Hostname: page-component-cd9895bd7-dk4vv Total loading time: 0 Render date: 2024-12-18T20:15:44.476Z Has data issue: false hasContentIssue false
  • English
  • Français

The Responsiveness of U.S. Corn and Soybean Acreages to Conditional Price Expectations: An Application to the 1985 Farm Bill

Published online by Cambridge University Press:  05 September 2016

Kamil H. Shideed ,
Fred C. White  and
Stephen J. Brannen
Kamil H. Shideed
Affiliation:
Division of Agricultural Economics, University of Georgia, Athens, Georgia
Fred C. White
Affiliation:
Division of Agricultural Economics, University of Georgia, Athens, Georgia
Stephen J. Brannen
Affiliation:
Division of Agricultural Economics, University of Georgia, Athens, Georgia
Get access Rights & Permissions [Opens in a new window]

Abstract

Naive and adaptive schemes have been used as proxies for price expectations in previous studies of supply response. Those studies contain mixed formulas of futures, support, and lagged prices as alternative formulations for price expectations. This study uses a conditional expected price which combines both market and support prices into one price expectations measure. It defines the total effect of available information on supply response. The results indicate the potential usefulness of formulating expected prices as conditional price expectations in supply response analysis, with support prices being the conditional set. Under the provisions of the 1985 Farm Bill, significant reductions in corn and soybean acreages are in prospect for 1987-90.

Keywords

cornsoybeansacreageprice expectationsforecasts
Type
Submitted Articles
Information
Journal of Agricultural and Applied Economics , Volume 19 , Issue 2 , December 1987 , pp. 153 - 161
Copyright
Copyright © Southern Agricultural Economics Association 1987

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Anderson, J. R., Dillon, J. L., and Hardaker, J. B.. Agricultural Decision Analysis. Ames, Iowa: The Iowa State University Press, 1977.Google Scholar
Bailey, K. W., and Womack, A. W.. “Wheat Acreage Response: A Regional Econometric Investigation.” So. J. Agr. Econ., 17(1985):171–180.Google Scholar
Chavas, J. P., Pope, R. D., and Kao, R. S.. “An Analysis of the Role of Futures Prices, Cash Prices and Government Programs in Acreage Response.” West. J. Agr. Econ., 8(1983):27–33.Google Scholar
Cumby, R. E., Huizinga, J., and Obstfed, M.. “Two-Step Two-Stage Least Squares Estimation in Models with Rational Expectations.” J. Econometrics, 21(1983):333–355.Google Scholar
Fisher, B. S. “Rational Expectations in Agricultural Economics Research and Policy Analysis.” Amer. J. Agr. Econ., 64(1982):260–265.Google Scholar
Gallagher, P. “The Effectiveness of Price Support Policy—Some Evidence for U.S. Corn Acreage Response.” Agr. Econ. Res., 30(1978):8–14.Google Scholar
Gardner, B. L. “Futures Prices in Supply Analysis.” Amer. J. Agr. Econ., 58(1976):81–84.Google Scholar
Garst, G. D., and Miller, T. A.. “Impact of the Set-Aside Program on the U.S. Wheat Acreages.” Agr. Econ. Res., 27(1975):30–37.Google Scholar
Glaser, L. K. Provisions of the Food Security Act of 1985. USDA, ERS, Agriculture Information Bulletin No. 498, April 1986.Google Scholar
Griliches, Z. “Distributed Lags: A Survey.” Econometrica, 35(1967):16–49.Google Scholar
Hargrove, S. H. The Agriculture and Food Act of 1981-Description of the Major Commodity Programs. Peat, Marwick, Mitchell & Co., 1982.Google Scholar
Houck, J. P., and Gallagher, P. W.. “The Price Responsiveness of U.S. Corn Yields.” Amer. J. Ag. Econ., 58(1976):731–734.Google Scholar
Houck, J. P., and Ryan, M. E.. “Supply Analysis for Corn in the United States: The Impact of Changing Government Programs.” Amer. J. Agr. Econ., 54(1972):184–191.Google Scholar
Houck, J. P., Abel, M. E., Ryan, M. E., Gallagher, P. W., Hoffman, R. G., and Penn, J. B.. Analyzing the Impact of Government Programs on Crop Acreage. USDA, ERS, Technical Bulletin No. 1548, August 1976.Google Scholar
Johnston, J. Econometric Methods. 3rd ed. New York: McGraw-Hill Book Company, 1984.Google Scholar
Lee, D. R., and Helmberger, P. G.. “Estimating Supply Response in the Presence of Farm Programs.” Amer. J. Agr. Econ., 67(1985):193–203.Google Scholar
Lidman, R., and Bawden, D. L.. “The Impact of Government Programs on Wheat Acreage.” Land Economics, 50(1974):327–335.Google Scholar
Morzuch, B. J., Weaver, R. D., and Helmberger, P. G.. “Wheat Acreage Supply Response Under Changing Farm Programs.” Amer. J. Agr. Econ., 62(1980):29–37.Google Scholar
Muth, J. F. “Rational Expectations and the Theory of Price Movement.” Econometrica, 29(1961):315–335.Google Scholar
Muth, J. F.“Estimation of Economic Relationships Containing Latent Expectations Variables.” Rational Expectations and Econometric Practice.Ed. Lucas, R. E. Jr, and Sargent, T. J.. Minneapolis: The University of Minnesota Press, 1981.Google Scholar
Nerlove, M. The Dynamics of Supply: Estimation of Farmers' Response to Price. Baltimore: The Johns Hopkins Press, 1958.Google Scholar
Nerlove, M.“The Dynamics of Supply: Retrospect and Prospect.” Amer. J. Agr. Econ., 61(1979):874–888.Google Scholar
Pope, R. D. “Supply Response and the Dispersion of Price Expectations.” Amer. J. Agr. Econ., 63(1981):161–163.Google Scholar
Ryan, M. E., and Abel, M. E.. “Corn Acreage Response and the Set-Aside Program.” Agr. Econ. Res., 24(1972):102–112.Google Scholar
Shonkwiler, J. S., and Maddala, G. S.. “Modeling Expectations of Bounded Prices: An Application to the Market for Corn.” Rev. Econ. Statistics, 67(1985):697–702.Google Scholar
Shumway, C. R. “Supply Relationships in the South—What Have We Learned?” So. J. Agr. Econ., 18(1986):11–19.Google Scholar
Shumway, C. R., and Chang, A. A.. “Supply Response of Texas Field Crops: An Evaluation of the CET Linear Supply Model.” West. J. Agr. Econ., 5(1980):149–164.Google Scholar
U.S. Department of Agriculture, CRB, SRS. Agricultural Prices. U.S. Government Printing Office, Washington, D.C. various issues.Google Scholar
U.S. Department of Agriculture, CRB, SRS. Agricultural Statistics. U.S. Government Printing Office, Washington, D.C., various issues.Google Scholar
U.S. Department of Agriculture, CRB, SRS. ASCS Commodity Fact Sheet: Feed Grains—Summary of 1985 Support Prpgram and Related Information. U.S. Government Printing Office, Washington, D.C., May 1985.Google Scholar
U.S. Department of Agriculture, CRB, SRS. ASCS Commodity Fact Sheet: Soybeans—Summary of 1985 Support Program and Related Information. U.S. Government Printing Office, Washington, D.C., September 1985.Google Scholar
U.S. Department of Agriculture, CRB, SRS. ASB. NASS. Crop Production— 1985 Summary U.S. Government Printing Office, Washington, D.C., February 1986.Google Scholar
U.S. Department of Agriculture, CRB, SRS. ERS. Feed—Outlook and Situation Report. U.S. Goverment Printing Office, Washington, D.C., various issues.Google Scholar
U.S. Department of Agriculture, CRB, SRS. Oil Crops—Outlook and Situation Report. U.S. Government Printing Office, Washington, D.C., various issues.Google Scholar
Wallace T., D. “Pretest Estimation in Regression: A Survey.” Amer. J. Agr. Econ., 59(1977): 431–443.Google Scholar
Wallis, K. F. “Econometric Implications of the Rational Expectations Hypothesis.” Econometrica, 48(1980):49–73.CrossRefGoogle Scholar