found forecasts from a reduced form to be slightly, though not consistently, more accurate than single equation forecasts. A common alternative is to estimate a single reduced form equation for price, based on a simultaneous system. This wills typically contain contemporaneous variables for income and other commodity prices. Since explanation or policy analysis was the usual purpose of any study, econometricians ignored the need to first forecast contemporaneous variables before the price equation could be used in prediction.
Livestock production has been modeled by the same partial adjustment as described for crops. Naive price expectations were used initially to explain the existence of hog and beef cycles. Since livestock production is year round, in contrast to crop production, studies soon came to use quarterly or monthly data series and different methods of describing seasonal and cyclical patterns were employed. Livestock production and more especially prices have been popular subjects for single equation econometric studies.