Optimal forecast evaluation: fertilizer prices

ABSTRACT

High fertilizer price volatility makes production planning and inventory management difficult, so accurate fertilizer price forecasts would be beneficial. This article evaluates commercial forecasts for urea and diammonium phosphate (DAP) prices based on forecast accuracy and optimal forecast properties. Most forecasts pass the tests, but forecasts for the US New Orleans urea and the US Gulf DAP markets, in particular, do not and thus show potential to be improved.

KEYWORDS:

• Diammonium phosphate
• fertilizer
• forecasting
• prices
• urea

JEL CLASSIFICATION:

• C53
• Q02

Acknowledgements

The research was partially supported by the A.J. and Susan Jacques Chair as well as the Oklahoma Agricultural Experiment Station and USDA National Institute of Food and Agriculture [Hatch Project number OKL02939].

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Normality of the error term is rejected, so a t-test is not appropriate.

Additional information

Funding

The research was partially supported by the A.J. and Susan Jacques Chair as well as the Oklahoma Agricultural Experiment Station and USDA National Institute of Food and Agriculture [Hatch Project number OKL02939].