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
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