Soybeans: Acreage Response to Price and Farm Program Changes

W. Herbert Brown

No 323997, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: Linear programming and regression analyses are used to estimate U.S. planted acreage of soybeans with expected prices of $2.50, $2.20, $2, and $1.80 per bushel. The linear programming analysis assumes programs of the Agricultural Act of 1965 are in effect. Changes in soybean acreage induced by reductions in the loan rate for feed grain and changes in the domestic allotment for cotton are also estimated. An expected price of $2.50 for soybeans induced an estimated 1.2-million-acre increase over the prior year with 1969 specifications of the Agricultural Act of 1965 in effect. The estimated change in planted acres successively declined about 1 million acres as the price expectations were successively dropped from $2.50 to $2.20, then to $2 and to $1.80. The regression analysis is based on the period 1946-69. Independent variables include acreage in previous year, restrictions in effect for feed grains, and returns above fertilizer costs for soybeans and major competing crops. When the absolute acreage of soybeans was used as the independent variable, estimates from regression analysis were similar to those from linear programming. When the first difference in soybean acreage is used as the dependent variable, the estimates differ only in that the increase in acreage over the previous year is higher than the other estimates for each price level.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Demand and Price Analysis; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 27
Date: 1971-07
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:323997

DOI: 10.22004/ag.econ.323997

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