AN ANALYSIS OF THE ROLE OF FUTURES PRICES, CASH PRICES AND GOVERNMENT PROGRAMS IN ACREAGE RESPONSE

Jean-Paul Chavas (), Rulon D. Pope and Robert S. Kao

Western Journal of Agricultural Economics, 1983, vol. 08, issue 01, 7

Abstract: An integrated investigation of futures price, cash price, and government programs is presented in the context of an econometric model of acreage supply response for U.S. corn and soybeans. The analysis refines the role of different sources of price information in the farmers' acreage decision. It is found that the government corn support price program plays a major role in corn and soybean production decisions. Also, the results indicate that futures prices are not good proxies for expected future cash prices in the presence of government programs. This raises questions about the information efficiency of futures prices when government intervenes in the market place.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 1983
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Citations: View citations in EconPapers (43)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:wjagec:32481

DOI: 10.22004/ag.econ.32481

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