A Forecast Model of Agricultural and Livestock Products Price

Abstract

The frequent and excessive fluctuation of agricultural and livestock products price is not only harmful to residents’ living, but also affects CPI (Consumer Price Index) values, and even leads to social crisis, which influences social stability. Therefore it is important to forecast the price of agriculture and livestock products. As a result, we made a research on the factors affecting agricultural and livestock products price, established a forecasted model of agricultural and livestock products price, and developed its early-warning system which is suitable to China. Considering the direct relationship between the price and the output, multiple linear regression method was adopted to study this problem. The model is composed of three sub-models. This paper puts forward the concept of price equilibrium coefficient C0, which describes the degree to which people accepting the forecasted price. With the establishment of the standard for the influence of price fluctuation, the influence of price fluctuation is measured. Each range of the C0 value corresponds with a specific result, which may informs the government with the danger of price fluctuation. As a result, the model can early-warn the price rising caused by crop reduction due to sudden natural disaster, which may induce social turmoil and crisis. If the forecasted price rises heavily, the government should take measures to avoid crisis. This paper offers the method to control future price. Finally, a forecasted model of pork price is calculated with simulated data. The forecasted result is in good agreement with actual situation.