Differences Among Commodities in Real Price Variability and Drift

Many farm products exhibit price variabilities over over long time intervals that range between 10 and 20 percent when measured as standard deviations of annual rates of change. Price variability is notably higher for onions, rice, wool, oats, potatoes, grapefruit, and oranges, and lower for snap beans, tobacco, green peas, milk, broccoli, processing tomatoes, and strawberries. Price variability was higher during 1977-93 than during 1949-72 for grains, soybeans, and peanuts, lower for grapes, potatoes, processing tomatoes, and hogs, and about the same for other crops and livestock. Real prices fell between 1948 and 1993 for 29 of 30 commodities studied, with poultry, eggs, wool, snap beans, grains, and cotton exhibiting the largest rates of decline.