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Soybeans: Acreage Response to Price and Farm Program Changes

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  • Brown, W. Herbert

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.

Suggested Citation

  • Brown, W. Herbert, 1971. "Soybeans: Acreage Response to Price and Farm Program Changes," Miscellaneous Publications 323997, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersmp:323997
    DOI: 10.22004/ag.econ.323997
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    File URL: https://ageconsearch.umn.edu/record/323997/files/ERS-473.pdf
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    Cited by:

    1. Lanier, Eleanor B., 1974. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1971-June 1972," Miscellaneous Publications 321804, United States Department of Agriculture, Economic Research Service.
    2. Ash, Mark S., 1984. "A supply response model for Iowa soybeans and net farm income implications," ISU General Staff Papers 1984010108000017528, Iowa State University, Department of Economics.
    3. Chavas, Jean-Paul & Pope, Rulon D. & Kao, Robert S., 1983. "An Analysis Of The Role Of Futures Prices, Cash Prices And Government Programs In Acreage Response," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 8(1), pages 1-7, July.
    4. Lanier, Eleanor B., 1972. "Economics of Agriculture: Reports and Publications Issued or Sponsored by USDA's Economic Research Service, July 1970-June 1971," Miscellaneous Publications 321803, United States Department of Agriculture, Economic Research Service.

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