IDEAS home Printed from https://ideas.repec.org/a/bla/canjag/v58y2010i1p57-72.html
   My bibliography  Save this article

Acreage Response to Weather, Yield, and Price

Author

Listed:
  • Alfons Weersink
  • Juan H. Cabas
  • Edward Olale

Abstract

This paper examines the effect of weather on the distribution of yield and its subsequent impact on the acreage allocation decisions of crop farmers in Ontario. The mean and variance of yield are estimated for corn, soybeans, and winter wheat for eight counties in Ontario over a 26‐year period. The predicted parameters of the yield distribution are then used along with expectations on the distribution of crop price to estimate area response functions. A principal contribution of the paper is the decomposition of the revenue impact on crop area allocation into separate average and variance contributions for both price and yield. This decomposition illustrates the importance of expected yield in the area allocation decisions. Crop yield is especially influenced by the length of the growing season and this has a significant impact on acreage allocations. This implies that crop area will be altered in response to expected changes in climate, even without shifts in crop prices. Le présent article examine l'incidence des facteurs météorologiques sur la distribution des rendements et leurs conséquences sur les décisions des producteurs agricoles de l'Ontario concernant l'allocation des superficies cultivées. Nous avons estimé la moyenne et la variance des rendements pour le maïs, le soja et le blé d'automne cultivés dans huit comtés ontariens au cours d'une période de 26 ans. Les paramètres prédits de la distribution des rendements et l'espérance de la distribution du prix des cultures ont été utilisés pour estimer les fonctions de réponse par région. La décomposition de l'impact du revenu sur l'allocation des superficies cultivées en terme d'effets sur les moyennes et les variances des prix et des rendements constitue une importante contribution de l'article. Cette décomposition montre l'importance des rendements prévus dans les décisions d'allocation des superficies. Le rendement de culture est particulièrement influencé par la longueur de la saison de croissance qui a une incidence considérable sur l'allocation des superficies cultivées. Par conséquent, les superficies cultivées seront influencées par les changements climatiques prévus, et ce, même en l'absence de fluctuation du prix des cultures.

Suggested Citation

  • Alfons Weersink & Juan H. Cabas & Edward Olale, 2010. "Acreage Response to Weather, Yield, and Price," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 57-72, March.
    • Handle: RePEc:bla:canjag:v:58:y:2010:i:1:p:57-72
    DOI: 10.1111/j.1744-7976.2009.01173.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1744-7976.2009.01173.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1744-7976.2009.01173.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Krause, Mark A. & Lee, Jung-Hee & Koo, Won W., 1995. "Program And Nonprogram Wheat Acreage Responses To Prices And Risk," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(1), pages 1-12, July.
    2. K. K. Meilke & Alfons Weersink, 1990. "The Impact of Support Programs on Crop Area Response," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 38(4), pages 871-885, December.
    3. Jean-Paul Chavas & Matthew T. Holt, 1990. "Acreage Decisions Under Risk: The Case of Corn and Soybeans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(3), pages 529-538.
    4. William Lin & Robert Dismukes, 2007. "Supply Response under Risk: Implications for Counter-Cyclical Payments' Production Impact," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 64-86.
    5. Mike Massow & Alfons Weersink, 1993. "Acreage Response to Government Stabilization Programs in Ontario," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 41(1), pages 13-26, March.
    6. Richard E. Just & Rulon D. Pope, 1979. "Production Function Estimation and Related Risk Considerations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 276-284.
    7. Christopher Bryant & Barry Smit & Michael Brklacich & Thomas Johnston & John Smithers & Quentin Chjotti & Bhawan Singh, 2000. "Adaptation in Canadian Agriculture to Climatic Variability and Change," Climatic Change, Springer, vol. 45(1), pages 181-201, April.
    8. Chavas, Jean-Paul & Holt, Matthew T, 1996. "Economic Behavior under Uncertainty: A Joint Analysis of Risk Preferences and Technology," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 329-335, May.
    9. Coyle, Barry T., 1993. "On Modeling Systems Of Crop Acreage Demands," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(1), pages 1-13, July.
    10. Barten, Anton P. & Vanloot, Chris, 1996. "Price dynamics in agriculture: An exercise in historical econometrics," Economic Modelling, Elsevier, vol. 13(3), pages 315-331, July.
    11. Sarno, Lucio & Taylor, Mark P., 1998. "Real exchange rates under the recent float: unequivocal evidence of mean reversion," Economics Letters, Elsevier, vol. 60(2), pages 131-137, August.
    12. Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
    13. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "How does food supply respond to high and volatile international food prices? An empirical evaluation of inter- and intra- seasonal global crop acreage response," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161472, African Association of Agricultural Economists (AAAE).
    2. Yan Yu & J. Stephen Clark & Qingsong Tian & Fengxian Yan, 2022. "Rice yield response to climate and price policy in high-latitude regions of China," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(5), pages 1143-1157, October.
    3. Magrini, Emiliano & Balié, Jean & Morales Opazo, Cristian, 2016. "Price signals and supply responses for staple food crops in SSA countries," DARE Discussion Papers 1601, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    4. Mohammad Torshizi & Richard Gray, 2022. "Adaptability and variety adoption: Implications for plant breeding policy in a changing climate," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(4), pages 842-859, October.
    5. Wu, Feng & Guan, Zhengfei, 2015. "Modeling the Interactions of Strawberry Commodity and Labor Markets in the US and Mexico," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205887, Agricultural and Applied Economics Association.
    6. Haile, Mekbib G. & Kalkuhl, Matthias & von Braun, Joachim, 2013. "Short-term global crop acreage response to international food prices and implications of volatility," Discussion Papers 145308, University of Bonn, Center for Development Research (ZEF).
    7. Chen, Chi-Chung & Hsu, Sheng-Ming & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2012. "Estimating the Economic Impacts of Climate Change on Global Food Market," Conference papers 332262, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Ahmad, Munir & Nawaz, Muhammad & Iqbal, Muhammad & Javed, Sajid, 2014. "Analysing the Impact of Climate Change on Rice Productivity in Pakistan," MPRA Paper 72861, University Library of Munich, Germany.
    9. Haneishi, Yusuke & Maruyama, Atsushi & Takagaki, Michiko & Kikuchi, Masao, 2014. "Farmers’ risk attitudes to influence the productivity and planting decision: A case of rice and maize cultivation in rural Uganda," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(4), pages 1-14, December.
    10. Shahbaz Bhatti & Sarfraz Hassan & Khalid Mushtaq & Kamran Javed, 2020. "Investigation The Impact Of Climate Change On Productivity Of Cotton: Empirical Evidence From Cotton Zone," Big Data In Agriculture (BDA), Zibeline International Publishing, vol. 2(1), pages 1-4, February.
    11. Mekbib G. Haile & Tesfamicheal Wossen & Kindie Tesfaye & Joachim von Braun, 2017. "Impact of Climate Change, Weather Extremes, and Price Risk on Global Food Supply," Economics of Disasters and Climate Change, Springer, vol. 1(1), pages 55-75, June.
    12. Mekbib G. Haile & Matthias Kalkuhl & Joachim Braun, 2014. "Inter- and intra-seasonal crop acreage response to international food prices and implications of volatility," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 693-710, November.
    13. Rezwanul Parvez & David C Roberts & David Ripplinger, 2017. "Factors Impacting Crop Acreage Decision: A Case Study of North Dakota Agriculture," Agricultural Development, Sophia, vol. 1(1), pages 16-36.
    14. Hodjo, Manzamasso & Dalton, Timothy & Nakelse, Tebila, 2021. "Cereal Land Allocation Under Weather and Price Uncertainties in West Africa," 2021 Conference, August 17-31, 2021, Virtual 315177, International Association of Agricultural Economists.
    15. Saddiq, Muhammad & Fayaz, Muhammad & Hussain, Zahid & Shahab, Muhammad & Ullah, Irfan, 2013. "Acreage Response Of Sugarcane To Price And Non Price Factors In Khyber Pakhtunkhwa," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(3), pages 1-8, July.
    16. Magrini, Emiliano & Morales-Opazo, Cristian & Balie, Jean, 2014. "Supply response along the value chain in selected SSA countries: the case of grains," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197193, International Agricultural Trade Research Consortium.
    17. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "Inter-and intra-annual global crop acreage response to prices and price risk," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149695, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "Inter-and intra-annual global crop acreage response to prices and price risk," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149695, Agricultural and Applied Economics Association.
    2. Agabriel, Jacques & Lherm, Michel & Mosnier, Claire & Reynaud, Arnaud & Thomas, Alban, 2009. "Estimating a Production Function under Production and Output Price Risks: An Application to Beef Cattle in France," TSE Working Papers 09-046, Toulouse School of Economics (TSE).
    3. Mekbib G. Haile & Matthias Kalkuhl & Joachim Braun, 2014. "Inter- and intra-seasonal crop acreage response to international food prices and implications of volatility," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 693-710, November.
    4. Haile, Mekbib G. & Kalkuhl, Matthias & von Braun, Joachim, 2013. "Short-term global crop acreage response to international food prices and implications of volatility," Discussion Papers 145308, University of Bonn, Center for Development Research (ZEF).
    5. Holt, Matthew T., 1999. "A Linear Approximate Acreage Allocation Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-15, December.
    6. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "How does food supply respond to high and volatile international food prices? An empirical evaluation of inter- and intra- seasonal global crop acreage response," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161472, African Association of Agricultural Economists (AAAE).
    7. Reynaud, Arnaud, 2009. "Adaptation à court et à long terme de l'agriculture au risque de sécheresse : une approche par couplage de modèles biophysiques et économiques," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 90(2).
    8. Ward, Patrick S. & Singh, Vartika, 2013. "Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies: Evidence from Field Experiments in Rural India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150794, Agricultural and Applied Economics Association.
    9. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    10. Pope, Rulon D. & LaFrance, Jeffrey T. & Just, Richard E., 2011. "Agricultural arbitrage and risk preferences," Journal of Econometrics, Elsevier, vol. 162(1), pages 35-43, May.
    11. Mitchell, Paul David, 1999. "The theory and practice of green insurance: insurance to encourage the adoption of corn rootworm IPM," ISU General Staff Papers 1999010108000013154, Iowa State University, Department of Economics.
    12. Robert G. Chambers & Margarita Genius & Vangelis Tzouvelekas, 2021. "Invariant Risk Preferences and Supply Response under Price Risk," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1802-1819, October.
    13. Ragnar Tveteras & Ola Flaten & Gudbrand Lien, 2011. "Production risk in multi-output industries: estimates from Norwegian dairy farms," Applied Economics, Taylor & Francis Journals, vol. 43(28), pages 4403-4414.
    14. Jutta Roosen & David A. Hennessy, 2003. "Tests for the Role of Risk Aversion on Input Use," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 30-43.
    15. Sanglestsawai, Santi & Rodriguez, Divina Gracia P. & Rejesus, Roderick M. & Yorobe, Jose M., 2017. "Production Risk, Farmer Welfare, and Bt Corn in the Philippines," Agricultural and Resource Economics Review, Cambridge University Press, vol. 46(3), pages 507-528, December.
    16. De Nova, Carolina Carbajal, 2021. "Synthetic data. A novel proposed method for applied risk management," 95th Annual Conference, March 29-30, 2021, Warwick, UK (Hybrid) 311085, Agricultural Economics Society - AES.
    17. Lee, Young-Jae & Kennedy, P. Lynn, 2013. "The Role Of Uncertainty In The Agricultural Output Market In Acreage Allocation Decisions," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142130, Southern Agricultural Economics Association.
    18. Bakhshi, Samira & Kerr, William A., 2009. "Is There Supply Distortion In The Green Box? An Acreage Response Approach," Working Papers 51093, Canadian Agricultural Trade Policy Research Network.
    19. Boussemart, Jean-Philippe & Crainich, David & Leleu, Hervé, 2015. "A decomposition of profit loss under output price uncertainty," European Journal of Operational Research, Elsevier, vol. 243(3), pages 1016-1027.
    20. Moser, Stefan & Mußhoff, Oliver, 2017. "Comparing the Use of Risk influencing Production Inputs and Experimentally Measured Risk Attitude: Do the Decisions of Indonesian Small scale Rubber Farmers Match?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 66(2), June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:canjag:v:58:y:2010:i:1:p:57-72. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/caefmea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.