Crop choice and conservation : implications of increased biofuel demand Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/p2676x46n

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  • Regression analysis was used to examine the effect of a change in agricultural prices on land use and conservation. The planted acreage for each of three crops – corn, soybeans, and spring wheat – was regressed on the expected prices of the three crops, the input prices, and past land use in the United States for the period 1976-2007. Depending on the estimator, the respective ranges of the own-price elasticities of corn, soybeans, and wheat were 0.42 to 0.69, -0.31 to 0.41, and 0.10 to 1.10. The regression results were combined with nitrogen-fertilizer application rates to examine the effect of a price change on the amount of fertilizer applied in the Corn Belt. A $1 increase in the price of corn was found to increase the amount of nitrogen fertilizer use by 11 %. A $1 increase in all three commodities of interest was found to increase the quantity of fertilizer by 17 %. The number of acres enrolled in the Conservation Reserve Program (CRP), from 1986-2007, was regressed on the prices of corn, soybeans, and wheat, the rental rate paid to farmers for CRP enrollment, the wage rate, a land-quality indicator, and land use in the previous year. The elasticity of CRP acreage fell between -0.06 and -1.01 with respect to the price of corn and between 0.05 and 0.07 with respect to the CRP rental rate. When dynamic estimators were used, the wage elasticity was strongly positive, and the land-quality elasticity was negative.
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