Title: Factors affecting market price of potatoes in Hastings, Florida
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 Material Information
Title: Factors affecting market price of potatoes in Hastings, Florida
Physical Description: Book
Creator: Hensel, D. R.
Publisher: Agricultural Research Center,
Copyright Date: 1976
 Record Information
Bibliographic ID: UF00076365
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: 145188217 - OCLC

Full Text



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Hastings Research Report PR-1976-3


I K(f jn-
November 1ii6t! if


FACTORS AFFECTING MARKET PRICE OF POTATOES IN HASTINGS, FLORIDA.
D. R. Hensel, Center Director

Ability to predict the average market price of potatoes for the Hastings,
Florida area would be beneficial to the potato industry. Growers must make
decisions early in the fall concerning acreage to plant, seed purchases, and
whether or not to contract. If the average Hastings price of potatoes could
be estimated early in the fall, Hastings growers could make more intelligent
decisions concerning their crop.

A study of various factors was begun in 1976 to determine if there was a
method of estimating the price of Hastings potatoes. At the same time, the
factors controlling the Hastings price could be identified. During the first
part of the study, several factors which affected the Hastings price became
evident. Price was related to:

a. Price of U.S. potatoes the previous year.
b. Change in price from the year before.
c. Change in fall production.

A Hastings price index was developed accordingly:

Index = (Absolute change in US Price) (% Change in Price % Change
in March 1 stocks per capital)

Table 1 shows the comparison of price index to average Hastings price and the
contract price. During the nineteen year period, 1958 1976, the difference
between contract and market price was greater than 25 cents 11 times. The
index predicted correctly that contracts would be less than open market 4
times (1960, 1965, 1973 and 1974). The difference in price averaged $1.25 per
cwt during those years. The index did not indicate correctly in 1964 and 1971
when the open market price was more than 25 cents above contract price. A
summary of potato marketing options for the 19 year period is as follows:


Options
Maximum price
Index method
Open market
50% contract
100% contract
Minimum price


19 year ave. $/cwt
$ 3.73
3.66
3.53
3.46
3.39
3.19


AGRICULTURAL RESEARCH CENTER
Hastings, Florida








Table 1. Comparison of Average Hastings Potato
Price Index 1954 1977.


Price, Contract Price, and


Average Profit/Losses
Hastings Contract Price No Contracts greater
Year Price Price Index Recommended than $0.25

$/cwt $/cwt $/cwt
1954 2.60 -200
1955 3.85 +55 X
1956 3.49 -10 -
1957 1.85 -5
1958 1.96 2.85 0 0.89
1959 3.08 2.85 -25
1960 3.80 3.00 +78 X 0.80
1961 2.09 3.00 -2 0.91
1962 3.19 3.00 -22
1963 2.38 3.00 +18 0.62
1964 3.48 3.00 +3 -0.48
1965 4.30 3.00 +200 X 1.30
1966 3.24 3.25 -65
1967 3.15 3.25 -12
1968 3.16 3.25 -3
1969 2.80 3.25 +7 0.45
1970 3.40 3.25 0
1971 3.70 3.25 0 -0.45
1972 3.25 3.50 -5
1973 5.05 3.50 +80 X 1.55
1974 6.10 4.75 +124 X 1.35
1975 4.32 4.50 -30
1976 4.60* 5.00 +7 0.40
1977 4.50 -6*
* Values are estimates actual data not available.

For the second part, a computer study was initiated to determine whether
various factors could closely predict the Hastings potato price. A total
of 37 variables were selected. By stepwise regression analysis, 18 factors
were found to be significantly related to the Hastings price. Through
multiple correlation, the best combination of factors which predict the
Hastings price is being determined.

An example of a prediction equation is:


Estimated
Hastings
Price
$/cwt


R2 = 0.873

PR-1976-3


-2.300 + 0.0352
+ 4.715
+ 0.0733


(% Change in U.S. Price from previous year)
(Fall Production per Capita previous year)
(% Change in Fall production per capital from
previous year)


C.V. = 11.0


Page 2




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