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Producer Expectations and the Extensive Margin in Grain Supply Response

Published online by Cambridge University Press:  15 September 2016

David Boussios  and
Andrew Barkley
David Boussios*
Affiliation:
Department of Agricultural Economics at Purdue University
Andrew Barkley
Affiliation:
Department of Agricultural Economics at Kansas State University
*
Correspondence: David Boussios ▪ Department of Agricultural Economics ▪ Purdue University ▪ 403 West State Street ▪ Lafayette, IN 47907 ▪ Phone +1.765.494.4191 ▪ Emaildboussio@purdue.edu.
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Abstract

Grain supply is the joint effect of both area and yield; however, research often targets either one or the other. The research presented here estimates the complete supply elasticity of grains using novel approaches to approximate producers’ price and weather expectations on both yield and acres planted. The results from this approach combining acreage and yield show the negative impact of expanded production on average yields and the supply response. Additionally, the research extends previous methods of approximating producers’ price expectations through the use of historical basis prices.

Keywords

cornextensive marginproducer expectationssorghumsoybeanssupply elasticitysupply responsewheat
Type
Research Article
Information
Agricultural and Resource Economics Review , Volume 43 , Issue 3 , December 2014 , pp. 335 - 356
Copyright
Copyright © 2014 Northeastern Agricultural and Resource Economics Association 

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