Time series forecasting of price of the agricultural products using data science

Abstract

Purpose. The purpose of our article is to research and forecast prices for agricultural products using the example of potato prices based on the most effective models using data science techniques. Methodology / approach. Various forecasting models are explored, starting from baseline models like decomposition and exponential smoothing models to more advanced techniques such as ARIMA, SARIMA, as well as deep learning models including neural network. The data is split into training and testing sets, and models are validated using cross-validation techniques and optimised through hyperparameter tuning. Model performance is evaluated using metrics such as MAE, MSE, RMSE, and MAPE. The selected model is then used to generate future price forecasts, with uncertainty quantified through confidence intervals. Results. The study successfully applied advanced data science techniques to forecast potato prices, leveraging a range of effective models. By analysing historical price data and using various forecasting methods, the research identified the most accurate models for predicting future price trends. The results demonstrate that the selected models can provide reliable forecasts. In particular, the results showed that the model could achieve good forecast results when applied to real problems and, thus, can be effectively used for forecasting tasks especially considering seasonality. In addition, it should be noted that the model has a higher prediction accuracy at the time intervals closest to the original data. The obtained results support using both models simultaneously for forecasting, which can compensate for the shortcomings of each of them. The models can be used separately, to more accurately predict the values for the required period, or a combination of them is also possible. Originality / scientific novelty. The study’s originality lies in development of methods for effectively accounting for seasonality in agricultural price data, such as using seasonal decomposition techniques or more advanced techniques that combine statistical and data science approaches. The novelty implies the implementation of real-time data processing and forecasting system allows for the timely prediction of price changes, enabling stakeholders to make more informed decisions. Practical value / implications. Forecasting potato prices holds significant practical value for various stakeholders. For farmers, accurate forecasts enable informed decisions on the optimal times to plant, harvest, and sell their crops, thereby optimising their profits. In the supply chain, distributors and retailers can use these forecasts to manage inventory more effectively and plan contracts, reducing waste and avoiding shortages. Policymakers benefit from forecasts by anticipating market fluctuations and stabilising prices, which supports both consumers and producers. For consumers, stable pricing ensures better budgeting and helps avoid sudden price spikes, making essential foods more affordable. Overall, accurate price forecasting enhances market efficiency by reducing uncertainty and aiding investors in managing risk.

Keywords

• agriculture
• price
• seasonality
• time series model
• forecasting
• neural network.