AN ANALYSIS OF THE ROLE OF FUTURES PRICES, CASH PRICES AND GOVERNMENT PROGRAMS IN ACREAGE RESPONSE

An integrated investigation of futures price, cash price, and government programs is presented in the context of an econometric model of acreage supply response for U.S. corn and soybeans. The analysis refines the role of different sources of price information in the farmers' acreage decision. It is found that the government corn support price program plays a major role in corn and soybean production decisions. Also, the results indicate that futures prices are not good proxies for expected future cash prices in the presence of government programs. This raises questions about the information efficiency of futures prices when government intervenes in the market place.


Issue Date:
1983-07
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/32481
Published in:
Western Journal of Agricultural Economics, Volume 8, Number 1
Page range:
27-33
Total Pages:
7




 Record created 2017-04-01, last modified 2017-04-04

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