Using USDA Forecasts to Estimate the Price Flexibility of Demand for Agricultural Commodities
AbstractWe estimate the general equilibrium price flexibility of demand for corn and soybeans using monthly changes in expected supply published by the USDA. Our estimates reflect the demand response to a one-year supply shock and thus correspond to the inverse demand elasticity. We derive the conditions under which our estimates are consistent, and we show how demand flexibility varies by season, inventory, time horizon, and demand composition. At average inventory and without accounting for corn-ethanol use, we obtain price flexibility estimates of - 1.35 and - 1.03 for corn and soybeans, respectively. Current corn-ethanol production levels are associated with much larger absolute flexibilities for both commodities. Copyright 2012, Oxford University Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 94 (2012)
Issue (Month): 4 ()
Contact details of provider:
Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org/
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Aaron Smith, 2012. "Comment on "Bubbles, Food Prices, and Speculation: Evidence from the CFTC’s Daily Large Trader Data Files"," NBER Chapters, in: The Economics of Food Price Volatility National Bureau of Economic Research, Inc.
- CÃ¡ceres-HernÃ¡ndez, JosÃ© Juan & MartÃn RodrÃguez, Gloria & GonzÃ¡lez GÃ³mez, JosÃ© Ignacio & Nuez YÃ¡nez, Juan Sebastian, 2013. "ana exports. Are product withdrawal decisions rational?," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 13(2).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.