Arbitrage involves entering into financial transactions to obtain risk-free profits by leveraging differences in interest rates, exchange rates, or commodity prices between different markets.
A buffer stock is used in agriculture to stabilize the price of commodities. The government purchases excess production for storage and sells that storage stock in years of low production. In general, the use of buffer stocks stabilizes commodity market price swings.
Pegging is a method used to stabilize the price of a security, commodity, or currency by intervening in the market. This term is commonly associated with maintaining exchange rate stability and supporting commodity prices, like agricultural goods, through governmental action.
Seasonality refers to the predictable changes or patterns in an economic or financial factor that occur at specific times of the year, which can impact business operations, financial markets, and economic planning.
The Soil Bank program involves land held out of agricultural production to stabilize commodity prices and promote soil conservation. Subsidies to participating farmers are provided by the U.S. Department of Agriculture.
