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Modeling Agricultural Supply Response Using Mathematical Programming and Crop Mixes

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  • Xiaoguang Chen
  • Hayri Önal

Abstract

Mathematical programming models are widely used in agricultural sector analysis. However, the lack of micro-level data, as well as computational requirements, necessitate the aggregation of individual producers into representative units when working at the sectoral level. This usually leads to unrealistic extreme specialization in supply responses. In 1982, McCarl introduced the "historical crop mixes" approach to avoid extreme specialization. We extend this approach by generating additional synthetic crop mixes using supply response elasticities and systematically varied commodity prices. In addition to avoiding extreme specialization, this approach provides flexibility when future supply responses can be vastly different from past responses. An application to U.S. biofuel policy analysis is presented. Copyright 2012, Oxford University Press.

Suggested Citation

  • Xiaoguang Chen & Hayri Önal, 2012. "Modeling Agricultural Supply Response Using Mathematical Programming and Crop Mixes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 674-686.
  • Handle: RePEc:oup:ajagec:v:94:y:2012:i:3:p:674-686
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    File URL: http://hdl.handle.net/10.1093/ajae/aar143
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    Citations

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    Cited by:

    1. Chen, Xiaoguang & Khanna, Madhu, 2014. "Indirect Land Use Effects of Corn Ethanol in the U.S: Implications for the Conservation Reserve Program," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170284, Agricultural and Applied Economics Association.
    2. repec:eee:ecoser:v:21:y:2016:i:pa:p:109-119 is not listed on IDEAS
    3. Catherine L. Kling & Raymond W. Arritt & Gray Calhoun & David A. Keiser & et al., 2016. "Research Needs and Challenges in the FEW System: Coupling Economic Models with Agronomic, Hydrologic, and Bioenergy Models for Sustainable Food, Energy, and Water Systems," Center for Agricultural and Rural Development (CARD) Publications 16-wp563, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. Choi, Hyung Sik & Schneider, Uwe A. & Rasche, Livia & Cui, Junbo & Schmid, Erwin & Held, Hermann, 2015. "Potential effects of perfect seasonal climate forecasting on agricultural markets, welfare and land use: A case study of Spain," Agricultural Systems, Elsevier, vol. 133(C), pages 177-189.
    5. Kahil, Mohamed Taher & Albiac, José, 2013. "Greenhouse gases mitigation policies in the agriculture of Aragon, Spain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 1, April.
    6. Chen, Xiaoguang, 2016. "Economic potential of biomass supply from crop residues in China," Applied Energy, Elsevier, vol. 166(C), pages 141-149.
    7. Moon, Jin-Young & Apland, Jeffrey & Folle, Solomon & Mulla, David J., 2012. "Environmental Impacts of Cellulosic Feedstock Production: A Case Study of a Cornbelt Aquifer," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 125016, Agricultural and Applied Economics Association.
    8. G. Cornelis van Kooten, 2013. "Modeling Forest Trade in Logs and Lumber: Qualitative and Quantitative Analysis," Working Papers 2013-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    9. Chen, Xiaoguang & Önal, Hayri, 2016. "Renewable energy policies and competition for biomass: Implications for land use, food prices, and processing industry," Energy Policy, Elsevier, vol. 92(C), pages 270-278.
    10. repec:gam:jagris:v:8:y:2018:i:4:p:53-:d:139411 is not listed on IDEAS
    11. Nuñez, Hector M., 2016. "Biofuel Potential in Mexico: Land Use, Economic and Environmental Effects," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236067, Agricultural and Applied Economics Association.
    12. Woodard, Joshua D. & Chiu Verteramo, Leslie & Miller, Alyssa P., 2015. "Adaptation of U.S. Agricultural Production to Drought and Climate Change," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205903, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    13. Roy, René & Baker, Laurie & Thomassin, Paul J., 2013. "Estimating the Cost of Agricultural Pollution Abatement: Establishing Beneficial Management Practices in the Bras d’Henri Watershed," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150956, Agricultural and Applied Economics Association.
    14. van Kooten, G. Cornelis & Johnston, Craig, 2014. "Global impacts of Russian log export restrictions and the Canada–U.S. lumber dispute: Modeling trade in logs and lumber," Forest Policy and Economics, Elsevier, vol. 39(C), pages 54-66.
    15. Wang, Weiwei & Khanna, Madhu & Dwivedi, Puneet, 2013. "Optimal Mix of Feedstock for Biofuels: Implications for Land Use and GHG Emissions," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150736, Agricultural and Applied Economics Association.
    16. Craig Johnston & G. Cornelis van Kooten, 2014. "Modelling Bi-lateral Forest Product Trade Flows: Experiencing Vertical and Horizontal Chain Optimization," Working Papers 2014-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.

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