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Article
Searching for Profitable Margins
Agricultural Policy Review
  • Chad E. Hart, Iowa State University
  • Lee L. Schulz, Iowa State University
Publication Date
1-1-2015
Abstract
Agriculture is like any other business in that producers are searching for ways to achieve profitability. Their margins, the difference between revenues and costs, depend on many factors: weather, crop yields, livestock birthing rates, production costs, demand, etc. Within agriculture, crop and livestock margins tend to be countercyclical. When crop margins are high, livestock margins are usually low and vice versa. This relationship makes sense as high crop prices create strong revenues for crop producers, but high production costs for livestock producers; and the current pricing situation shows the opposite holds as well. Low crop prices create weak revenues for crop producers and lower production costs for livestock producers.
Citation Information
Chad E. Hart and Lee L. Schulz. "Searching for Profitable Margins" (2015)
Available at: http://works.bepress.com/chad-hart/79/