Demand Analysis of the Markets for Soybean Oil and Soybean Meal

Roger J. Vandenborre

American Journal of Agricultural Economics, 1966, vol. 48, issue 4_Part_I, 920-934

Abstract: A 10-equation simultaneous model of the soybean economy was constructed. This involved relationships representing quantities demanded domestically as well as exported, for both soybean oil and soybean meal. Estimates of the structural parameters of the model were obtained by the two-stage least-squares procedure, using first differences of the data. The estimates indicate an annual necessary increase of more than 30 million bushels of beans to cover the needs of the United States, Western Europe, Japan, and Canada, if prices are to remain relatively constant. This amount is based on the assumption that human and animal populations increase and that shifts in tastes and preferences and in feeding technology in these regions are of the same magnitude as they were during the period 1949–1964. Also it was assumed that the production of competing oils and oilseeds at the same prices as in the last decade would not drastically change. The domestic demand for oil and meal is price-inelastic (—.45, —.28); this statement holds for exports also (—.90, —.58). However, the price elasticities of demand for meal are less reliable than those of demand for oil.

Date: 1966
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