Forecasting Quality Grade and Certified Angus Beef Premiums
2019
Franken, Jason | Parcell, Joe
We evaluate the mean squared error and mean absolute percentage error of alternative forecasts of quality grade and Certified Angus Beef (CAB) premiums, which may be of interest to cow-calf producers, feeders, and packers. A supply and demand model and a vector autoregressive model outperform a naïve model accounting for only seasonal effects for all premiums except the strongly seasonal Choice-Select spread. While there is no significant difference between the supply and demand model and the vector autoregressive model in terms of mean squared error, the supply and demand model outperforms the vector autoregressive model in terms of mean absolute percentage error in predicting the CAB-Choice premium.
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