We shouldn't write off all derivatives and futures, because, of course, if you're a farmer you might want to sell your next crop now at a future price, or you might want to protect yourself – hedging effectively – against wild fluctuations in the wheat price, the grain price, the sheep price.
The determinants of sheep price other than traits of sheep were market locationand seasonal factors.
The average sheep price during this study was morethan Ethiopian Birr 238.00.
Age square, however, influenced sheep price negatively implying sheepcommand a higher price up to a very old age and then the price will fall down asage goes up.
The results of the three estimations (OLS, HC2 and HC3)show that sheep price is determined by sheep traits (such as age, color, bodysize, and tail condition), season, market places, and buyer type.
Williams et al. (2006), similarly used a hedonic model using weekly salestransactions to analyze cattle prices in West Africa and reported that location,season, and cattle attributes influence sheep price.
Although the focus of most of thestudies is market oriented production systems, the importance of the attributes oflivestock in determining prices observed in the market is a key lesson to learn.Interestingly though, there are hardly any publications done on sheep price modelingin subsistence and/or semi-subsistence crop livestock mixed farming systems.
Low sheep wool prices also contributed to rancher's interest in exploring economic alternatives ([Von Thüngen et al. 2010]).
By 2010, most of the projects had stopped operating due to difficulty in marketing guanaco, the decrease in market price to USD $40-60 per kilo and the relative increase in sheeperool price.
