Quantitative Forecast of the Milk Price of a Dairy Farm

The milk price forecast for the dairy farm is a prerequisite for its smooth business management. In addition, the estimation of the future price of milk is a prerequisite for planning the volumes of milk production and the corresponding costs of raising the animals. Accordingly, milk production volumes are an important parameter to maintain a stable and continuous supply of milk for potential customers and milk producers. The purpose of this research is to derive quantitative solutions for price behavior applied to a dairy cow farm. A model based on statistical historical data on the purchase price of milk is applied. The timeline of the historical purchase process is used to forecast prices. A moving time horizon is applied to make the closest solution to the forecast start time. The historical time horizon is varied to assess the accuracy of the forecasts given by two forecasting models. Empirical results with real data from a cow farm favor the more complex predictive model.