Economic impacts of the Farmer-Owned Reserve program on the U.S. corn-livestock sector
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The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).
History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.
Dates of Existence
1898–present
Historical Names
- Department of Economic Science (1898–1910)
- Department of Economics and Political Science (1910-1913)
- Department of Applied Economics and Social Science (1913–1924)
- Department of Economics, History and Sociology (1924–1931)
- Department of Economics and Sociology (1931–1967)
Related Units
- College of Agricultural and Life Sciences (parent college)
- College of Liberal Arts and Sciences (parent college)
- College of Business (parent college)
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Abstract
An integrated econometric model of the U.S. corn-livestock sector was developed to investigate the impacts of the Farmer-Owned Reserve (FOR) program on the market behavior of the sector. The model was formulated and estimated on a quarterly basis, in order to increase the number of observations on FOR-influenced markets, and permit a seasonal, as well as interyear evaluation of the program;Econometric simulation was used to contrast the performance of the program with an alternative policy design reflecting continuation of the storage policies in existence prior to the reserve program. Over the period 1977-1982, the analysis indicated that the FOR exerted appreciable effects on both the mean price of corn, and the year-to-year variation in corn prices. Relative to the alternative storage policy, the reserve program enhanced prices in surplus years, while moderating the upward pressure on prices in tight years. The program also made a substantial contribution towards the objective of expansion of carryover stock levels;The Farmer-Owned Reserve exerted noticeable, although no large, effects on the U.S. livestock sector over the period. Reserve-induced higher corn prices resulted in small reductions in livestock herds, and hence, production relative to continuation of the pre-1977 policies. Livestock prices were increased moderately by the operations of the program.