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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
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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

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