Determinants of U.S. Corn and Soybean Yields: Impact of Climate Change and Crop Prices
35 Pages Posted: 18 Mar 2012
Date Written: March 16, 2012
We conduct an econometric analysis of the factors influencing U.S. corn and soybean yields using U.S. county level data from 1977 to 2007 and evaluate the likely effects of future climate change on U.S. crop yields based on the projected climate changes by IPCC (2001) and our estimated parameters. We find that a one dollar increase in crop prices in terms of dollars per bushel would enhance corn yield by 3.95 to 5.63 bushels per acre and soybean yield by 0.11 to 0.14 bushels per acre, which on average implies an own price elasticity of corn ranging from 0.107 to 0.152 and an own price elasticity of soybean yields ranging from 0.028 to 0.035, respectively. We also find an increasing trend rate of 2.48-2.58 bushel per acre per year on average over the 1994-2007 period for corn yields and 0.23-0.24 for soybean yields. Climate variables have significant impact on corn and soybean yields; high temperature leads to reduced crop yields while more precipitation enhances yields. Finally, our simulated results indicate that further increases in global temperature would significantly reduce the yields of corn and soybeans.
Keywords: climate change, corp yield, yield elasticity, yield trend, panel data
JEL Classification: C33, C51, O51, Q10, Q54
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