The United States–China Trade War and Impact on the Post-Conservation Reserve Program Land Allocation

We use a Bayesian approach to estimate elasticities of former Conservation Reserve Program (CRP) land allocation and the impact of the US–China trade conflict on post-CRP land transitions. Economically acceptable elasticities of land exiting CRP are important for applied analysis, including market shocks and environmental policy. Taking as given the total area exiting the CRP, the Phase 1 deal raised the posterior mean of national post-CRP soybean area by 155 thousand acres and the market facilitation program by 89 thousand acres. Cross-commodity effects are important, and elasticities vary depending on the direction and magnitude of changes in net returns and payments.