Abstract

ABSTRACT:

We estimate U.S. corn and soybean supply responses by exploiting the large exogenous price variations associated with implementation of the Renewable Fuel Standard. We focus on recent years and on the 12 U.S. midwestern states and estimate a system of dynamic equations that is consistent with the role of crop rotation. Corn and soybean acreages respond more in the short run than in the long run. Cross-price elasticities of acreage responses are negative and fairly large in absolute value such that, when corn and soybean prices move together, the response of total acreage allocated to these two crops is extremely inelastic. (JEL Q11)

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Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 593-613
Launched on MUSE
2018-10-15
Open Access
No
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