IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/1985010108000013104.html
   My bibliography  Save this paper

Economic impacts of the Farmer-Owned Reserve program on the U.S. corn-livestock sector

Author

Listed:
  • Smyth, Donald Craig

Abstract

An integrated econometric model of the U.S. corn-livestock sector was developed to investigate the impacts of the Farmer-Owned Reserve (FOR) program on the market behavior of the sector. The model was formulated and estimated on a quarterly basis, in order to increase the number of observations on FOR-influenced markets, and permit a seasonal, as well as interyear evaluation of the program;Econometric simulation was used to contrast the performance of the program with an alternative policy design reflecting continuation of the storage policies in existence prior to the reserve program. Over the period 1977-1982, the analysis indicated that the FOR exerted appreciable effects on both the mean price of corn, and the year-to-year variation in corn prices. Relative to the alternative storage policy, the reserve program enhanced prices in surplus years, while moderating the upward pressure on prices in tight years. The program also made a substantial contribution towards the objective of expansion of carryover stock levels;The Farmer-Owned Reserve exerted noticeable, although no large, effects on the U.S. livestock sector over the period. Reserve-induced higher corn prices resulted in small reductions in livestock herds, and hence, production relative to continuation of the pre-1977 policies. Livestock prices were increased moderately by the operations of the program.

Suggested Citation

  • Smyth, Donald Craig, 1985. "Economic impacts of the Farmer-Owned Reserve program on the U.S. corn-livestock sector," ISU General Staff Papers 1985010108000013104, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:1985010108000013104
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/15467c63-ac8b-4a14-a0ac-faa408338378/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. D. Gale Johnson, 1973. "Farm Commodity Programs: An Opportunity for Change," Books, American Enterprise Institute, number 936216, September.
    2. Bruce L. Gardner, 1975. "The Farm-Retail Price Spread in a Competitive Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 399-409.
    3. William H. Meyers & Mary E. Ryan, 1981. "The Farmer-Owned Reserve: How Is the Experiment Working?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(2), pages 316-323.
    4. Peter Helmberger & Rob Weaver, 1977. "Welfare Implications of Commodity Storage under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(4), pages 639-651.
    5. Robert G. Chambers & William E. Foster, 1983. "Participation in the Farmer-Owned Reserve Program: A Discrete Choice Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 120-124.
    6. Meyers, William H. & Ryan, Mary E., 1981. "The Farmer-Owned Reserve: How is the Experiment Working?," Staff General Research Papers Archive 10860, Iowa State University, Department of Economics.
    7. Salathe, Larry E. & Price, J. Michael & Gadson, Kenneth E., 1982. "The Food and Agricultural Policy Simulator," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 34(2), pages 1-15, April.
    8. Frederick V. Waugh, 1944. "Does the Consumer Benefit from Price Instability?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 58(4), pages 602-614.
    9. Houck, James P., 1976. "Analyzing the Impact of Government Programs on Crop Acreage," Technical Bulletins 158119, United States Department of Agriculture, Economic Research Service.
    10. Jerry A. Sharples & Forrest D. Holland, 1981. "Impact of the Farmer-Owned Reserve on Privately Owned Wheat Stocks," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 63(3), pages 538-543.
    11. Miller, Steve, 1979. "Univariate Residual Cross Correlation Analysis: An Application To Beef Prices," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 278301, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Ryan, Timothy J., 1980. "A Note On Bias In The Estimated Effects Of Beef Imports On U.S. Meat Prices," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-5, April.
    13. Shlomo Reutlinger, 1966. "Short-Run Beef Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 48(4_Part_I), pages 909-919.
    14. Breimyer, Harold F. & Rhodesm V. James, 1975. "Livestock Aspects of Feed Gran Policy," 1975 Annual Meeting, August 10-13, Columbus, Ohio 284116, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Peck, Anne E. & Gray, Roger W., 1980. "Grain reserves -- unresolved issues," Food Policy, Elsevier, vol. 5(1), pages 26-37, February.
    16. Durbin, J, 1970. "Testing for Serial Correlation in Least-Squares Regression When Some of the Regressors are Lagged Dependent Variables," Econometrica, Econometric Society, vol. 38(3), pages 410-421, May.
    17. Gordon C. Rausser & Thomas F. Cargill, 1970. "The Existence of Broiler Cycles: An Application of Spectral Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(1), pages 109-121.
    18. Parham, Karen D. & Agnew, Donald B., 1982. "Improvements in Grades of Hogs Marketed," Miscellaneous Publications 330276, United States Department of Agriculture, Economic Research Service.
    19. Panos A. Konandreas & Andrew Schmitz, 1978. "Welfare Implications of Grain Price Stabilization: Some Empirical Evidence for the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(1), pages 74-84.
    20. Paul A. Samuelson, 1972. "The Consumer Does Benefit from Feasible Price Stability," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 86(3), pages 476-493.
    21. Baumes, Harry S. & Meyers, William H., 1980. "The Crops Model: Structural Equations, Definitions and Selected Impact Multipliers," Staff General Research Papers Archive 10933, Iowa State University, Department of Economics.
    22. Johnson, Stanley R. & Rausser, Gordon C., 1977. "Systems Analysis and Simulation: A Survey of Applications in Agricultural and Resource Economics," A Survey of Agricultural Economics Literature, Volume 2: Quantitative Methods in Agricultural Economics, 1940s to 1970s,, Agricultural and Applied Economics Association.
    23. Harold F. Breimyer & V. James Rhodes, 1975. "Livestock Aspects of Feed Grain Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(5), pages 945-948.
    24. Meyers, William H. & Womack, Abner W. & Bredahl, Maury E., 1981. "The Impact of the Farmer-Owned Reserve on Market Structure: The Case of Wheat," 1981 Annual Meeting, July 26-29, Clemson, South Carolina 279411, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    25. J. W. Freebairn & Gordon C. Rausser, 1975. "Effects of Changes in the Level of U.S. Beef Imports," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(4), pages 676-688.
    26. Benton F. Massell, 1969. "Price Stabilization and Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(2), pages 284-298.
    27. Shlomo Reutlinger, 1976. "A Simulation Model for Evaluating Worldwide Buffer Stocks of Wheat," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 58(1), pages 1-12.
    28. Meyers, William H. & Jolly, Robert W., 1980. "Price Implications of Farmer's Response to the Farmer-Owned Reserve," Staff General Research Papers Archive 11467, Iowa State University, Department of Economics.
    29. Enrique R. Arzac & Maurice Wilkinson, 1979. "A Quarterly Econometric Model of United States Livestock and Feed Grain Markets and Some of Its Policy Implications," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 297-308.
    30. Van Arsdall, Roy N. & Nelson, Kenneth E., 1983. "Characteristics of Farmer Cattle Feeding," Agricultural Economic Reports 307950, United States Department of Agriculture, Economic Research Service.
    31. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    32. Marvin L. Hayenga & Duane Hacklander, 1970. "Monthly Supply-Demand Relationships for Fed Cattle and Hogs," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(4), pages 535-544.
    33. Meyers, William H. & Jolly, Robert W., 1980. "Price Implications of Farmers' Response to the Farmer-Owned Reserve Program," 1980 Annual Meeting, July 27-30, Urbana-Champaign, Illinois 278855, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    34. Timothy J. Ryan, 1980. "A Note On Bias In The Estimated Effects Of Beef Imports On U.S. Meat Prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 60-64, April.
    35. Womack, Abner W., 1976. "The U.S. Demand for Corn, Sorghum, Oats and Barley: An Econometric Analysis," Economic Reports 8464, University of Minnesota, Department of Applied Economics.
    36. Heien, Dale & Mathews, Jim & Womack, Abner W., 1973. "A Methods Note on the Gauss-Seidel Algorithm for Solving Econometric Models," Journal of Agricultural Economics Research, United States Department of Agriculture, Economic Research Service, vol. 25(3), pages 1-11, July.
    37. Maury E. Bredahl & William H. Meyers & Keith J. Collins, 1979. "The Elasticity of Foreign Demand for U.S. Agricultural Products: The Importance of the Price Transmission Elasticity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 58-63.
    38. Meyers, William H., 1981. "Domestic Grain Reserves: Research Needs and the Policy Process," Staff General Research Papers Archive 10919, Iowa State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    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. Jeon, Jong-Pyeong, 1989. "The impacts of policy alternatives and foreign demand fluctuations on the US rice market," ISU General Staff Papers 1989010108000010204, Iowa State University, Department of Economics.
    2. Mahama, Ramatu, 1985. "A stochastic simulation of the impact of price insulation policies on world wheat market stability," ISU General Staff Papers 198501010800008868, Iowa State University, Department of Economics.
    3. Liu, Hsiang-Hsi, 1983. "An annual simultaneous equation econometric model of U.S. corn and soybean cash and futures markets," ISU General Staff Papers 198301010800009935, Iowa State University, Department of Economics.
    4. Skold, Karl Durwood, 1989. "The integration of alternative information systems: an application to the Hogs and Pigs report," ISU General Staff Papers 1989010108000010239, Iowa State University, Department of Economics.
    5. Denbaly, Massoud Said Mark, 1984. "U. S. monetary policy and the exchange rate: effects on the world coarse grain market," ISU General Staff Papers 198401010800008753, Iowa State University, Department of Economics.
    6. Probst, Joel Keith, 1982. "Monthly cattle supply and price forecasting models," ISU General Staff Papers 1982010108000018043, Iowa State University, Department of Economics.
    7. Gardiner, Walter H. & Dixit, Praveen M, 1987. "Price Elasticity of Export Demand: Concepts and Estimates," Foreign Agricultural Economic Report (FAER) 305286, United States Department of Agriculture, Economic Research Service.
    8. Hoffman, Linwood & Glauber, Joseph, 1987. "Effects Of Public Stock.Holding Programs Upon Grain Stock Enhancement," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 269981, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Schouten, Duane, 1985. "An analysis of corn loan and reserve program provisions using endogenous loan and reserve behavioral models," ISU General Staff Papers 1985010108000018103, Iowa State University, Department of Economics.
    10. Shigeru Akiyama & Masahiro Kawai, 1985. "Welfare implications of commodity price stabilization with partially flexible production, private storage and buffer-stock costs," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 121(2), pages 261-279, June.
    11. Lin, William & Glauber, Joseph & Hoffman, Linwood, 1985. "Short-Run Effects Of The Farmer-Owned Reserve Program On Grain Price Enhancement And Stabilization," 1985 Annual Meeting, August 4-7, Ames, Iowa 278653, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Aranoff, Gerald, 2011. "Competitive manufacturing with fluctuating demand and diverse technology: Mathematical proofs and illuminations on industry output-flexibility," Economic Modelling, Elsevier, vol. 28(3), pages 1441-1450, May.
    13. Tran, A. Nam & Welch, Jarrod R. & Lobell, David & Roberts, Michael J. & Schlenker, Wolfram, 2012. "Commodity Prices and Volatility in Response to Anticipated Climate Change," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124827, Agricultural and Applied Economics Association.
    14. Hoffman, Linwood & Glauber, Joseph & Lin, William, 1986. "Effects Of The Farmer—Owned Grain Reserve Upon State—U.S. Grain Price Differentials ," 1986 Annual Meeting, July 27-30, Reno, Nevada 278082, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Lee, Tsoung-Chao & Seaver, Stanley K., 1980. "Forecasts Of Farm Animal Production In The New England States And In The U.S," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 9(1), pages 1-6, April.
    16. Prindle, Allen M., 1979. "Impact On Livestock Producers Of U.S. Policies Affecting Feed Supplies," Journal of the Northeastern Agricultural Economics Council, Northeastern Agricultural and Resource Economics Association, vol. 8(2), pages 1-11, October.
    17. Chaton, Corinne & Creti, Anna & Villeneuve, Bertrand, 2008. "Some economics of seasonal gas storage," Energy Policy, Elsevier, vol. 36(11), pages 4235-4246, November.
    18. Fox, Roger W., 1979. "Brazil's minimum price policy and the agricultural sector of northeast Brazil:," Research reports 9, International Food Policy Research Institute (IFPRI).
    19. Koo, Won W. & Burt, Oscar R., 1979. "Distribution of Social Benefits with Optimal Control of U.S. Wheat Stocks," 1979 Annual Meeting, July 29-August 1, Pullman, Washington 277825, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Prindle, Allen M., 1979. "Impact On Livestock Producers Of U.S. Policies Affecting Feed Supplies," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 0(Number 2), pages 1-11, October.

    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:isu:genstf:1985010108000013104. 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: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.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.