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Price Forecasting of Feed Raw Materials Used in Dairy Farming: A Methodological Comparison

Author

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  • Merve Kılınç Yılmaz
  • Yusuf Şahin
  • Kenan Oğuzhan Oruç

Abstract

Milk is a product of strategic importance for countries due to its nutritional value and its status as a priority foodstuff. Feed raw materials represent a critical input item within the dairy cattle sector. It is of great importance for producers to maintain their activities and profitability so that they ensure the balance of milk/feed parity. In countries such as Turkey, where inflationary effects are observed, the prices of feed raw materials are not stable. In an environment characterized by high price volatility, the ability to forecast feed raw material prices is of paramount importance for producers engaged in future planning. In this study, the price forecasting of 43 feed raw materials, which are extensively utilized in the ration preparation process within the dairy cattle sector, was conducted. The efficacy of 11 methods based on time series, statistics and grey system theory was evaluated. Following the assessment of model success criteria, it was determined that the DGM (1,1) method exhibited superior forecasting capabilities compared to exponential smoothing and regression models, as well as other grey forecasting models. Based on MAD, MSE and MAPE values, it can be posited that grey forecasting methods may serve as a viable alternative for price forecasting of feed ingredients.

Suggested Citation

  • Merve Kılınç Yılmaz & Yusuf Şahin & Kenan Oğuzhan Oruç, 2024. "Price Forecasting of Feed Raw Materials Used in Dairy Farming: A Methodological Comparison," Alphanumeric Journal, Bahadir Fatih Yildirim, vol. 12(3), pages 249-280, December.
    • Handle: RePEc:anm:alpnmr:v:12:y:2024:i:3:p:249-280
    DOI: https://doi.org/10.17093/alphanumeric.1504096
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    References listed on IDEAS

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    1. Zishan Xu & Chuanggeng Lin & Zhe Zhuang & Lidong Wang & Polinpapilinho Katina, 2023. "Research on Multistage Dynamic Trading Model Based on Gray Model and Auto-Regressive Integrated Moving Average Model," Discrete Dynamics in Nature and Society, Hindawi, vol. 2023, pages 1-15, February.
    2. Eren Bas & Erol Egrioglu & Ufuk Yolcu, 2021. "Bootstrapped Holt Method with Autoregressive Coefficients Based on Harmony Search Algorithm," Forecasting, MDPI, vol. 3(4), pages 1-11, November.
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    More about this item

    Keywords

    Exponential Smoothing; Grey Forecasting; Price Forecasting; Regression Analysis;
    All these keywords.

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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