USING THE CRUDE OIL AND HEATING OIL MARKETS FOR DIESEL FUEL PURCHASING DECISIONS

Kevin Dhuyvetter (), Erik Dean and Joe Parcell ()

Journal of Agribusiness, 2003, vol. 21, issue 2, 17

Abstract: Agricultural producers and input suppliers must regularly make decisions based on forecasts; however, most publicly available forecasts are for outputs. Research has shown the importance of being a low-cost operator. Thus, focusing on inputs may be beneficial. The objective of this research was to estimate models based on futures markets to forecast diesel fuel prices. Results suggest diesel fuel prices forecasted using the crude oil or heating oil futures market are reasonably accurate, and that this approach is superior to using a historical average. Based on out-of-sample price predictions, producers could profitably use crude oil futures-based models to make diesel fuel purchasing decisions. While the gains from following a model-based decision rule were small, they were positive, suggesting producers would not be worse off following this strategy.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Date: 2003
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/14664/files/21020213.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:jloagb:14664

DOI: 10.22004/ag.econ.14664

Access Statistics for this article

More articles in Journal of Agribusiness from Agricultural Economics Association of Georgia Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().