Price and profit: Investigating a conundrum

Carl R. Zulauf, Gary Schnitkey, Carl T. Norden, Erick Davidson

Research output: Contribution to journalArticlepeer-review


Corn and soybean prices do not differ significantly among farms participating in the Illinois farm business farm management (FBFM) program from 1996 through 2005. While consistent with the literature, the finding is inconsistent with farmers' opinion of the importance of price. A conundrum exists. However, the study also finds that price and profit per acre are positively related when a given farm is examined over time. Thus, the conundrum can be explained as a difference in perspective: researchers examine variation between price and profit across farms at a point in time while farmers examine this variation within his/her farm over time. Nevertheless, the relationship a farmer observes is likely due to market supply and demand factors, not the farmer's managerial control over the price received.

Original languageEnglish (US)
Pages (from-to)352-359
Number of pages8
JournalReview of Agricultural Economics
Issue number2
StatePublished - Jun 2008

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Economics and Econometrics


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