An Examination of Major Crop Acreage Response

Abstract

In recent years, several studies have examined acreage response of major crops to various economic, technical, and institutional stimuli. These studies focused primarily upon the influence of government farm programs on producers' production decisions. While the influence of government programs has recently diminished and market forces are more direct determinants, this less stable situation has likely increased informational needs on potential production response. Previously developed response models require updating, additional refinement, or reformulation for continued usefulness in the current situation.

Regional acreage response functions for major US field crops: estimation and policy implications

“…Mann, 1973;Meyers and Hacklander, 1979;R. Miller, 1979;Neenan, 1981;Penn and Irwin, 1971;Rao, 1965;Ray, 1971;Ray and Heady, 1974;Reed and Rigglns, 1981;Reynolds, Heady, and Mltchel, 1975;Salathe, Price, and Gadson, 1982;Schatzer, Roberts, and Heady, 1981;Walker and Penn, 1975;Whittaker and Bancroft, 1979;Winter and Whittaker, 1979). Despite its frequent use, the adaptive expectations model is criticized for the lack of a theoretical basis for the geo metrically declining lag structure (Grillches, 1967;Lin, 1977), the assumed constancy of the coefficient of expectation 3, and the neglect of current price information (Lin, 1977 tfc f where p^ is the expected price, p^ ^ is the actual farm price, p^ is the effective support price, and w^, w^ are weights, with w^ + = 1.…”

“…Various authors have found some form of the weighted support price technique to be relatively successful in tracking actual crop acreage re sponse over time (Evans and Kenyon, 1974;Gallagher, 1978;Grant and Leath, 1979;Houck and Subotnik, .1969;Ryan andAbel, 1973a, 1973b;Walker and Penn, 1975). Danin (1976) questions the theoretical basis for the effective price variables and suggests additional investigation is needed to explain the "success" in the empirical studies.…”

“…This methodology is used frequently in acreage response studies (Gallagher, 1978;Houck and Subotnik, 1969;Lin, 1977;Ryan andAbel, 1973a, 1973b;Walker and Penn, 1975;Whittaker and Bancroft, 1979;Winter and Whittaker, 1979); however, it is criti cized on grounds that participation in an acreage diversion program is treated as an exogenous variable when, in fact, it is more appropriately treated as endogenous (Bancroft, 1981). An argument is made that the extent of diversion is a function of market prices relative to the in centives to participate in commodity programs (i.e., support payments, loan rates, and diversion payment rates).…”

Regional acreage response functions for major US field crops: estimation and policy implications

“…Mann, 1973;Meyers and Hacklander, 1979;R. Miller, 1979;Neenan, 1981;Penn and Irwin, 1971;Rao, 1965;Ray, 1971;Ray and Heady, 1974;Reed and Rigglns, 1981;Reynolds, Heady, and Mltchel, 1975;Salathe, Price, and Gadson, 1982;Schatzer, Roberts, and Heady, 1981;Walker and Penn, 1975;Whittaker and Bancroft, 1979;Winter and Whittaker, 1979). Despite its frequent use, the adaptive expectations model is criticized for the lack of a theoretical basis for the geo metrically declining lag structure (Grillches, 1967;Lin, 1977), the assumed constancy of the coefficient of expectation 3, and the neglect of current price information (Lin, 1977).…”

“…A third technique for measuring the impact of government programs upon acreage response is Houck and Subotnik's (1969) (Gallagher, 1978;Houck and Subotnik, 1969;Lin, 1977;Ryan andAbel, 1973a, 1973b;Walker and Penn, 1975;Whittaker and Bancroft, 1979;Winter and Whittaker, 1979); however, it is criti cized on grounds that participation in an acreage diversion program is treated as an exogenous variable when, in fact, it is more appropriately treated as endogenous (Bancroft, 1981). An argument is made that the extent of diversion is a function of market prices relative to the in centives to participate in commodity programs (i.e., support payments, loan rates, and diversion payment rates).…”