96 6.06 6.18 6.09
5.84

6.80
5.66 5.44 5.45 5.46 5.55 5.55 5.80 5.90 6.01 5.93
5.70

100
99 97 96 96 98 98 102 103 106 104
100

102
99 95 96 96 97 97 102 104 105 104
100

1
1 5 5 5 6 7 6 6 6 6
5

2
3 6 5 5 6 6 5 5 5 5
5

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

17

COMPARISON

OF SEASONAL PRICE VARIATIONS1

MILK Index, pct. of 1963-67 and 1958-67 av.

110
5-year aeae--

100

90 Dollars per hundredweight 700

10-year average

6.50 5-year average

5.50 10-year overage 5.00 0 J F M A MdJ J Months ASO0N D

FIG. 6. Milk: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages = index of 100).

18

ALABAMA AGRICULTURAL EXPERIMENT STATION

FEEDS PURCHASED Broiler Mash Continuous demand for feed and availability of basic feed ingredients at fairly uniform prices contributes to stability in broiler mash prices. Seasonal variation in prices of broiler feed was only 4 per cent in the 1963-1967 period and even less, 2 per cent, in the 10-year period, Table 7 and Figure 7. The average price of broiler mash in 1967 was $5.04 per hundredweight, only 8 cents above the average for 1958. Formula feeds, including broiler mash, are now almost entirely transported and delivered in bulk, with prices quoted in dollars per ton by feed manufacturers. Since this is a new development, a series of prices per ton was not available for the time period involved. However, the seasonal pattern reflected in prices per hundredweight should closely parallel that from prices quoted on a per ton basis. Major factors that contribute to price variation would have their values reflected in either a per hundredweight or a per ton quotation.
TABLE

7.

BROILER

MASH:

AVERAGE SEASONAL

VARIATIONS

IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Index of Index of Price per variation hundredweight irregularity 1963-67 1958-67 1963-67 1958-67 1963-67 1958-67 Dollars Dollars January .-4.93 4.84 100 100 February 4.99 4.86 101 100 March 4.96 4.87 101 101 April 4.89 4.84 99 100 May -4.88 4.82 99 100 June 4.90 4.83 99 100 4.84 July 4.91 99 100 August 4.95 4.86 100 100 September 5.00 4.88 101 101 October 5.01 4.87 102 101 November------------4.87 4.78 99 98 December 4.91 4.80 100 99 Months
AVERAGE 4.93 4.84

100

100

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

19

BROILER MASH

Index, pct. of 1963-67 and 1958-67 av. I10 5-year averoge
100
-

-

-

IO0-year average 90

Dollars per hundred pounds 5.00
//

"

5- year average'
-

4.90

"

'

4.80 10-year average
4.70 J F M A M J J A SO0 N D

Months
FIG. 7. Broiler mash: Indexes of seasonal variation and average monthly prices,
index of 100). Alabama, 1963-67 and 1958-67 (5- and 10-year averages =

20

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

20

ALABAMA AGRICULTURA

XEIEN

TTO

Laying Mash

Laying mash prices were relatively stable throughout the year for both the 5- and 10-year periods. These prices peaked in September in both periods. The low average price was $4.67 per hundredweight during 1963-67 and was $4.59 during 1958-67. Price quotations for laying mash in bulk quantities were not available. Variation in average price of laying mash amounted to 3 per cent during 1963-67 and 2 per cent in 1958-67, Table 8 and Figure 8. Large scale egg production on a non-seasonal basis and availability of feed ingredients at stable prices have tended to limit wide fluctuations in the price of laying mash.
TABLE 8. LAYING MASH: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per Index of variation hundredweight 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 4.70 4.72 4.67 4.67 4.69 4.67 4.71 4.73 4.77 4.72 4.67 4.72 4.70 4.63 4.65 4.63 4.64 4.65 4.64 4.66 4.67 4.68 4.64 4.59 4.63 4.64 100 100 99 99 100 99 100 102 102 100 99 100 100 100 100 100 100 100 100 100 100 101 100 99 100 100

Index of irregularity 1963-67 1958-67
3 3

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

2 2 3 2 2 3 3 2
3

2 2
2

2 2
3

3 2
3

3 3 3 3 3 3

COMPARISON

OF

SEASONAL

PRICE VARIATIONS

21

LAYING MASH

Index, pct. of
1963-67 and 1958-67 ov. 110

5-year overage
100

I0-year average 90

Dollars per hundred pounds

4.80 -

4.70

"

5-yer ov10-year average
4.60

J

F

M

A

M

J

J

A

S

0

N

D

Months
FIG. 8. Laying mash: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages -= index of 100).

22

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

Mixed Dairy Feed

The price of mixed dairy feed was almost constant throughout the season. Slightly higher prices were noted in the winter months of both periods, but the variation was only a few cents per hundredweight. Dairy feed was cheapest in June, reflecting availability of good pastures during that month. Practically constant numbers of dairy cows on farms plus rather constant concentrate rations have virtually eliminated seasonal variation in the price of dairy feed. There was a variance of only 4 cents per hundredweight in the average price of dairy feed for the 5- and 10-year periods, Table 9 and Figure 9.
TABLE

9.

MIXED

DAIRY FEED:

AVERAGE SEASONAL VARIATIONS

IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per hundredweight 1963-67 1958-67 Dollars Dollars 3.91 3.91
-

Index of variation 1963-67 1958-67 101 101 101 100 99 99 99 99 100 100 100 101 100 101 101 101 100 100 100 100 100 99 99 99 100 100

Index of irregularity 1963-67 1958-67 3 3 3 3 2 3 3 3 3 4 3 3 3 3 3 3 3 3 3 3 3 3 3

JanuaryFebruary March April May June July August September October November December
AVERAGE.
----------

3.89

3.86 3.84 3.83 3.83 83.84 8.85
-

3.86

3.86
-

3.89

38.86

3.85 3.86 3.85 3.83 3.82 3.81 3.81 3.82 8.80 3.80 3.80 3.83 3.82

3
3 3

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

23

COMPARISON OF SEASONAL PRICE VARIATIO

Index, pct. of 1963-67 and 19 58 -67 av.
110

r

10-year

averag

100

90

Dollars per hundred pounds 4.00

3.9

5-year average

3.80

10-year
F M A

average M J J AS8ON D

J

Months
FIG. 9. Mixed dairy feed: Indexes at seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages - index of 100).

24

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Cottonseed Meal Cottonseed meal prices were relatively stable in both the 5- and 10-year periods, Table 10 and Figure 10. During 1963-67 there was a maximum variation of 4 per cent between the September high and the June low. For the 10-year period the high price occurred in August and the low in January. Again there was a 4 per cent variation in price. There was a slight upward trend in the annual average price

of cottonseed meal. Farmers paid an average of $85 per ton in 1963-67 and $79 per ton during 1958-67.
TABLE 10. COTTONSEED

MEAL:

AVERAGE SEASONAL

VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per Index of hundredweight variation 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 4.18 4.19 4.21 4.19 4.17 4.15 4.24 4.32 4.35 4.31 4.31 4.34 4.25 3.89 3.92 3.95 3.94 8.94 3.93 3.97 4.04 4.00 3.91 3.92 3.98 3.95 99 99 99 99 98 98 100 102 102 101 101 102 100 98 99 100 100 100 100 101 102 101 99 99 101 100

Index of irregularity 1963-67 1958-67 9 9 9 9 8 10 10 10 11 10 11 11 10 11 10 10 10 9 9 10 11 12 13 18 13 11

January February March April MayJune July August September October November .......... December
AVERAGE

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

25

COTTONSEED

MEAL

Index, pct. of 1963- 67 nd 1958-67 av. 110

5-year overoge

10-year overage

90

Dollars per hundred pounds

440
5- year average4.20
--

-

- -.

IO-year overage

3.80
J F M A M J J Months A S O N D

FIG. 10. Cottonseed meal: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages = index of 100).

26

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

Soybean Meal

Soybean meal prices reached a peak in September during both periods, Table 11 and Figure 11. Prices tended to be rather stable from January through June, and then rose sharply from July through September. After September prices began a slow decline. The price of soybean meal corresponded to the supply of soybeans available for processing and demand for the meal. The use of soybean meal as a major source of protein in feeds has increased during recent years. The annual average price per hundredweight increased from $3.88 in 1958 to $5.04 in 1967. This increase of approximately 30 per cent was the greatest among feedstuffs during this period.
TABLE

11.

SOYBEAN MEAL:

AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Price per Index of variation hundredweight 1963-67 1958-67 1963-67 1958-67 Dollars Dollars January 4.77 4.29 100 98 February 4.82 4.34 101 99 March 4.77 4.35 100 99 April 4.72 4.33 99 99 May 4.66 4.33 98 99 June 4.64 4.32 97 99 July 4.79 4.42 100 101 August 4.81 4.43 101 102 September-----------4.90 4.52 102 108 October 4.82 4.88 101 100 November 4.84 4.41 101 101 December-------------- 4.80 4.39 100 100 AVERAGE 4.78 4.38 100 100 Months

Index of irregularity 1963-67 1958-67 5 4 4 4 3 5 9 9 9 6 6 6 6 12 12 10 10 8 8 11 11 12 12 12 11 11

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

27

COMPARISON OF SEASONAL PRICE VARIATIONS2

lndex,pct. of 1963-67 and 1958-67 av. 110F

SOYBEAN MEAL

10-year overage
t-..-

-

5-year average
90

Dollars per
hundred pounds 5.00 F

5-year
4.80
t

averager.
/J

"
V '' i

-f

4.60
S -year veroge

4.20

J 0 JIF
_

I ~1~1

M A

M

J

J

A

S ON

D

I

Months

FIG. 11. Soybean meal: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages= index of 100).

28

ALABAMA AGRICULTURAL EXPERIMENT

STATION

CROPS
Corn

Corn prices were highest during June, July, and August-just
before the new crop was harvested and when stores of corn were almost depleted, Table 12 and Figure 12. Likewise, prices were lowest during October, November, and December when the new crop was harvested and stores of corn were greatest. Government price support programs have done much to limit seasonal variations in prices of storable grains. Average indexes of irregularity for corn were 6 and 7 for 1963-67 and 1958-67, down from 16 and 17 for the periods 1953-62 and 1948-54, respectively.

Average price per bushel of corn declined from $1.34 to $1.27 for the periods 1953-62 and 1958-67, respectively-a drop of 5 per cent.
TABLE 12. CORN: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

January -1.31 February ----------March April May June July August September October November December AVERAGE

Price per Index of variation bushel 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 1.24 99 98 1.35 1.28 102 100 1.37 1.32 103 103 1.37 1.32 104 104 1.37 1.32 103 104 1.39 1.34 105 106 1.38 1.34 104 105 1.37 1.33 108 105 1.30 1.25 98 98 1.23 1.17 93 92 1.22 1.16 92 91 1.25 1.19 94 94 1.33 1.27 100 100

Index of irregularity 1963-67 1958-67 8 6 6 5 4 4 4 3 6 10 10 9 6 8 7 7 6 6 6 5 6 6 9 10 9 7

COMPARISON OF SEASONAL PRICE VARIATIONS

29

2

[
Index, pct. of 1963-67 and
1958-67
(av.
-d e.

CORN

110

"'

10-year average
If

100

5-year overage
90
I I I I

Dollars per bushel 1.40,.

1.30

1.20

1.10 0' J
I

I

I

I

i

F

M A

M

J J Months

A

S

ON

D

FIG. 12. Corn: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages - index of 100).

30

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Wheat

Wheat prices were at a peak in February and dropped to a low in July during both periods, Table 13 and Figure 13. Prices for wheat varied by as much as 16 per cent between the high and low month in 1963-67 and by 11 per cent during 1958-66. This amounted to 27 and 17 cents per bushel, respectively. The average indexes of irregularity for wheat were 10 and 9 for 1963-67 and 1958-67, respectively. Comparison figures for 1954-62 and 1948-53 were 5 and 8, respectively. The average price per bushel for wheat was $1.64 in 1963-67 and $1.73 for 1958-67.
TABLE 13. WHEAT: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND

1958-67

Months

Price per Index of variation bushel 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 1.76 1.77 1.75 1.75 1.60 1.56 1.50 1.58 1.59 1.60 1.62 1.63
1.64

Index of irregularity 1963-67 1958-67 10 8 6 7 12 11 11 11 10 12 11 11
10

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

1.79 1.80 1.80 1.79 1.71 1.68 1.63 1.67 1.70 1.70 1.73 1.73
1.73

107 108 107 107 97 95 92 96 97 97 98 99
100

104 105 105 104 99 97 94 96 98 98 100 100
100

7 7 6 6 10 10 11 10 10 10 10 10
9

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

31

COMPARISON OF SEASONAL PRICE VARIATION

index, .pct. of 1963- 67 and 1958- 67 av. 110 r-

100

90

Dollars per bushel 1.80 c.-

1.70

1.60
mo
p

a* GOO

5-year average

J

F

M A

M

J JA Months

SO0N

DI

FIG. 13. Wheat: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages index of 100).

32

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

Oats

The seasonal price pattern for oats was characterized by a price 9 to 10 per cent higher during January, February, and March than in July; this was true for both time periods. Price normally declined from March through July, with the lowest prices occuring in June and July, Table 14 and Figure 14. Oats were grown principally as a feed or seed crop on Alabama farms. Seasonal variation in price normally is not enough to make storing oats profitable. Even in the highest month during 1963-67 the price was only 9 cents per bushel above the lowest price. Oats averaged 86 cents per bushel during 1963-67 and 85 cents per bushel during 1958-67.
TABLE

14.

OATS:

AVERAGE

SEASONAL

VARIATIONS

IN

ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per Index of bushel variation 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 0.89 .89 .90 .89 .86 .81 .81 .83 .85 .86 .87 .87 .86 0.88 .87 .88 .87 .85 .80 .79 .81 .83 .85 .86 .86 .85 103 103 104 103 100 95 94 97 99 100 101 101 100 104 103 104 103 100 95 94 96 98 100 102 101 100

Index of irregularity 1963-67 1958-67 3 3 3 4 3 4 4 5 5 5 5 4 4

JanuaryFebruary March April May June July August September October November___ December
AVERAGE_

COMPARISON OF SEASONAL PRICE VARIATIONS

33

3

OATS Index, pct. of 1963-67 and 1958-67 ov, 110
5-yer averg

100

00 10-year average

Dollars per bushel .90

f

5-year average

.80 10-year average .70
v
.1

J

F

MA

M

J J AS Months

ON

D

FIG. 14. Oats: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages index of 100).

34

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Soybeans

Soybean prices were lowest at time of harvest and highest in spring and summer. April was the month of highest prices in both time periods; the lowest price occurred in September for the 5-year period and November for the 10-year period, Table 15 and Figure 15. The average price for soybeans for each month was higher in the 1963-67 period than the 1958-67 period. Prices averaged 40 cents per bushel higher during the 5-year period than for the 10-year one. Because of growing interest in soybean production recently, new areas have been placed under cultivation and new grain elevators have been built. Soybeans are already an important cash crop in several counties, especially in Baldwin, Jackson, Escambia, Mobile, and Madison. Storing soybeans may be profitable for some individuals, but the additional costs and added returns of storing should be carefully investigated. Costs to be considered should 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.
TABLE 15. SOYBEANS: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per Index of variation bushel 1963-67 1958-67 1963-67 1958-67 Dollars Dollars 2.66 2.72 2.74 2.72 2.68 2.66 2.62 2.63 2.61 2.60 2.36 2.43 2.47 2.51 2.50 2.47 2.41 2.41 2.37 2.34 100 103 103 103 101 100 99 99 98 98 98 101 103 104 104 103 100 100 98 97

Index of irregularity 1963-67 1958-67 6 6 5 6 6 6 5 7 8 5 15 14 13 12 11 10 11 12 13 13

January __ February March April May June July August September_........... October

November
December_............ AVERAGE_

2.58
2.62 2.65

2.30
2.33 2.41

97
99 100

95
97 100

6
6 6

16
16 13

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

COMPARISON

OF SEASONAL PRICE

VARIATIONS

35, 3

Index, pct. of

1963-67 1958-67
110F

SOYBEANS

and av.

10-year average 100
I I I I

Iv

5-year average 90
44

N

2.70

5-year average

2.60

2.50

2.40

2.30
0

J
1

F

M A

M

33J Months

1

A

S ON

D

FIG. 15. Soybeans: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages= index of 100).

36

ALABAMA AGRICULTURAL EXPERIMENT Cotton

STATION

The seasonal price pattern for cotton shifted slightly between 1958-67 and 1963-67. The highest prices occurred in August and September for the 10-year period and in June and July for the 5-year period. December and January were the months of lowest prices, Table 16 and Figure 16. There was only a 9 per cent variation from the month of lowest price to the month of highest price, or 2.6 cents per pound, for 1958-67. The average price of cotton was 31.0 cents for the 1963-67 period and 31.7 cents for the 1958-67 period. Prices of cotton did not vary greatly because price support programs were relatively stable. A change in support level effective in 1966 was reflected by lower prices and more fluctuation in prices in 1966 and 1967.
TABLE 16. COTTON: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67

Months

Price per pound' 1963-67 1958-67 Cents 29.6 30.0 30.3 31.1 31.1 31.6 32.2 31.4 31.7 31.1 31.2 30.6 31.0 Cents 30.3 30.6 30.9 31.4 31.6 32.0 32.6 32.7 32.9 32.3 31.8 31.1
31.7

Index of variation 1963-67 1958-67 95 97 98 100 100 102 104 101 102 101 101 99
100

Index of irregularity 1963-67 1958-67 6 6 6 6 5 6 3 3 4 5 10 12
6

January _.............. February March April May June July_................. August September.... October.... November December_............
AVERAGE

96 97 98 99 100 100 103 103 104 102 100 98
100

6 6 5 5 4 5 4 5 5 5 8 9
6

'Prices

from August 1966 through 1967 include domestic price support payment.

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

37

COMPARISON

OF SEASONALI

PRICEF VRITINS3

COTTON

Index, pct. of 1963-6 7 and 1958- 67 av. 11O 000

r
I I

5-year average
. %Q '0', 0ab

IO-year average 90
I I I I I I I

Cents per pound 34.0 10-year average,
32.0

100%
r\

1I

. N.

28.0 0 J F M A M J J Months A S ON D

L

FIG. 16. Cotton: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages= index of 100).

38

ALABAMA AGRICULTURAL EXPERIMENT

STATION

Hay

Hay prices have a distinct seasonal variation, being highest in winter and early spring and dropping sharply during late spring and summer while grazing is plentiful, Table 17 and Figure 17. A rise in hay prices normally begins in September and continues to a peak in March; then prices decline, reaching the low in August-the main haying season. Hay prices were for all baled hay. Average price of hay was $26.02 per ton for the 1963-67 period and $25.47 per ton during 1958-67. Demand for hay is increasing as the number of cattle and horses in the State increases.
TABLE 17. HAY: AVERAGE SEASONAL VARIATIONS IN ALABAMA

FARM PRICES, 1963-67 AND 1958-67 Months Price per Index of ton variation 1963-67 1958-67 1963-67 1958-67 Dollars Dollars Index of irregularity 1963-67 1958-67 6 8 11 7 8 4 3 3 3 8 4 4 5 7 7 10 7 7 3 4 4 5 5 5 6 6

January February March April .... May June........ July August--------------_September-----------October--------------November------------December------------AVERAGE...

27.46
27.60 28.10 27.00 26.46 24.96 25.10 24.52 24.60 24.78 25.38 26.30 26.02

26.50 26.66 27.03 26.08 25.62 24.66 24.46 24.24 24.36 24.64 25.32 26.03 25.47

105 106 108 104 102 96 96 94 95 95 98 101 100

104 105 106 102 101 97 96 95 96 97 99 102 100

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

39

COMPARISON OF SEASONAL PRICE VARIATIONS3

HAY
Index, pct. of 963-67 and 1958-67 av.

Ito'-

g00

90 Dollars

1r I

'

S5-year

average

//

0-year average

J
1

F

MA

JA MdJ Months

SO0N

D
i

FIG. 17. Kay: Indexes of seasonal variation and average monthly prices, Alabama, 1963-67 and 1958-67 (5- and 10-year averages - index of 100).

40

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

RELIABILITY OF SEASONAL PRICE PATTERNS Seasonal price patterns calculated for the periods 1963-67 and 1958-67 were very similar; also these price patterns were similar to those that prevailed during 1948-54. Many seasonal demand factors, such as eating habits of consumers, change slowly. However, a substantial change in seasonal production of such commodities as broilers and eggs can be made in a relatively short period. During a particular year these changes may result in slightly different seasonal price patterns than those presented. For example, producers who are aware of the number of pigs farrowed, as well as of other key factors that will later affect prices of market hogs, can adjust to take advantage of indicated seasonal production and prices. A degree of error exists in estimating seasonal prices for any farm commodity. However, a measure of this error was calculated based on past monthly price variations. Indexes of irregularity were used to measure in percentage the average amount by which individual monthly prices differed from the monthly average price. During the 5- and 10-year periods, 1963-67 and 1958-67, prices of certain commodities varied more from the monthly averages than others. Data below show that for a majority of commodities sold by farmers, the degree of variation from average monthly prices was less in the 5-year period than during the 10-year period. The lower the index of irregularity the more precise the estimate that can be made from historical data.
Average index of irregularity 1958-67 1963-67 Broilers E gg s- - - - - - - - - - - - - - - - - - - - - - - - - H ogs- - - -- - - - - - - - - - - - - - - - - - - - - Beef cattle_ Calves-- -- - -- - - - - - - - - - - - -- - -- - -8 6 19 11 12 12 7 17 9 11

Milk .. .........................
Broiler mash Laying mash Mixed dairy feed Cottonseed meal

5
2 3 3 10

5
3 3 3 11

Soybean meal
C o rn- - - - - - - - - - - - - - - - - - - - - - - - - -

6
6

11
7

Wh eat-------------- --------- -.. . O a ts .. .. .. ... .. . .. ..- .
- Soybeans C otton --- -- -- - - -- -- - - -- -- -- - - -H a y- - - - - - - - - - - - - - - - - - - - - - - - - - -

10 4
6 5 6

9 4
13 6------------------6 6

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

41

CHANGES IN PRICE LEVELS AND PRICE PATTERNS Changes in Price Levels

Comparison of average annual prices for 12 commodities sold
and 5 feeds purchased revealed that prices for three-fourth of the

commodities sold by farmers declined from the 1948-57 period to the 1958-67 period. Four of the five feeds purchased also showed
price drops from the earlier period. Averages of annual prices for the periods 1948-57 and 1958-67 along with price differences in dollars and percentage are given

in Table 18.
Broilers had declined more percentage-wise in price than any other farm commodity, 44.2 per cent. Calves had increased in

price by 17.1 per cent since the 1948-57 period. This was the
largest increase among the commodities studied. Of the five feeds purchased, only cottonseed meal had increased in price, and this amounted to just 1.8 per cent. Mixed dairy feed had declined in price by 11.8 per cent.
TABLE 18. COMPARISON
SOLD

OF AVERAGES
AND

OF ANNUAL

PRICES FOR TWELVE
BY ALABAMA

COMMODITIES

FIVE

FEEDS PURCHASED

FARMERS, 1948-57 AND 1958-67 Commodity and unit of sales Broilers, lb. Eggs, doz. Hogs, cwt.Beef cattle, cwt....... Calves, cwt.--------Milk, cwt. Broiler mash, cwt..... Laying mash, cwt..... Mixed dairy feed, cwt. Cottonseed meal, cwt.Soybean meal 2, cwt. Corn, bu.-Wheat, bu. O ats, bu.-------- ---Soybeans, bu. Cotton, lb...... ..... Hay, ton Average of annual prices 1948-57 Dollars 0.260 .469 18.46 16.29 18.96 5.46 5.26 5.25 4.33 3.88 4.58 1.56 2.05 1.05 2.60 .344 26.21 1958-67 Dollars 0.145 .417 17.13 18.37 22.20 5.70 4.84 4.64 3.82 3.95 4.38 1.27 1.73 .85 2.41 .317 25.47 Price differences Dollars -0.115 - .052
-1.33

Per cent -44.2 -11.1
7.2

2.08 3.24 .24
.42 -

12.8 17.1 4.4
8.0

-

.61 .51 .07
.20

-11.6 -11.8 1.8
4.4

-. -. -

.29 .32 .20 19 027 .74

-18.6 -15.6 -19.0 - 7.3 - 7.8 - 2.8

Broiler mash prices were not quoted until 1953; therefore, the price given for the 1948-57 average is only a 5-year average. 2 Soybean meal prices were not quoted until 1951; therefore, the price given for the 1948-57 average is only a 7-year average.

'

42

ALABAMA AGRICULTURAL

EXPERIMENT STATION

Changes in Price Patterns

To provide comparisons, the monthly indexes of prices received by Alabama farmers for 11 farm commodities were calculated for the period 1948-54. Methods similar to those used in calculating monthly indexes for 1958-67 were used in arriving at the 1948-54 seasonal pattern of prices. Except for a few commodities, seasonal price patterns for the two periods were quite similar, Figures 18 and 19. There was less seasonal fluctuation in prices of livestock products in the 1958-67 period than during 1948-54, except for poultry. This is partially accounted for by more stable feed prices, improved production methods, better transportation and storage facilities, and improved marketing information. Seasonal price patterns for crops have not changed significantly. For the 1958-67 period, corn prices tended to be more stable throughout the year. During this period there was a 14 per cent difference between the July and November price of corn, as compared with a 20 per cent difference during 1948-54. Wheat prices peaked in February during 1958-67, as contrasted to January in the 1948-54 period. Seasonal variations in prices of oats and hay were almost identical during both periods. The seasonal pattern for soybeans shifted slightly with the low price coming in November in the more recent period as compared with October in 1948-54. The major change, however, was in the magnitude of seasonal price fluctuation. Cotton exhibited more change in seasonal price pattern than any commodity. The highest seasonal price occurred in April and June during 1948-54, but shifted to August and September in the 1958-67 period. January had the low price in the 1958-67 period, as opposed to August in the earlier period.

COMPARISON

OF

SEASONAL

PRICE

VARIATIONS

43

COMPARISON OF SEASONAL PRICE VARIATIONS

43

Ind ex 120 11-

EGGS

/

958-67
in ;
I s

/

r-

1

/

90 120HOGS

/

1948-54

Ind ex 120 I10 F
ivv

Index
901985

MILK

1958-67

/

80

/1,/

90801 1

TT1948-54
I I

J 1110M A M J J A SO0N D F Months BEEF CATTLE Index

JF

MAM

J JASO0N Months

D

32090

1958-67

1948- 54_
F MA M J

- -JA SO0N
D

8-J

M ont hs

FIG. 18. Comparison of seasonal price patterns for selected livestock and livestock products, Alabama (1948-54 and 1958-67 averages - index of 100).

44

ad

44 ALABAMA AGRICULTURAL EXPERIMENT

STATION

Index 120

COTTON

Index 120

HAY

110F
100-

1958- 67
\

1958-67,

1948-54

90
80

90

I948-54
SOYBEANS

Index

OATS

Inde MX
J

20

I1o
'-I -

J1

MAM20J Months

SO-

IOU

J F

110-

90
I 80 JI IF

K1948
A JJ S N
A J J S N
I

1958-67

Months

FIG. 19. Comparison of seasonal price patterns for selected crops, Alabama (1948-54 and 1958-67 averages= index of 100).

COMPARISON OF SEASONAL PRICE VARIATIONS

4

45

SUMMARY AND CONCLUSIONS The degree of seasonal variation in prices for most commodities was less in the 1963-67 period than in the 1958-67 period. The
percentage increase from the month of lowest price to the month

of highest price for 1963-67 and 1958-67 is given below for 12 commodities sold and for 5 feeds purchased. Prices received by farmers changed considerably more within the year than did prices paid by farmers.
Percentageincrease from month Commodity Broilers Eggs- Hogs ---

lowest to month

of highest of average price
1958-67 18 16 12 11 11 10 3 2 4 5 2 15 11 9 9 8 11

-

-

Beef cattle--------C alve s --------- --M ilk -- - - - - - - - - - - - Broiler mash------Laying mash-------Cottonseed meal---Soybean

Mixed dairy feed---C orn ------ -----w heat----------

meal ------

--

-

Oats --------------

Soybeans

----------

C otton ------------H ay -- - - - - - - - - - -- -

1963-67 14 _ 14 18 11 12 8 3 3 4 5 _ 2 13 16 10 _ 6 _7 14

The price of all commodities purchased by farmers increased more percentage-wise in the 1963-67 period than during 1958-67. A larger percentage increase occurred during 1963-67 for hogs, calves, wheat, oats, and hay than in the 1958-67 period. Livestock and livestock products, as well as crops such as soybeans, corn, and small grains, are becoming more important to Alabama farmers as the State's cotton acreage continues to decline. The seasonal price patterns of several of these commodities indicated that considerable farmer effort would be justified to adjust production or marketing, or both, to ensure highest possible seasonal prices. Lowest seasonal crop prices usually occurred during or shortly after the harvest season. For livestock and livestock products, as well as for crops, the 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.

46

ALABAMA

AGRICULTURAL

EXPERIMENT

STATION

46

ALABAMA AGRICULTURA

XEIEN

TTO

Price patterns as presented for various commodities give an indication of the seasonal pattern that may be expected in the future. However, farmers must constantly be alert to the many factors that can change the future seasonal pattern of price for a given commodity. Several things that farmers can do to take advantage of seasonal prices are: 1. Become familiar with the entire marketing system through which 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 livestock produced, but at the same time consider additional costs that might result from a different breeding program. 4. Make adjustments in amount and kind of feed used. 5. Time the purchases of cattle, hogs, and feed to take advantage of low seasonal prices. Likewise, time the sale of livestock 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. Making adjustments in the farming operation 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. Thus, prices do not always run the same path.

AGRICULTURAL EXPERIMENT STATION SYSTEM OF ALABAMA'S LAND-GRANT UNIVERSITY

W\ith an agr icuiltural
resNearchi
hluahu

un it

inl every

-

soil aurea, Aulburn

Vicrsitx

serves the

stock, forestry andl horticitlttira produc!ers ini ieach regioni ini Alatate the~ S since

C

has at stake in

I

1

fromi-

ahix advantage iiexx andh mole

\ ax 1)1 of anid hat (hlitug f at m produtcts directhi
(eco)nomi0cal

prIoducing

22

Research Unit Identification
Agr~c I ", r iici t

Stutio I

,"\~rii

1Tennessee Valley Substation, Belie Mina.
2.

3. 4. 5. 6. 7. 8. 9. 10. 11.

12,

13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

North Alabama Horticulture Substation, Cullman. Upper Coastal Plain Substation, Winfield. Alexandria Experiment Field, Alexandria. Forestry Unit, Fayette County. Thorsby Foundation Seed Stocks Farm, Thorsby. Chilton Area Horticulture Substation, Clanton. Forestry Unit, Coosa County. Piedmont Substation, Camp Hill. Plant Breeding Unit, Tallassee. Forestry Unit, Autauga County. Prattville Experiment Field, Prattville. Black Belt Substation, Marion Junction. Tuskegee Experiment Field, Tuskegee. Lower Coastal Plain Substation, Camden. Forestry Unit, Barbour County. Monroeville Experiment Field, Monroeville. Wiregrass Substation, Headland. Brewton Experiment Field, Brewton. Ornamental Horticulture Field Station, Spring Hill. Gulf Coast Substation, Fairhope.

Sand Mountain Substation, Crossville.