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Estimating the Impact of Conservation Reserve Program Contract Expiration on Corn and Wheat Prices

Published online by Cambridge University Press:  15 September 2016

Carl O. Garrison ,
Michael R. Dicks  and
Brian D. Adam
Carl O. Garrison
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Michael R. Dicks
Affiliation:
Department of Agricultural Economics, Oklahoma State University
Brian D. Adam
Affiliation:
Department of Agricultural Economics, Oklahoma State University
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Abstract

The Conservation Reserve Program reduced available cropland in the United States by 34 million acres under the first nine signup periods (1986–1990). Among these are ten million acres with wheat base and four million acres with corn base, which could potentially produce 288 million bushels of wheat and 340 million bushels of corn per year upon contract expiration. The impacts of expiring CRP contacts on the production and prices of wheat and corn in the United States are estimated. Based on past production practices and post-CRP land-use intentions of contract holders, 48.2% of base acres enrolled in CRP will return to production. Under this scenario, wheat prices will decline by more than 7% and corn prices by more than 2% by 2000, unless ARP levels, normal flex acres percent, or target prices are changed.

Type
Agricultural, Resource, and Environmental Policies in the 1990s
Information
Agricultural and Resource Economics Review , Volume 23 , Issue 1 , April 1994 , pp. 94 - 99
Copyright
Copyright © 1994 Northeastern Agricultural and Resource Economics Association 

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