Temporal and Distributional Dynamics of U.S. Corn Production Economics: A Multi-Model Data-Driven Framework (1996–2024)
DOI:
https://doi.org/10.54536/ajase.v5i2.7506Keywords:
Agricultural Cost Analysis, Corn Production Economics, Farm Resource Regions, Linear Mixed Model, Panel Fixed Effects, Prais-Winsten GLS, Quantile Regression, USDA ERSAbstract
This study develops a comprehensive econometric framework to analyze 29 years (1996–2024) of U.S. corn production economics across six farm resource regions, drawing on 5,476 observations from the USDA Economic Research Service Commodity Costs and Returns survey. Four complementary models are systematically selected, validated, and interpreted: a two-way panel fixed effects model with clustered standard errors to identify causal regional disparities; a linear mixed model with random region intercepts to generate predictions for new or unobserved regions; Prais-Winsten generalized least squares to correct for serial correlation in 14 individual cost category time series; and quantile regression to characterize the asymmetric, fat-tailed distribution of net returns. Diagnostic tests, including Shapiro-Wilk normality, Kruskal-Wallis, Durbin-Watson, variance decomposition, and Hausman specification, guide model selection at each stage. Key findings indicate that 96–97% of variation in costs and revenues is attributable to common time shocks (commodity price cycles), with regional differences accounting for only 3–4%, except yield, where 38% of variance is permanent between-region structure. The median net return after all costs is −$29/acre at the temporal midpoint, and OLS mean estimates are statistically uninformative (R² = 0.09, p = 0.11). The widening interquartile range of net returns (+$10.07/yr at Q75 versus +$1.78/yr at Q25) reveals a structurally diverging distribution that OLS cannot detect. Total operating costs are projected to reach $502/acre by 2030 under the AR(1)-corrected trend. These findings have direct implications for farm-level financial planning, agricultural policy design, and risk management strategies.
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