Forecasting monthly catfish (Ictalurus punctatus.) pond bank and feed prices

Abstract

Volatility in catfish pond bank and feed prices lead to profit uncertainty in the catfish industry. Analysis of the factors that affect those prices and development of a forecasting model would provide guidance to catfish farm managers. Error-correction models (ECM) based on cointegrating relationships among variables were specified following development of a single-equation ARIMAX model. Factors identified as those that influence catfish price were: lagged value of catfish, feed and substitute product prices, while those that influenced feed price were: lagged value of feed, corn and soybean prices. ECM estimates implied that fish price adjusts approximately 6% and feed price 22% to the long-run equilibrium in 1 month. The analysis showed that it takes less than 17 months and 5 months to correct for long-run disequilibrium for catfish and feed prices, respectively. The ARIMAX model demonstrated a better fit for both in-sample and out-of-sample forecasting for catfish price and had better out-of-sample predictive ability for feed prices.