Estimating crop yield supply responses to be used for market outlook models: Application to major developed and developing countries

Roel Jongeneel, Ana Rosa Gonzalez-Martinez*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

The evolution of yields is one of the driving factors explaining crop supply growth. Part of this is explained by how yields react to prices, though there is a lot of uncertainty about the price-responsiveness of yields. Using information from various sources such as agronomy, economic theory and economic literature an in-depth assessment of yield price responsiveness is made. The result is used as a set of prior-information, which is subsequently taken into account to re-estimate yield price supply responses for 20 main crops in major producing developed and developing countries, using OLS and Mixed Estimation (ME) approaches. The outcomes indicate that price-responsiveness is usually low. Moreover, the ME results are different than the current estimates used in the OECD-FAO's market outlook model, showing stronger differentiation among crops/countries. The Mixed Estimation is found useful to overcome typical problems encountered when estimating yield-price responsiveness, such as violations of economic theory, insignificance of estimated parameters and inconsistencies with agronomic knowledge regarding the size of the estimated responses.

Original languageEnglish
Article number100327
JournalNJAS - Wageningen Journal of Life Sciences
Volume92
DOIs
Publication statusPublished - Dec 2020

Keywords

  • Mixed estimation
  • Prior information
  • Yield price responsiveness

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