Performance of the Daily Spot Cotton Quotations for Producer Price Discovery in the Southwest Region

Darren Hudson, Don Ethridge, Jeff Brown, and Carl Anderson


 
ABSTRACT

Three years of price information from the Daily Spot Cotton Quotations (DSCQ) and the econometric Daily Price Estimation System were used to compare the DSCQ estimated prices with the actual producer market. The findings indicated that for grade alone, the DSCQ estimated price was higher than what the producer market revealed. When all qualities are allowed to vary, the average price reported by the DSCQ was higher than what the market reveled. However, the consistency of this relationship is not reliable. From a premium/discount perspective, the DSCQ was found to underestimate premiums and overestimate discounts for all qualities considered.



Reprinted from Proceedings of the 1994 Beltwide Cotton Conferences pp. 467 - 470
©National Cotton Council, Memphis TN

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Document last modified Sunday, Dec 6 1998