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Exchange Rates Impacts on Agricultural Inputs Prices using VAR

Published online by Cambridge University Press:  26 January 2015

Osei Yeboah ,
Saleem Shaik  and
Albert Allen
Osei Yeboah
Affiliation:
North Carolina A&T State University, Greensboro, NC
Saleem Shaik
Affiliation:
North Dakota State University, Fargo, ND
Albert Allen
Affiliation:
Mississippi State University, Starkville, MS
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Abstract

The effects of the U.S. dollar exchange rate versus the Mexican peso are evaluated for four traded nonfarm-produced inputs (fertilizer, chemicals, farm machinery, and feed) in the U.S. Unit root tests suggest that the exchange rate and the four input price ratios support the presence of unit roots with a trend model but the presence unit roots can be rejected in the first difference model. This result is consistent with a fixed price/flex price conceptual framework, with industrial prices more likely to be unresponsive to the exchange rate than farm commodity prices.

Keywords

exchange ratepass-throughlaw of one priceSURVARF14F31F36F42C23
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 41 , Issue 2 , August 2009 , pp. 511 - 520
Copyright
Copyright © Southern Agricultural Economics Association 2009

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