Laserfiche WebLink
<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />fl '"~, C' ~'!: <br />V::;~VO.] <br /> <br />C. GENERAL APPROACH TO METHODOLOGY <br /> <br />To predict U. S. agricultural conmodity prices, not only must domestic <br />supply (production and imports) and demand (consumption and exports), be <br />considered, but also that of the entire world. The various components of <br />supply and demand in the world agricultural economy are obviously complex <br />with strong interdependencies among world regions and between different <br />agricul tural commodities. For exampl e, the reduction in the Peruvian <br />anchovy catch caused the U.S. soybean price to soar. The occasional weak- <br />ening in the past of the U. S. doll ar rel ative to other currencies made U. S. <br />commodities more attractive than before and increased export demands caus- <br />ing sl ightly higher prices in the U.S. Set-aside programs in the United <br />States have caused the price of commodities to increase in foreign markets <br />merely because it portends less of that conmodity. <br /> <br />Because of the complexity of the agricul tural economy and the number <br />of factors to be con~idered, the task is sufficiently difficult to render <br />impossible any attempt by an individual to mentally analyze all the infor- <br />mation. A simple trend line would be possible but would be wholly inade- <br />quate and unnecessary considering the complexity of the situation and the <br />availabil ity of another approach. Therefore, a task of this nature <br />requires the use of a mathematical model if it is to be at all meaningful. <br /> <br />A model is simply a representation of a system in the real world. It <br />is constructed to show how a system can be expected to reac t under differ- <br />ent conditions during a given time period. However. models are only par- <br /> <br />1-3 <br />