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https://hdl.handle.net/2142/66777
Description
Title
A u.s. Corn Stocks and Consumption Demand Model
Author(s)
Pepper, Philip Woodrow
Issue Date
1980
Department of Study
Agricultural Economics
Discipline
Agricultural Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Agricultural
Language
eng
Abstract
Changing political and social goals complicate attempts to achieve the compromises needed for consistent national agricultural policy. In this light, it would be futile to propose the "best" grain storage program. Rather, the research in this area might be most constructive if aimed at a better understanding of why grain is stored. Recognition of the factors affecting the storage of grain and the subsequent consequences of altering these factors is an important step in obtaining this understanding.
The theoretical base on which to build research in the area is limited. No storage theory specific to the demand for grain for storage has been found by his author. The development of a theory of demand for grain for storage would greatly enhance an analysis of the factors affecting the quantity of grain stored by different sectors of the grain market.
Development of a theory of the demand for grain for storage would enable this demand to be incorporated with other demands for grain. Using a quantitative model that incorporates these demands would allow for the investigation of the changes in the quantity of grain stored under alternative conditions. The results of this study would add to the understanding of the grain markets and enhance the decision making of both the private and public sectors.
Corn was the grain selected for study because of its importance as a grain crop. Limitations of time and other resources prevented the analysis of additional grains in this study.
The specific objectives of the study were: (1) Set forth a theoretical model of the demand for grain for storage that is compatible with accepted economic theory. (2) Using the theoretical model as a guide, construct a system of equations that can be used to relate selected variables to the quantity of corn stored by different sectors of the market. (3) Use estimates of the parameters derived from the model to investigate the general impact of alternative government programs on the demand for corn for storage.
A theory of the demand for grain for storage was developed based on expectations of future demands for grain. Imperfect knowledge and profit maximizations as a goal was assumed to characterize the corn market.
A system of equations partially based on the proposed theory was developed for corn. Once the model was estimated using Three Stage Least Squares, the impacts of alternative government loan rates and interest rates on the storage of corn and the corn market in general was briefly investigated.
Eight quarterly demand equations for corn were estimated. These demands included three consumption demands (domestic non-fed, domestic feed, and export) and five storage demands (loan, reseal, CCC, producer storage not in government programs, and commercial storage). Attempts to construct demand equations for export, CCC, loan and reseal were complicated by changing governmental policies.
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