Consequences of USDA's Farmer-Owned Reserve Program for Grain Stocks and Prices, Vol. 2

The Farmer-Owned Reserve (FOR) Program subsidizes farmers to hold stocks of grain in reserve in order to regulate the amount of grain available and thereby stabilize prices. Data on stocks and prices of wheat and corn during the FOR program's first 3 years were examined, and estimates of its effects were made. The analysis focused on: (1) quantities of stocks, using annual and quarterly data for wheat and corn; (2) grain prices, using annual, quarterly, and daily data; and (3) grain price stabilization, comparing the variability of prices before and after the FOR program was in effect.