Effects of Marketing Loans on U.S. Dry Peas and Lentils: Supply Response and World Trade

By William Lin and Gary Lucier

Economic Research Report No. (ERR-58) 41 pp, May 2008

The 2002 Farm Act required USDA to implement marketing loans for the 2002-07 crops of dry peas, lentils, and small chickpeas. This provision led to expanded acreage for dry peas and lentils, crops analyzed in this study. The analysis found that marketing loans played a role in expansion for dry peas in 2003-05 and for lentils in 2003. For dry peas and lentils, marketing loans contributed to acreage expansion in North Dakota and Montana. Simulation model results suggest that the marketing loans had negligible impacts on world prices for dry peas and lentils in 2003-05. Impacts on U.S. exports were minor, increasing by about 2 percent in 2003.

Keywords: dry peas, lentils, marketing loan, supply response, world trade, ERS, USDA

In this report ...

Chapters are in Adobe Acrobat PDF format.

• Report summary, 180 kb.

• Abstract, Acknowledgments, and Contents, 243 kb.
• Summary, 49 kb.
• Introduction, 79 kb.
• The Dry Pea and Lentil Industry: United States vs. Canada, 153 kb.
• The U.S. Marketing Loan Program, 55 kb.
• The Acreage Response Model, 71 kb.
• Estimated Model Results, 54 kb.
• The Role of Marketing Loans in Acreage Expansion, 108 kb.
• Implications of Marketing Loans for World Trade in Dry Peas and Lentils, 46 kb.
• Conclusions, 45 kb.
• References, 51 kb.
• Appendix A—Expected Grower Prices and Expected Net Returns for Dry Peas and Lentils, 1997-2005, 57 kb.
• Appendix B—Conceptual Framework and Simulation Model, 85 kb.

• Entire report, 571 kb.

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Updated date: May 30, 2008