A five-commodity econometric simulation model of the U.S. livestock and poultry sector

Abstract

<p>Government grain policies of the early 1970s which returned U.S. agriculture to a free market situation are an example of the ignored condition of the livestock and poultry sector in policy formulation. An element of uncertainty not known for many years was reintroduced under the extreme fluctuations in grain prices in the free market. Feed prices began to increase as reserves of grains were depleted through high levels of exports. Not only were profit margins in livestock production reduced but also feed prices became highly volatile after many years of stabilizing government programs. The government no longer had vast grain stocks to cushion the effects of weather and other stochastic events.</p>