Price expectation plays an indispensable role in production, marketing and the agricultural
technology adoption decisions of farmers. Using household survey data, this paper analyses the
price expectations of farmers growing cereals and horse beans in Ethiopia. Our findings show that
current and past output prices in local markets, central wholesale prices and seasonal rainfall are
strongly correlated with smallholders’ price expectations. Reliable information on these variables
assists farmers to form better price expectations, thereby improving their production decisions. This
supports the recent developments in using information and communication technologies (ICTs) and
market information systems (MIS) to convey market and weather information to farmers.