Structural Change in the u.s. Soybean and Soybean Products Markets: A Systematic Varying Coefficient Simultaneous System Approach (United States)

Abstract

The main objective of this study is to develop an econometric model of the U.S. soybean complex in order to examine the effect of changes in various demand and supply variables on prices, storage utilization and processing levels of soybeans, soyoil and soymeal. Structural change is present when the dependent variable responds differently to a per unit change in explanatory variables over time. In this study evidence of structural change was provided by the interaction terms between time and explanatory variables and between the level of Brazilian soymeal exports and explanatory variables. Additional evidence was also provided by the time varying elasticities calculated over four sub-periods. These sub-periods are 1965/66-1968/69, 1969/70-1972/73, 1973/74-1976/77 and 1977/78-1980/81. These results indicate that dramatic evidence of structural change occurred in the soybean crushing, aggregate soybean exports demand and supply of soyoil for use. By contrast there appeared to be no indication of structural change for the soyoil stock and on-farm soybean stock demands.