Export Demand Elasticity Estimation for Major U.S. Crops

Abstract

Elevated prices for major U.S. commodities have renewed interest in the price sensitivity of foreign demand facing the United States. Although the elasticity of foreign demand plays an important role in discussions of U.S. farm policy, it is also a parameter that is much debated with the majority of studies in this area published over 20 years ago. We provide new estimates of the elasticity of export demand for U.S. corn, soybeans, and wheat using updated data and empirical techniques. Our estimates are useful for practical policy analysis as well as for researchers seeking to parameterize large-scale simulation models.